Overturning a Denial of Disability Benefits
Often the denial of benefits comes at a time when you are least able to handle it emotionally. Not only are you learning to cope with the limitations of your disability, but now you must deal with a depersonalized bureaucracy on an issue central to your financial security.
|Q:||Can I sue the insurer when I receive a denial or must I exhaust the administrative remedies offered by the plan or insurance policy?|
A: All disability plans obtained through your employer maintain an appeal procedure. It is required by law under ERISA. Before you can sue for disability benefits you must exhaust these internal administrative appeals. These appeals are very important. Not only is there a chance that the plan or insurance company will reverse the denial, the appeal presents a valuable opportunity to create a strong case should a lawsuit be necessary. The opposite is also true. If you do not create a good record during this process, you doom yourself to failure in any future lawsuit. It is therefore highly recommended that you seek professional help at this stage.
|Q:||What are my rights during the administrative process?|
A: Under ERISA you are entitled to a full and fair review of your claim. When benefits are denied, you must be told in writing:
(i) the specific reason for the denial; (ii) the plan provision(s) on which the denial is based; (iii) any additional material and information that is needed before the insurer will pay the claim and an explanation of why this is needed; (iv) the plan's review procedures and the time limits applicable for such procedures; and (v) any specific rule, guideline, protocol, or similar criteria relied upon in making the determination (a copy should be provided to you free of charge upon request).
If your denial letter fails to tell you about any of these items, your rights are being violated.
|Q:||What initial steps should I take if I receive a denial of benefits?|
A: The first step you should take is to read your denial letter and determine whether it satisfies the above requirements. If it does not, a letter should be sent to the plan or insurance company complaining of the deficiency. You should also note the date that an appeal must be sent to them (usually within 180 days). Because many courts enforce these deadlines, you must be very careful to submit a timely appeal.
If the denial letter specifies that your records were reviewed by a specific doctor on behalf of the plan or insurance company, you should include in your letter a demand for that doctor's report and any other information that they relied on in denying your benefits, including any rule, guideline or protocol. In addition, if you have not already done so, you should also request copies of the Plan and/or policy.
Very early on you should also show the denial letter to your doctor. It is important that your doctor prepare a report addressing every concern raised by the Plan in your denial letter. Because doctors are very busy, often the best way to do this is to bring the letter with you during your next appointment. Have your doctor dictate a response at that visit.
Another helpful step is to gather all medical evidence that supports your claim and addresses the concerns raised in the denial letter. Sometimes this will include your doctor's office visit notes or other medical records. It may also be helpful to gather professional literature that supports your case.
|Q:||What are common reasons given for denials?|
A: Among the many reasons that insurers give for denying benefits, the following are fairly common.
There is no objective evidence in support of total disability.
This is a reason that is very common for disabilities caused by chronic fatigue syndrome, depression, soft tissue injuries and the like. If your denial letter says this, you should check the language of your policy or plan. If the plan does not specifically require objective evidence in support of disability, some courts have ruled that this is not a sufficient reason.
In any event, you should make sure that your doctor's letter does describe any objective evidence establishing your disability. At a minimum your doctor should render an opinion as to whether your symptoms are consistent with your diagnosis.
We have spoken with your doctor and he agrees with us.
Many insurers send out letters saying that they have spoken with your doctor and that he or she agrees with us. If your denial letter says this, check with your doctor. In many cases it is just not true. If your doctor never said what they said, have your doctor write a letter correcting the record.
Your job was sedentary and you are not disabled from performing sedentary work.
This is a common reason for denial when the reason for disability is fatigue and/or pain. It is hard to quantify fatigue and pain. The insurers take the position that your job does not involve a lot of physical activity so that you can still do it despite your fatigue and pain. If this is the denial you receive, it would be very helpful if you could obtain a letter from your doctor opining that you cannot work even in a sedentary position. You may also want to obtain a description of your job's duties from your employer. This could help demonstrate that your job was not sedentary or caused significant stress.
We had your records reviewed by Doctor X. Dr. X says you are not disabled.
If you receive this type of denial it is important to request a copy of the report of Dr. X. Once you receive it, you should have your doctor write a report contesting its findings. One way to attack the report is to argue that your condition cannot be evaluated without a physical examination. This argument, of course, sets you up for an independent physical examination. Before making it, you have to assess the risks and benefits of such an examination.
You are no longer disabled.
All long term disability plans and policies periodically review the cases of individuals currently receiving benefits. If you receive a denial which says you are no longer disabled, you have the right to appeal the denial just like you did at the initial application.
These discontinuations can often be attacked by demonstrating that your condition has not improved.
|Q:||What should I send with my appeal?|
A: Once you have gathered all evidence in support of your claim, including a report from your doctor and relevant medical records, a letter should be sent to the insurer arguing why their decision was not in accordance with the evidence. All the concerns raised in the denial letter must be addressed.
|Q:||What should I do if the insurer offers me a lump sum settlement?|
A: Lump sum settlements are becoming increasingly common. In exchange for a release of all legal rights under the policy, insurers will often offer you a lump sum cash amount. If you receive such an offer, you are well advised to consult with an attorney familiar which such matters so that you can find out if you are receiving a fair settlement.
You should note that the lump sum settlement offers are always less, in most cases significantly less, than the present value of your benefits. The present value of your benefit is the amount that you would need today to purchase an annuity that would pay you monthly benefits equal to the benefits under the policy. Therefore, by agreeing to a lump sum settlement you will be getting less than what you are entitled under the policy. If it wasn't less, the insurer would not be offering it.
The pro's of a lump sum settlement are that you have cash now. This may be helpful to you in getting through a particularly trying time. You also will not have to worry about an insurance company constantly monitoring your progress. If you receive monthly benefits, you will be asked to give periodic reports and may be asked to submit to physical examinations.
|Q:||What should I do if my insurer asks me if I am interested in a rehabilitation program?|
A: If you are asked whether you are interested in a rehabilitation program, be very careful. Insurance companies adopt these programs to minimize the benefits they pay. They are not for your benefit. These programs may sound very appealing because no one wants to be disabled. They may, however, be Trojan Horses. We had a client who expressed interest in such a program. Once he did that, the insurer point blank told him that he must then be able to work. The insurer then subjected him to a functional capacity evaluation and discontinued his benefits -- without ever having him participate in a rehabilitation program.