FAQS ABOUT SHORT-TERM AND LONG-TERM DISABILITY
WHAT IS ERISA?
The acronym ERISA stands for Employee Retirement Income Security Act. Even though the acronym references only retirement income it also applies to certain group employee benefits such as short-term and long-term disability insurance. This is also referred to as income protection benefits or income replacement benefits. All of these constitute ERISA disability benefits which are supposed to replace, in part, lost wages or lost income and provide you with protection if you have the incapacity to work. ERISA is a complex, federal law consisting of a statute, regulations, and court decisions. This is why you need help dealing with your disability insurance company.
DOES ERISA APPLY TO MY CASE?
If you have short-term or long-term disability insurance coverage through your private employer, most likely ERISA will apply to your case if your insurance company denies or terminates your claim. There are disability policies that are not governed by ERISA, however. Among exceptions to ERISA coverage is the “individual policy” which you bought, specifically for yourself to protect yourself in the event you become disabled. If you have an individual policy, it is likely your coverage will have better terms than ERISA policies and it would be easier to prevail in Court if you are incapacitated.
WHY DID THE COMPANY DECIDE THAT I AM NOT DISABLED?
The denial or termination letter you receive from the short-term and long-term disability insurance company may fail to reference or mischaracterize some important medical or other evidence. ERISA requires that the company send to you, within 30 days of the request and without cost, your entire file. The insurance company may be required to pay a fine for each day it is late in sending your file to you. ERISA regulations list all of the types of documents to which you are entitled. This includes the qualifications and reports of all medical and other experts hired by a company to review your case, all of your medical records, internal and external email messages, telephone logs, a description of all work done on your case, written instructions given to employees on how to process your claim, claims manuals, all of the policies and amendments to those policies, organizational charts and other documentation relating to a company’s conflict of interest and more. Often companies will omit some of these documents and need to be reminded of their obligation. In my request for documents I include by name all of the categories of documents the company must produce.
WHAT IF I RECEIVE A LETTER THAT SAYS MY BENEFITS WILL END IN 24 MONTHS?
This could mean that the company has decided that your disability is due to mental illness or “self-reported” symptoms or some other two-year limitation in the policy based on your type of disability. You must not ignore this limitation. The limitation must be appealed if you have a disability not subject to the limitation. The 24-month limitation could also be a reference to the policy provision that states for the first 24 months you will receive benefits if you cannot do the same job you were doing when you became disabled, that is, your “own occupation.” After this 24-month period, the policy may state that you are disabled only if you cannot perform “any occupation.” These limitations result in a counter-intuitive situation in which you have to appeal the decision even though you have been awarded benefits.
WHEN THE COMPANY SAYS I AM NOT DISABLED, DO I NEED A LAWYER FOR MY APPEAL?
Yes. If your disability insurance benefits have been denied and your disability insurance company will not pay your claim, you will have a chance to appeal the denial. You should submit all of your evidence by the deadline for submitting the appeal. This means all medical records, statements of your physicians, reports of expert witnesses, which often must be engaged in order for you to win your case, your own statement, evidence discrediting surveillance which is almost always part of the record, and other important evidence. You will have an opportunity to address adverse evidence relied upon by the Company in deciding the appeal. After that, there is no opportunity to build your case. There is no trial. The Court will decide your case only on the documents submitted. You must submit an appeal of the denial of short-term and long-term benefits and receive a final decision before you can start a lawsuit in federal court. If ERISA applies, the company will give you 180 days within which to submit your appeal. Given what you have to do to win your appeal, that is not much time. You need a lawyer who is experienced in this specialized area of law and who can quickly become ready to sue your disability insurance company.
WHEN THE COMPANY SAYS I CAN PERFORM “ANY OCCUPATION” DOES THAT MEAN ANY JOB WHATSOEVER?
No. After paying two years of benefits, your disability insurance company may stop payment of your disability benefits into the future because it says you are able to perform “any occupation.” This does not mean that the company has a right to require you to perform any job at all. “Any occupation” means an occupation which is compensated at a reasonable rate and is reasonably related to work you can do taking into account your training, education, and experience. If you have an individual policy you most likely will have purchased coverage for your “own occupation” beyond the 24-month limitation so that you will not have to clear this hurdle at the end of the two-year coverage limitation in ERISA policies.
WHAT IF I APPEAL MY CASE AND THE COMPANY GIVES A DIFFERENT REASON FOR DENYING MY CLAIM ON APPEAL THAN THE ONE THEY GAVE WHEN THEY ORIGINALLY DENIED OR TERMINATED MY BENEFITS?
If your short-term or long-term disability benefits are denied or terminated on appeal for a different reason than the one stated in the original denial letter, your recourse is to go to court. The Court may send the case back to the insurance company and you will have the opportunity to address all reasons for denial or termination stated in both the original denial and the appeal and make your case that you should get your short-term and long-term disability insurance payments.
WHAT IF I AM ABLE TO WORK PART-TIME, CAN I STILL GET BENEFITS?
Yes. Most policies provide for the payment of partial benefits if you are working part-time. Usually, if you are making 80% or more of your previous income, you will not be considered disabled at all and will receive no benefits. If you are making less than 20% of your previous income, you will be considered totally disabled and receive the full amount of the benefits to which you are entitled. In between, there is a formula for payment of partial or residual disability.
I HAVE A LETTER FROM MY PHYSICIAN SAYING THAT I AM DISABLED. ISN’T THAT ENOUGH TO GET BENEFITS?
No. Just a letter from a physician is not enough to get benefits. Your physician or physicians must have given you a diagnosis, have a record of your treatment, must restrict you from working for specific reasons, and must address your limitations all of which must be supported in the records.
ISN’T MY PHYSICIAN’S OPINION WORTH MORE THAN THE OPINION OF A PHYSICIAN HIRED BY A COMPANY THAT HAS NEVER EVEN SEEN ME?
Your own physician’s opinion is not necessarily given more weight than the opinion of the one hired by the insurance company. The physician hired by the insurance company must, however, fully address all of your medical and other evidence such as surveillance. So long as the evidence of the insurance company addresses all of your evidence and there is a rational basis for the company to deny or terminate benefits, a court will rule in favor of the insurance company. This is called the “arbitrary and capricious” standard of review. An individual policy is usually quite different. The jury or court will look more closely at the medical evidence in the file and will find in favor of the party with the most persuasive evidence.
THE COMPANY WANTS ME TO GET AN EXAMINATION BY A PHYSICIAN IT HIRES. DO I HAVE TO GO THROUGH WITH THAT?
Yes. Disability policies and the law of ERISA give the company the right to have you examined by a doctor or other expert of its choosing. If you have an individual disability policy, you may have to submit to this examination as part of the discovery process in state court.
WHAT IS THE DEADLINE FOR FILING A CASE IN COURT?
If you have an ERISA case, there is no deadline for filing a case in court that applies in every case. Theoretically, the “statute of limitations” in the state where you would start a court case is the law that the host state has for deadlines for contracts or other types of cases. This is very rare. The deadline for filing an ERISA case is governed by the terms of the policy and involves a complicated analysis of various provisions, for instance, “elimination periods” and “proof of loss.” and how they intersect. This is called a contractual statute of limitation which a court will enforce. Each policy has its own contractual limitation and must be carefully examined to ensure you start a court action before the contractual limitation bars you from doing so.
DO I HAVE TO FILE SUIT BEFORE AN APPEAL IS DECIDED?
You may have to. The Supreme Court of the United States has ruled that in some circumstances, the deadline to file suit may be calculated from the last day that you work rather than from the time the appeal is decided. So you may have to file suit and ask the court to hold the case in abeyance until the appeal is decided. This is counterintuitive and very important.
I RECEIVED A DOCUMENT FROM MY EMPLOYER WHICH EXPLAINS DISABILITY BENEFITS. DO I FOLLOW WHAT THIS SAYS?
Most likely your employer gave you a “summary plan description.” ERISA law requires your employer give this to you. It is only a summary and may not include some important provisions such as deadlines for filing suit. You need to examine the entire policy to know for sure what are your rights. Most likely your employer has not given this policy to you. If the summary plan description contradicts the policy, it is the policy, not the summary plan description, that will control even though the company never gave you the policy.
WHY DOES THE COMPANY INSIST I APPLY FOR SOCIAL SECURITY DISABILITY INCOME?
Most policies allow the insurance company to deduct from the benefits it pays, amounts you receive from other, listed sources which include Social Security Disability Income. Insurance companies will routinely give you the option of paying it back in a lump sum if you are awarded Social Security Disability Income retrospectively. It may also allow you to choose to deduct an estimated amount from your monthly benefits even if you are not yet receiving Social Security Disability Income benefits.
I AM RECEIVING SOCIAL SECURITY DISABILITY INCOME, DOESN’T THAT MEAN I AM DISABLED AND ENTITLED TO BENEFITS?
No. The insurance company must consider the fact you are receiving Social Security Disability Income in its analysis of your claim but is not required to pay benefits just because you are getting Social Security Disability Income. The reason given by the insurance company is that the law controlling the right to disability insurance benefits is different from the law controlling the right to Social Security Disability Income benefits.
HOW CAN I PAY ATTORNEY’S FEES WHEN I HAVE NO INCOME?
You have the option of going forward with your case by paying an hourly rate with an advance against fees or on a contingent fee basis which means that if benefits are ultimately paid, you will pay from your benefit a percentage in attorney’s fees. If no benefits are awarded, there will be no attorney’s fee. You only pay if you win. ERISA allows a court, at its discretion, to award attorney’s fees but that is only for fees incurred from the time a lawsuit is filed.