Why Would A Long Term Disability Claim Be Denied?

A long term disability claim represents a potentially significant loss to an insurance company if it is approved, so the question should perhaps be reworded. Why wouldn’t a long term disability claim be denied?

It is the job of any insurance company employee to assist in securing the bottom line and protecting the assets of the company. It isn’t their job to be empathetic and release monetary resources easily to plan participants that file a claim against their employer’s offered benefit plans. So how do employees deal with this scenario?

ERISA: Long Term Disability Claim Protection

The Employee Retirement Income Act of 1974 (ERISA) exists for just this reason. According to the U.S. Department of Labor, this law protects the interests of employee benefit plan participants and their dependents and other beneficiaries.

As indicated by TheBalanceCareers.com, however, ERISA was drafted to protect private sector, non-government employers with benefit plans which they sponsor. It doesn’t apply to non-profit or public sector employers.

One of the first and most important things that the law established was the necessity of providing written and/or electronic plan information to participants. The ability to access information is part of the drive to make plan sponsors transparent and accountable. It makes the terms of the application and appeal process for benefits very clear and concise.

Additionally, ERISA established a code of conduct for plan fiduciaries and managers. It ensures that funds are protected and available to employees in the event of declared bankruptcy.

Overall, the law insists that the welfare and interests of the participating employees are held in highest regard.

What Is Long Term Disability Insurance?

Long term disability insurance is a special type of insurance coverage designed to protect workers in the case of a disability. The average absence due to a long term disability is reportedly 34.6 months. This means that workers may suddenly find themselves without wages for years – adding stress to an already stressful situation.

This is where long term disability comes in. Through private or employer plans, long term disability insurance can provide income replacement for these unexpected situations. Some plans may offer additional benefits such as occupational re-training.

In some cases, employers cover the loss of long term disability, although this is not required under federal or state laws. Other plans may allow workers to opt into the benefits at a lower rate through a group plan.

Employer-related plans usually have a variety of requirements such as:

• Length of employment: Workers may be required to work for a company for a certain period of time before they are eligible for long term disability coverage.
• Full time status: Most plans require a worker to be full time, working over 30 hours in a week, in order to qualify for coverage.
• Electing into benefits: In many situations, long term disability coverage is voluntary. This means that workers must opt into the benefits and contribute to the plan.

Employees also have the option to seek long term disability coverage through a non-employment program.

How To File A Disability Claim

The disability claim process will vary from program to program but usually involves some of the same steps.

Claimants who have recently become disabled may be directed to fill out a claim packet. These prewritten forms streamline the process of proving a disability. Statements or documentation from a physician or employer are often required for these claims. These packets may also include direct-deposit enrollment.

After filing a claim, workers will have to wait for their claim to be processed. This time may vary depending on the company. While waiting, claimants may want to gather additional documentation in case the insurance company requires more information to validate a claim.

If a claim is approved, disability benefits will be paid on the first of the month following their elimination period. Elimination periods will vary, although they are usually about 90 days. This period starts the day a claimant becomes disabled. Following this waiting period, benefits will be paid out for a predetermined benefit period. This could last for years or even up to retirement.

Unfortunately, disability claims are not always approved. In the case of a denial, claimants may be forced to start the stressful and uncertain appeals process.

Despite the Law – Appeal

The existence of ERISA doesn’t mean that plan sponsors ultimately do act in the best interest of the employee, but it does provide legal recourse when they do not. ERISA has been called on many a time in bad faith insurance claim lawsuits.

In order to take legal action in the event your long term disability claim is denied, you must follow all appeal procedures by established deadlines as indicated in the plan information given to you by the insurance company.

Here are some common reasons why these types of claims are denied:

Failure to receive regular medical treatment—regular medical treatment including objective diagnostic testing generates treatment and lab notes which can be used as documentation to prove your case. If you fail to schedule or attend regular appointments, it can be an uphill legal battle to support your claim.

Evaluation—Along the same lines, having a letter from your doctor with their professional evaluation of your ability to perform the essential duties of your work is critical. Insurance companies provide forms for this, but they should be avoided as they are designed to get the type of responses that would support denial of the claim.

As thorough an independent assessment as you can get from your general physician and any additional specialists seen, the better the outcome should you have to take legal recourse.

Missing Medical Records—Disability claims are often denied due to a lack of medical records. As can be the case, multiple records may be sent from a doctor’s office and a plan can claim ‘non-receipt’ of notes for certain treatments repeatedly. This process can take a lot of persistence and patience.

The best way to tackle this is to request a list of received records and missing records and repeatedly ask for updates in writing as they are sent from doctors offices and received.

Always remember, the burden of proof sits squarely on the insured’s shoulders. People may find that their insurance claim has been unfairly denied—in these cases, they may be able to file an ERISA lawsuit in order to receive rightful benefits due.  Following these guidelines will put you in good stead should you need to employ counsel to assist you with an ERISA claim.

Although a disability claim attorney is not required for filing or appealing a claim, these experienced professionals can help make the process easier. A disability claim attorney likely understands the documentation required and the best way to jump through administrative hoops associated with the long term disability process. This experience could be invaluable when faced with difficult insurance agents or other roadblocks to compensation.