5 Common Long Term Disability Insurance Misconceptions

1. I am unable to work in my job; therefore I should qualify for disability benefits under my employer-provided insurance plan.

Just because you are disabled from your specific job doesn’t mean that your employer-provided disability insurance policy considers you disabled. Disability policies always have their own definition of “Total Disability.” A participant is disabled only if they meet the plan’s definition. That definition may define disability as “Your Occupation,” which may be your occupation as it exists in the national economy and not specifically how you do your job. Or the definition might be “Any Occupation,” which means you only get disability is you are unable to work in any occupation. This is a generalization of a complicated issue of disability law but it shows that just because you have a disability policy from your employer, it doesn’t necessarily guarantee that if you can no longer do your job for your employer that you will be eligible for disability benefits.

1. My Doctor will take care of getting me my long term disability insurance benefits.

Your doctor’s job is to treat your condition, not to advocate for you to the insurance company. Expecting to place all your eggs in your doctor’s basket when it comes to proving you are disabled under your long term disability policy is a big risk. While most doctors are willing to fill out a form for the insurance company, doctors are not aware of the plan language under which you must be found disabled. If the doctor doesn’t know how “Your Occupation” of “Any Occupation” is defined, how is your doctor able to adequately convey the necessary information to the insurance company? In addition, if all you do is send the insurance company a “blank check” release to communicate directly with your doctor you have no idea what information, if any, is being provided on your behalf, which brings us to the next common misconception.

1. If I am unable to prove my disability during the administrative process with the insurance company, I will get a second chance to do it in court.

The administrative process for any disability insurance claim is the period from when you file a claim for disability benefits to the point where you are finally denied those benefits thereby exhausting your administrative remedies with insurance company. Only after you go through all of the administrative appeals, can you file suit in court. While you can hire a lawyer at the end of the administrative process and that lawyer can file suit on your behalf, the court treats a disability lawsuit like an administrative appeal. This means that you are confined to the evidence that was submitted in the administrative record. The administrative record is the evidence you or your doctor provided to the insurance company during the administrative process. Therefore, if you failed to provide adequate proof of your disability during the administrative process, you usually cannot provide new support for your claim in Court. Courts only allow discovery – the inclusion of new evidence – under very rare circumstances in which there is reason to believe that the insurance company operated in bad faith.

1. The insurance company was wrong to deny my employer-provided disability insurance benefits, and a court judge will see that and grant me my benefits.

The law that governs employer-provided benefit plans, ERISA, has a very strict standard of review. Under ERISA a judge can review a disability denial de novo – anew with fresh eyes – only if the insurance company does not reserve discretion in the plan document. Discretionary language in a plan confers on the plan administrator the exclusive right to administer and interpret the plan terms. This is the best possible scenario because the judge does not have to defer to the insurance companies decision and can review all the material and make a new decision. Unfortunately, most insurance companies are wise to this and have included the discretionary language in their plan documents. The presence of this language limits the court’s power to only review the denial under the deferential “arbitrary and capricious” standard of review. This means that the judge can only over turn the insurance company’s decision to deny benefits if that decision was arbitrary and capricious. Therefore, an insurance company’s decision can be wrong, but the judge must uphold that decision as long as the decision was not arbitrary and capricious.

1. If I file suit to get my employer-provided disability benefits, I will be able to get other monetary relief.

The law that governs employer-provided benefit plans, ERISA, does not allow for monetary relief, only equitable relief in the form of the benefits due under the terms of the plan. This means that if you succeed in court, you can only get the benefits due you in the form of arrearage (with interest) and reinstatement into the plan. You will not be able to recover any additional money if say you lost your house or racked up a lot of credit card debt while you were without your disability income. In addition, while attorney’s fees are allowed under ERISA, there is no guarantee of receiving them. An attorney must petition the court for fees and the Court in turn could either reduce or deny altogether the fees. This makes it hard for attorneys to accept disability cases.

As you can see, these cases are difficult to pursue, especially without the assistance of an attorney. It is usually wisest to consult with a knowledgeable attorney early on in the process to ensure you the best chance of obtaining your disability insurance benefits. If you have been denied long term disability insurance, please contact Walsh Woodard LLC’s disability team today at (860) 549-8440 for a free consultation.