Welcome to our frequently asked questions page. While we cannot offer legal advice (because you are not yet our clients), we do provide general information addressing many of the inquiries people tend to make concerning their disabilities, their policies and their plans. We hope this helps you.
Q. What is a disability insurance policy?
A disability policy is an agreement between you and an insurance carrier. This “agreement” typically provides that, if you become disabled, you are entitled to receive benefits on a monthly basis for a fixed period of time specified in the contract, for as long as you continue to be disabled during that period. Some policies provide that you may only receive benefits until you reach your 65th birthday. Other policies state that you are entitled to benefits for “life.” Still others provide for other durations depending upon the type of disability you suffer from (e.g., physical or mental-nervous condition) or on how you became disabled (e.g., sickness or accident).
Q. How do I know if I am disabled? And what is an “own-occupation” or “own-occ” policy?
Whether or not you are disabled within the meaning of the policy depends on the conditions from which you are suffering and the language of your policy. Under some policies, you are considered disabled if you are unable to work in the specific occupation in which you were engaged at the time you became sick or were injured. This is commonly known as an “own occupation” or “own occ” policy. Policyholders prefer these policies because, if you are unable to work in your chosen occupation, but could, for example, still work in another occupation, you are nonetheless considered disabled under your policy. Why? Because under the terms of an own-occupation policy, you are disabled once you are unable to perform the duties of your chosen occupation even though you may still be qualified to some other type of work.
Insurance companies will review the medical records from your doctor to ascertain your diagnosis and whether you meet the disability definition under your policy. Insurers may also arrange for a medical examination by a third-party physician and examine additional information and data. Insurers are supposed to consider all of this material in rendering a fair determination. Unfortunately, insurers often fail to undertake an independent review.
Q. Are there policies that are not “own-occupation” “own occ” policies?
Yes. These policies, which generally have much lower premiums, provide disability payments only when you are unable to work, not only in your chosen occupation, but in any occupation for which you are suited by reason of your age, education and experience. In other words, if you are unable to work in your chosen occupation because of your disability, but are still qualified to do any other type of work, even if it’s less desirable, you are not considered disabled under these policies.
Q. Do I need a medical doctor to attest to my disability?
Although disability policies differ from company to company, all of them invariably require that your medical doctor or osteopath attest to your disability. This ordinarily requires the doctor to prepare an “Attending Physician’s Statement.” This APS is submitted along with all of your paperwork at the time you file for disability benefits
Q. Do I have to submit to a medical examination by one of the insurance company’s doctors?
Ordinarily, yes. Most policies include a provision that imposes upon you, as the policyholder, the requirement to submit to a medical (or, if the disability claim arises from a psychiatric condition, then a psychiatric) examination by a physician of the insurance company’s selection. These examinations are often referred to as “independent medical examinations” or “IMEs,” but they are generally not “independent.” Most physicians selected to perform so-called “IMEs” have an institutional bias in favor of those who employ them – the insurance companies. To counteract that bias, we investigate doctors prior to the examination to ensure that they will not skew findings against our clients. In addition, we send a paralegal escort to all examinations to observe, take notes and take other actions to safeguard the integrity of the process.
Q. Can I object to the selection of a particular doctor for an IME?
It is possible to object, but the process of persuading the insurer to change its doctor must be carefully handled. Most policies have special clauses that require the policyholder to cooperate in the claims process. If a disabled policyholder refuses to proceed with an examination, the disability claim can be denied on that refusal alone and, if the court determines that the refusal was unreasonable, the policyholder will be denied benefits even if he or she is severely disabled.
Over the years, we have occasionally required insurance companies to select a different physician for the examination, but the situation was carefully handled in each instance. We strongly recommend that, if a policyholder believes a physician selected by the insurer will be so unfairly biased that it will irreparably compromise the disability claim, the policyholder seek professional guidance. Otherwise, the disability claim could be rejected for non-cooperation irrespective of the merit of the claim.
Q. What is the difference between a group disability plan and an individual disability policy?
A group disability plan is ordinarily obtained through your employer. Your insurance premiums are typically deducted from your paychecks. If you are part of a group disability plan, you should have received a booklet or other document entitled a “Summary Plan Description,” which is a brief summary of your rights under the disability plan in which you are participating.
An individual disability policy is typically obtained from a broker or insurance agent by you directly rather than through your employer. Instead of a Summary Plan Description, you are given an insurance policy which includes the application that you completed prior to obtaining the insurance. Group plans generally do not include such paperwork.
The most important difference between a group disability plan and an individual disability policy is that a group plan is ordinarily governed by the Employee Retirement Income Security Act (ERISA). Individual disability policies are governed by general principles of contract law.
Q. Why does it matter if my insurance is provided through a group disability plan under ERISA as opposed to general contract law?
It can make all the difference in the world. First, when you are covered under a group plan governed by ERISA, if you become disabled and your request for benefits is denied, you must file an administrative appeal with the plan administrator (typically, an employee of the insurance company) who, in turn, refers your claim to an appeal committee. The appeal committee, which is also usually comprised of employees of the insurance company, has 45 days within which to sustain or overturn the decision by the administrator; however, the committee can extend that period by an additional 45 days. Under an individual disability policy, there is no required appeal (although many insurers will offer you one) and you can sue right away. Whether or not it’s advisable to participate in an appeal under an individual disability policy depends on your particular circumstances.
Second, in 1989, the United States Supreme Court ruled that, when a policyholder participates in a group insurance plan, including a disability plan, the administrator of that plan may include a provision that benefits decisions made by the appeal committee under the plan are entitled to discretion or deference to determine whether policyholders are entitled to benefits. This means that any decision on the administrative appeal that denies or terminates your benefits can be overturned or reversed by the courts only if the policyholder proves that there was no rational basis for the denial or termination of your benefits in the first place. This is a much higher burden for policyholders to meet than if their benefits are denied or terminated under an individual disability policy. In an individual disability policy, all policyholders need to show is that the insurance company made a mistake.
Please note that there are additional differences between group plans and individual disability policies, but the questions we have answered above are the most common questions clients ask us.
Q. My doctor just advised me to stop working. What do I do?
Whether under a group plan or an individual disability policy, your first and most important step is to notify your insurance carrier of your disability. The insurer’s contact information should appear in your Summary Plan Description if you are covered by a group plan or on the “Declarations Page” on your individual disability policy. If the contact information does not appear on the Declarations Page, it should appear elsewhere in the policy. You are certainly free to call the insurance carrier, but you should always follow up your conversation with a mailing (preferably by certified mail) or a fax. Be sure to retain your fax confirmation receipt. Why? Because most policies and plans require the policyholder (you) to provide notice of the disability as soon as reasonably practicable. Unexplained delays can be deemed unreasonable and a basis for denial of benefits irrespective of the merits of the claim. So, it is important to provide notice immediately.
Q. I have provided notice to my disability insurer. What do I do next?
You will receive a document package frequently entitled a “Proof of Claim” or sometimes referred to as an “Application for Benefits.” This package consists of a statement by you, a statement by your physician (APS) and an authorization for release of all of your medical records. Although policyholders ordinarily go about completing these forms as if they were filling out forms at the Department of Motor Vehicles, these are crucial documents which must be completed properly. These documents will determine whether you receive benefits or a denial letter. Failure to complete these forms correctly often results in a claim being red-flagged, derailed and denied.
Q. How quickly must I return these documents?
Most policies require policyholders to return Proofs of Claim forms within 90 days or “as soon as reasonably practicable.” One problem that often arises is that the APS from the policyholder’s doctor can take longer to return to the insurance company because doctors are sometimes slow to return them. We often advise clients to notify the insurance company when documents have been completed and to ascertain whether the carrier wants the papers to be submitted all at once or intermittently as they are completed.
Q. Do I need a lawyer to assist me in this process?
There is no legal requirement that you employ an attorney to assist you in the preparation or submission of a disability claim. Nonetheless, it can certainly be helpful, if not crucial, including under circumstances in which your disability claim involves: an undiagnosable condition; a mental illness or personality disorder; back and spinal conditions which are difficult to treat; or any disability claim filed with Unum Life of America, First Unum, Provident Life & Casualty, The Guardian; or Metlife.
Q. I hired a lawyer, but he wants one-third of my benefits if I win. Is that fair or even permissible?
Many disability lawyers work on a contingency-fee basis. That means they only receive legal fees if you recover benefits. Under a standard contingency-fee arrangement, you are still required to pay the lawyer’s expenses, such as stenographic transcript costs, filing fees, and related expenses.
Most jurisdictions do not have a set contingency rate for disability insurance lawyers; however, a one-third contingency fee is often used because that is the standard rate for personal injury lawyers. Whether or not this is a fair rate is an open question. If a lawyer sends a single letter to the insurance company persuading it to grant benefits, a one-third fee with respect to all of your benefits would seem unfair. Aside from being disproportionate to the work performed, a one-third fee can also impose a financial hardship on the policyholder who is disabled and unable to work in his or her chosen profession and needs the benefits to live on.
Q. Are there other types of fee arrangements?
Yes. There are typically two other types of arrangements: hourly and a hybrid-hourly.
An hourly fee arrangement means that you pay your lawyer a set amount for every hour he or she works on your case (e.g., $400 per hour, $500 per hour, etc.). Instead of paying a contingency fee at the end of your case and only if you win, you pay your lawyer every month as you are billed regardless of the outcome. While this is typically more expensive than a contingency arrangement in the short term — because you’re paying fees every month rather than at the conclusion of the case — it is generally much less costly in the long term. This is because a one-third contingency fee, paid over the life of your benefits cycle, will almost always exceed by a substantial margin the amount you would have paid had you done so hourly.
A third type of arrangement is a hybrid hourly fee arrangement. This is a reduced hourly rate, plus a reduced contingency fee. This means that you pay each month, but your bills are considerably lower and the contingency fee is also less. In the end, this fee arrangement ordinarily results in the lowest fee payment by the policyholder.
Q. My lawyer is a personal injury attorney, but believes that he/she can handle my case. Is that ok?
Typically, no. Personal injury lawyers are well versed in handling personal injury cases; however, disability insurance law and ERISA are discrete areas of specialization. The issues presented in disability insurance law and ERISA are often complex and subject to different rules, deadlines and standards than other lawyers are accustomed to addressing. Asking a personal injury lawyer for advice on these matters is like calling a dermatologist to treat you for lung cancer. Irrespective of which firm you select, be sure that it has a proven track record of handling disability insurance and/or ERISA cases.