There is a reason that so many claimants are worried about their long term disability after 2 years of receiving benefits – the majority of long term disability insurance policies have some sort of provision which allows the insurance company to terminate certain claims for long term disability after 2 years.
Why Are Long Term Disability Claims Cutoff After Two Years?
Own Occupation v. Any Occupation
Question: I have been on long term disability benefits for the past 20 months. I recently received information from the insurance company regarding a “change in the definition” of disability and an “any occupation” review for long term disability claims after 2 years. What does this mean?
Answer: This means that your disability claim is about to go through a process to prove once again that you are disabled essentially, but this time, you will have to prove that you cannot work in “any occupation”, not just your “own occupation.”
Let’s break this down a little further.
The primary reason why long term disability benefits are cut off after 2 years is that under most disability policies there’s a change in the way that they’ve defined the term disability. Under most policies, for the first two years, you meet the definition of disability so long as you cannot perform the material duties of your occupation. This is oftentimes referred to as the own occupation or “own occ” period because they’re looking at whether you can do your own occupation.
If you were working as an auto mechanic, that is considered your own occupation. If you injure your back, then you may not be able to work as a mechanic any longer because you can no longer do the essential duties of that job like bending, reaching, pulling, pushing, and using your back muscles in the way that is necessary to work on cars.
But also under most policies, after two years or 24 months of benefits, the definition of disability changes such that they look to see whether you can perform the material duties of any occupation, and that’s oftentimes referred to as any occupation or “any occ” period. During a claim review under the “any occupation” standard (typically after two years of being on LTD), the insurance company will look to see if you can work any occupation. “Any occupation” could be working as a salesman or secretary in the auto body shop instead of a mechanic. Or it could mean working in another field of work altogether.
Therefore, in many cases, the insurance company will say, “We agree that given your medical problems you cannot perform the material duties of your job, but after two years we think that there are other types of work that you may be able to perform, even taking into account your medical condition.” That’s why they oftentimes will send you a letter cutting you off long term disability after 2 years.
Time Limitation on Mental / Nervous Conditions and Disabilities Diagnosed by Subjective Complaints
Most group policies also have a 24-month limitation on long term disability benefits for claims involving disabilities arising from mental, nervous, and psychological impairments. If you are receiving LTD payments due to depression, anxiety, post-traumatic stress disorder, agoraphobia, obsessive-compulsive disorder (OCD), or a similar impairment, you may be limited to receiving 24 months of benefits. However, if you are institutionalized or confined to an inpatient treatment facility when your 24 months expire, most insurance companies will continue to pay benefits until you are no longer hospitalized, subject to a cap.
Note: The rationale behind this two-year limitation on disability coverage (from the insurance company’s point of view) is that many of these mental/nervous impairments can be exaggerated or outright faked. There is a possibility that the claimant is pretending to be unable to perform any occupation. While this policy does keep insurance policy premiums lower than they otherwise would be, this provides little comfort to those long term disability recipients with bona fide mental illnesses whose benefits are terminated after only two years.
There are often (but not always) exceptions to this time limitation for organic mental disorders like dementia and organic brain disease, and perhaps even for mental illnesses such as schizophrenia and bipolar disorder. You must look to the specific language in your policy to determine what conditions are subject to the two-year limitation (and to determine which conditions are exempt from this 2-year limitation). Policies offered by different insurance companies will use different language to describe the terms of the disability policy.
Some policies also have a two year limit on long term disability benefits for chronic pain conditions such as arthritis and chronic back pain, and for medical conditions that are primarily diagnosed based on “subjective” complaints, including chronic fatigue syndrome, neuromusculoskeletal, and soft tissue disorders, and/or fibromyalgia. Again, some insurance policies may carve out exceptions to this limitation. For example, I’ve seen a MetLife policy that has a 24 month limit on neuromusculoskeletal and soft tissue disorders, except where there is certain objective evidence. Here is an excerpt from that policy:
Neuromusculoskeletal and soft tissue disorder including, but not limited to, any disease or disorder to the spine or extremities and their surrounding soft tissue; including sprains and strains of joints and adjacent muscles, unless the Disability has objective evidence of
1. Seropositive arthritis;
2. Spinal tumors, malignancy, or vascular malformations;
5. Traumatic spinal cord necrosis; or
Finally, disabilities caused by alcohol or drug abuse will almost always be subject to the same 24-month limitation.
Social Security Determined That You Cannot Perform Any Occupation
If you have been receiving long term disability benefits for two years then you likely applied for Social Security Disability benefits as well. If the claim was approved you probably expect that your insurance carrier will also find you disabled. So why is the insurance company saying that you are able to perform another occupation?
Social Security’s definition of disability is different from those used by disability insurance companies. The law defines disability as the inability to engage in any substantial gainful activity (SGA) by reason of any medically determinable physical or mental impairment(s) which can be expected to result in death or which has lasted or can be expected to last for a continuous period of not less than 12 months.
In easier to understand terms, Social Security pays monthly cash benefits to people who are unable to work full time for a year or more because of a disability. “Disability” under Social Security is based on your inability to work. SSA considers you disabled under its rules if:
- You cannot do work that you did before;
- Social Security decides that you cannot adjust to other work because of your medical condition(s); and
- Your disability has lasted or is expected to last for at least one year or to result in death.
This means that the long term disability insurance company does not have to agree with the decision made by the Social Security Administration.
The Transition Process from Own to Any Occupation
Step #1 Vocational Expert Begins Research
As the 24-month date approaches for a claim, the insurance company will provide a vocational expert with a copy of your file to use in their investigation of extending your claim. A vocational expert is a person hired by both the insurance company and disability attorneys as a neutral person who has experience in job placement, earnings histories, employment history, and opportunities.
Step #2 Transferable Skills Analysis
After the initial research, the vocational experts will use software programs to determine your transferable skills called a Transferable Skills Analysis (TSA). The TSA will determine what jobs you could work, based on your education and income levels as well as your disability diagnosis. The most important part of this process is to determine if you have a “sedentary capacity to work”. In other words, could you work a job that requires little physical labor except for sitting and performing office duties?
Step #3 Vocational Report
The vocational expert will put together a report that will outline whether or not you can work in a sedentary position. This is the most important information that will affect your claim. If you are found to be able to work in a sedentary position, the vocational expert will also provide a list of jobs that you are qualified to work, resulting in the insurance company canceling your claim. If you are found to be unable to work a sedentary job, your claim will be approved and expected to be paid out until your policy ends or you turn 65 years old.
It’s important to note that most claims are dismissed at the 24-month mark based on the vocational expert’s report. If you have a degenerative disease that will only continue to get worse, it’s worth fighting the insurance company for extended coverage until your policy runs out. Vocational experts have a vested interest in finding you able to work as it is highly unlikely the insurance company will continue to hire them if they find a large number of claimants unable to work.
Sneaky Insurance Tactics
In 2016, the ERISA insurance disability benefits laws were updated. This prohibited the use of incentives for claims adjusters, investigators, and doctors to deny claims. However, the insurance companies can still use their discretion when it comes to extending contracts to people they know are more likely to side with them over the claimants.
Claims adjusters have also been known to not put all the information into the claimant’s file, whether accidentally, due to case manager changeovers, or intentionally. They have also been known for not providing the vocational expert with the complete list of restrictions and limitations imposed by the doctors of claimants. This can cause the vocational experts’ reports to be faulty.
Appealing the Decision to Cutoff Your Long Term Disability Claim After 2 Years
If your long term disability benefits are cut off after two years, it’s very important that you file an appeal within the time required by the cutoff letter. That’s why it’s important to contact an experienced attorney to help walk you through how you can appeal the decision, and how you can prove that your disability not only keeps you from doing your job, or your own occupation, but that it keeps you from being able to do any job, or “any occ”. If your LTD benefits have been cut off by the insurance company after this 24-month period, then I encourage you to contact an experienced LTD attorney.
Now, your cutoff letter should specify a certain time within which you have to file any appeals. In most cases, it’s 180 days from the date of the letter. You should make sure to file your appeal within that time, as failure to do so is a common mistake that people make while fighting for long term disability benefits. There are other common mistakes that people make, and that’s why I wrote a book called the Top 10 Mistakes That Will Destroy Your Long Term Disability Claim.
The best way to fight the insurance company is to use an experienced long term disability attorney. The Ortiz Law Firm knows all about the insurance companies’ sneaky tactics to cancel claims. We handle claims with Cigna, Unum, Lincoln, Hartford, Principal, and all of the other major disability insurance companies. We can help you gather your documents and statements from your doctors, review your claim, and even hire vocational experts to speak on your behalf. You can contact us online to request a free case evaluation or if you want to talk to someone right away, please give us a call at (866) 853-4512. We look forward to hearing from you.