For those who have successfully fought to have a disability claim approved, they want it to stay that way. When the letter arrives from an insurance company seeking an update in status, most claimants begin to worry – and rightly so. As the Western District of Michigan federal court wisely observed fifteen years ago:

The plan and insurance language did not say, but the world should take notice, that when you buy insurance like this you are purchasing an invitation to a legal ritual in which you will be perfunctorily examined by expert physicians whose objective it is to find you not disabled, you will be determined not disabled by the insurance company principally because of the opinions of the unfriendly experts, and you will be denied benefits.

Loucks v. Liberty Life Assurance Co. of Boston, 337 F. Supp. 2d 990, 991 (W.D. Mich. 2004) (vacated following settlement).

Under the terms of their contracts, disability insurers are entitled to request continuing proof of loss.  So, it is also reasonable to expect that that a disability claimant will be called upon to provide updated medical proof of their condition and disability. This does not mean that an insurer may act unreasonably in requesting continuing proof of disability, only that an insurer may reasonably request updates on a claimant’s medical status.  For a disability claimant receiving a monthly payment, it should be acknowledged that once the payments begin the claim is not over.  The only way to effectively deal with this climate is get out in front of it.

Here are our suggestions:

  1. Go to every doctor’s appointment with a list of continuing physical (or if applicable psychological) limitations. Don’t leave a single thing out.
  2. Document and report every single side effect of your treatment or medication.
  3. Document and report every unique episode (a fall, a forgetful spell, or a day spent in bed) and timely make your doctor aware.
  4. Do not miss doctor’s appointments. If you anticipate a problem, reschedule right away. Under no circumstances should it ever be listed that the claimant was a “no show.”
  5. Make sure the doctor has documented everything before you leave.
  6. Routinely request copies of your records and make sure they are complete and correct – before they are requested from an insurance company.  Best practice would be to request a report be sent to you after every visit.

Successfully securing a disability claim approval is a victory to be sure – yet take care to follow the steps set forth above, or it can be short lived.

“My doctor will support me.”

This is one of the most common expressions heard from clients dealing with an ERISA long-term disability insurance claim. Disability claimants know, perhaps without formal recognition, that their disability insurance claim requires a solid evidentiary foundation. Most claimants realize they carry the burden to prove their claim and recognize that a claim requires medical proof – not merely a statement of one’s inability to work. In fact, most of our clients recognize this immediately, even before meeting with us. A disability claimant’s treating physician will likely play the most important evidentiary role in a disability claim, as they are the one providing at least the baseline medical foundation to support a claimant’s contention that they are occupationally disabled.

While disability plan insurers are not bound to accept a treating physician’s opinions without scrutiny, “plan administrators, of course, may not arbitrarily refuse to credit a claimant’s reliable evidence, including the opinions of a treating physician.”  Black & Decker Disability Plan v. Nord, 538 U.S. 822, 834 (2003).

What is important for not just disability claimants but also their physicians to understand is the integral role treating physicians play in a disability claim, and how to successfully navigate that interdependent relationship as it moves from providing treatment to providing evidence.  Below are a few suggestions for consideration toward understanding and enhancing these critical relationships.

1)            Establish a Trusted Relationship.   First, it is important to let your doctor know about your disability claim and keep them updated on its status. Most treating physicians are familiar with disability claims and are willing to help their patients through the process. It is best to tell your physician, up front, that you are filing a claim and are likely to need some help with the claim forms. You may also want to use this as an opportunity to thank your physician for his or her anticipated cooperation and to communicate that you will try not to impose too much.

Some physicians do refuse to be a part of the disability application or appeal process. If your physician is unwilling to assist, do not be upset – it is better to know, preferably as early as possible. Nothing is worse than sending Attending Physician forms to a doctor whose office says they refuse to deal with insurance companies. While unhelpful, this position is somewhat understandable since paperwork is time-consuming and often uncompensated. In our experience, physicians work extremely hard and their compensation, often dictated by insurance companies, is below their fair value. They simply may not be able to financially perform this extra work.  (Note: your disability insurer knows this).

2)            Consider A Referral to A Specialist.  Depending on your condition, you may need to consult a specialist.  Again, timing is critical.  Specialists can book appointments three to four months out.  You need to consult, begin treatment with, and then, once the relationship is established, enlist their assistance. When it comes to the requirement for submitting “proof of disability” or “proof of claim,” sometimes more is required than the findings of a family doctor or internist. Here, the medical examination is centered on establishing one’s functional abilities. A treating physician may be fully capable of assessing the patient’s condition. For others, a specialist such as a Physical Medicine and Rehabilitation (PM&R) doctor may be appropriate.

3)            Allow the Physician Plenty of Time to Respond.  All claims forms have a due date, so don’t delay.  These forms are sometimes ambiguous and confusing – if there is any confusion over what is being requested, you may want to consider hiring counsel since even a minor mistake on a form can exponentially complicate the claims process or even lead to a denial.  That said, the forms should be in the hands of the doctors as soon as reasonably possible. The forms should also be reviewed after completion by a physician but before return to the insurance company.  A mistake or misunderstanding can add as much as one year of delay in resolving a valid claim.

Given the importance of these forms, a claimant should be considerate of a physician’s time and understand that a physician is typically not compensated for efforts toward supporting a disability claim.  Most physicians will help with a claim as an act of professional courtesy.  We have written about this previously.  See, Do You Have An ERISA Disability Claim? Print This Article, And Take It To Your Doctor.

4)            Be Willing to Compensate the Physician for Administrative Time. This is self-explanatory.  Politely inquire whether the physician is typically compensated for filling out forms and be willing to pay all reasonable charges.

5)            Explain that the Physician’s Involvement Will Be Minimal – No Depositions or Trial.

This is perhaps the most important and often overlooked part of an ERISA disability claim.  Most physicians are familiar with accident cases and workers compensation cases, yet lack familiarity with ERISA disability case. This presents a slight problem when physicians mistakenly believe they may be “called to testify” if they provide a professional opinion on a claimant’s medical and/or functional status. In practice, however, ERISA does not provide for trials, depositions, or live testimony.  At most, the physician will be asked (usually by the claimant’s lawyer) to supply a sworn statement or medical narrative.  This is part of a written submission or appeal for the claimant.  A physician will not be called to testify in a deposition or trial in an ERISA case.

In the Sixth Circuit (Michigan, Ohio, Kentucky, and Tennessee), there is a special “framework” for resolving disability cases, allowing federal courts to conduct a “review based solely upon the administrative record and render findings of fact and conclusions of law accordingly.”  Wilkins v. Baptist Healthcare System, Inc., 150 F.3d 609, 619 (6th Cir. 1998).  This means that cases are decided on written submissions such as motions. While Wilkins did recognize that there are times when discovery is appropriate against an insurer or plan administrator, this does not include depositions of the treating physician.[1]

Bottom Line:      Establish a strong and courteous relationship with all treating physicians.

Explain to your physicians your need for their assistance with your claim.

Be willing to pay all reasonable charges for any administrative work, including completion of forms and preparation of medical narratives.

Don’t Delay!

[1] For more information about the Wilkins review process, see, see, John J. Conway & Trever M. Sims, Refining Wilkins: A 20-Year Look at the Recurring Factors Used in the Sixth Circuit’s Resolution of Disability Claims Under ERISA Section 502(a)(1)(B), Sec. II.B, WMU-Cooley Law (2018), available at: https://issuu.com/cooleylawschool/docs/wmu-cooleylawreview-34-2/94.

It is one of the most commonly asked questions by disability claimants who have successfully battled their disability insurance companies to overturn a denied or terminated disability claim. They have won, but there is one lingering question:

Can my insurance company cut me off again?

Technically, the answer is “yes.” Most disability law practitioners have tried to couch the answer to that question based on their experience with the nation’s major insurance companies.  For some insurers, once you have beaten them, they are reluctant to put you through it again.  For others, it is one successive battle after another until they skate dangerously close to violating ERISA Section 510 (the statute’s prohibition on the intentional interference with one’s benefits).

Now, some federal courts are providing claimants a little more optimism about the future.  There is an oft cited, little used provision, tucked away in ERISA Section 502(a)(1)(B) which empowers a participant “to clarify his rights to future benefits under the terms of the plan.” (Emphasis added).

That portion of the (a)(1)(B) provision is gaining new potency after a series of decisions where federal courts in the Pacific Northwest have weighed in on its meaning.

In Gorena v. Aetna Life Ins. Co., No. 17-532, 2018 WL 3008873 (W.D. Wash., Jun. 15, 2018), while reviewing that provision, the district court ordered the payment of past due disability benefits to the claimant and placed real, substantive limits on an insurer’s ability to terminate a claimant’s monthly payments.  The district court held that the defendant was

directed to pay [the plaintiff’s] LTD claim to the policy’s maximum benefit duration absent a showing of improvement in her medical condition such that a reasonable physician would conclude that she could work in “any gainful activity for which [she is], or may reasonably become, fitted by education, training, or experience and which results in, or can be expected to result in, an income of more than 60% of [her] adjusted predisability earnings.” Unless Defendant can establish that Plaintiff is capable of performing such work productively, full-time, and without undue disruptions and/or absences due to her MS and its related symptoms, she is to continue to receive LTD benefits to the Plan’s maximum duration.

(Internal citations omitted). A similar resolution was reached in Bethany Coleman-Fire v. Standard Ins. Co., No. 18-cv-00180, 2019 WL 2011039, at *13 (D. Or., May 7, 2019), where the district court cited to a previous version of the Gorena ruling and held:

Accordingly, and in accordance with 1132(a)(1)(B), the Court offers the following clarification regarding Plaintiff’s right to future benefits: Subject to the terms and conditions of the Plan, Defendant shall pay Plaintiff’s LTD claim to the Plan’s maximum benefit duration absent a showing of improvement in her TBI/PCS symptoms such that a reasonable physician would conclude that Plaintiff could work more than forty hours per week in her Own Occupation.

With federal courts now appearing more apt to tackle the meaning of ERISA’s clarification provision, hopefully practitioners will be able to provide more resolute answers when a client asks the question, “will my insurance company cut me off again?”

Stay off social media if you have a long-term disability claim.

We have written about this issue before. See, Long-Term Disability Insurance Update: An Online ‘Friend’ You May Not ‘Like.’

Perhaps one of the most overlooked features about ERISA disability claims is the fact that, since most jurisdictions generally restrict the ability of parties to conduct discovery, the fact gathering process is a little like the Wild West.  Claimants gather their own evidence outside of the formal discovery rules used in federal court.  Disability insurance companies gather their own evidence in this way as well.

Nearly every claim we review for our clients contains the insurer’s detailed social media investigation report – this is part of why disability claimants are being asked for their email addresses on claims forms. Disability insurers like Aetna, Unum, Reliance Standard, CIGNA, and Life Insurance Company of North America, as well as administrators like Sedgwick, are now reviewing social media activity as a part of their investigatory process.

Armed with an email address, the insurance company’s investigators can track Facebook, Twitter, and perhaps even dating sites. Exploiting the failure to activate privacy controls on publicly-viewable pages, these insurance companies can examine your life as told through your family and friend’s posted photographs and videos.   Those images are downloaded or screen-captured and then put into the claims file – sometimes in a totally dishonest or misrepresentative arrangement.

For those accustomed to litigation under the Federal Rules, the fact that much of this stuff has not been authenticated is particularly galling.  Nevertheless, it is usually admitted without so much as an objection when those administrative records are filed with a federal court.

Recently, a Nevada federal court put the brakes on the weight given to such social media posts in terminating a benefit claim.  In Williamson v. Aetna, No. 2:17-cv-02653 (D. Nev. March 31, 2019), the disability insurer terminated a long-term disability claim based, exclusively, on its capture of social media posts (which it failed to independently verify) and an 11-minute surveillance video. The district court found that the insurer’s decision to base its determination on this type of non-medical evidence violated ERISA.  Here the Court opined that it found

that Defendant abused its discretion when it terminated Plaintiff’s disability benefits absent medical evidence that her disabilities had improved. To the extent Defendant relied upon Plaintiff’s Facebook and dating website postings, the Court finds that such evidence is an illogical, implausible, and unreasonable basis for a revocation of disability benefits compared to the use of medical records. First, Defendant was aware of the inherent accuracy issues with such postings. Second, Defendant never sought to independently verify the posted information beyond the limited surveillance.

Notably, the district court zeroed in on the authentication issues without necessarily putting the case through an F.R.E. 901 formal analysis.  The district court found that “Defendant possessed no external evidence of when or where the posted photographs were taken.” The district court continued that “the Defendant did not ask Plaintiff when those pictures were taken or seek additional context” or seek “to actually verify the explanations provided by Plaintiff.”

Critically, however, the district court did find “it was not an abuse of discretion for Defendant to use the information gleaned from Plaintiff’s social media accounts as a trigger to investigate Plaintiff’s ongoing disability status.”  The district court held “that social media postings are minimally informative and inherently inaccurate as to a person’s medical symptoms and capacity for sustained employment. Such postings cannot plausibly constitute a basis for Defendant’s 2016 disability determination.”

Even though the district court narrowed in on the unreliability of social media evidence in disability cases, it still does not alter the bottom line:  Stay off social media during a disability claim.

What is the single greatest mistake long term disability claimants make?

Preparing their own internal disability appeal.

It is that simple.

A case worth hundreds of thousands of dollars can be converted to zero – near instantly – when a disability insurance claimant attempts to prepare his or her own administrative appeal.  There are several reasons for this, as discussed below.

No. 1.    Disability Claimants and Disability Insurers Have Grossly Unequal Resources

There is a complete disparity of resources when disability claimants attempt to take on their disability insurers.  Viewing this from the claimant’s perspective, what resources are typically available to the average insured person?  Presumably, there is a home computer or tablet, a printer, access to an internet fax program, and copies of pertinent medical records.   All these instruments and evidence can be used to assemble a homemade disability appeal.

By contrast, however, a disability insurer is often a multi-billion-dollar company, publicly traded on the stock market, with profit motivations designed to satisfy shareholders, including institutional investors.  It has significant financial resources – all of which are at the ready to be deployed against a disability claimant.  This is just the macro-picture of the disparity.

On the micro-level, disability insurance claims departments are populated by claims adjusters who have been trained to handle and process disability claims, oversee medical exams, and have been taught how to selectively read medical exam records.  Disability insurance companies have in-house physicians, nurses, and large expense accounts to pay unfriendly experts who routinely perform thousands of reviews and exams favorable to the insurers. Finally, the disability claim is one of typically 300 to 400 other claims these claims adjusters oversee simultaneously.  In short, they know how to deny a claim and are not able (or willing) to dedicate a material amount of time to review your medical as a true fiduciary should.

No. 2.    Not Fully Understanding the Reason for the Denial

A disability insurance denial is usually a lengthy letter. These letters contain required notices, citations to insurance contract language, several addresses, claims identifying information, and so on.   Sandwiched in-between all this writing is the rationale for denying the claim.  The rationale is the “why,” or explanation for why, a sought-after disability benefit is not being paid.  This can be confusing, even to the lawyers who work on these claims regularly.

For example, based on the language a disability insurance company uses to deny a claim, a claimant might mistakenly believe that the insurer is claiming they are not actually suffering from an illness when, in fact, the insurer is really disputing whether a person who is ill can still work.  Another often confusing rationale is the challenge to the supportive medical evidence.  By way of further example, is the insurer saying the evidence is non-existent or inadequate or is the insurer seeking another type of evidence altogether?  Furthering the opportunity for confusion, an insurer typically will not explain to a claimant the difference between objective and subjective evidence.  Misunderstanding why a claim is being denied can doom it.

No. 3.    Overlooking Critical Supporting Documentation

Medical records are obviously key evidence in supporting a disability claim.  The trouble is that medical records, alone, are rarely enough to the win a case.  The records require in depth explanation.  The records must be tied to showing a physical or mental limitation.  Often the records, themselves, provide foundation evidence for other documentation – such as a Functional Capacity Examination (FCE) or vocational rehabilitation analysis.  These are areas of expertise to which a claimant may not have ready access to make their case. Leaving out this crucial documentation can also doom a claim during the appeal process and leave a lawyer little to work with if the case eventually goes to court.

No. 4.    “Writing a Letter”

When was the last time you wrote a letter and the reader was so moved to start paying you instantly?  Has that ever occurred?  Has it even occurred to anyone you know personally?  In short, it does not happen.  As fine a person as you may be, no one will ever approve a disability benefit based on a written letter – no matter how beautifully composed or compelling in narration.

Somewhat cynically, disability insurers love receiving ‘a letter’ explaining why a person cannot work.   So long as that letter is not accompanied by medical evidence, the insurer will always be able to deny the claim based on no ‘proof of loss’ or ‘proof of claim.’  A disability claimant will likely never be treated better by an insurance company than in the 30-day period following their ‘writing a letter.’  The case is over, the insurer knows it, but the insurer does not want you to know it – yet.

The Bottom Line

While disability claims are not (lawfully) supposed to be adversarial, they truly are.  It is you against them.  You forget that rule at your peril.  No claims adjuster is there to help – their intention, and job, is to keep costs down by paying on claims as infrequently as possible.  They do their job the way that you did your job – they aim to do it well.  And doing it well means denying your claim.

Recently, we participated in a mediation with a large national insurer who is showing up more and more in our litigation files. Our client is a thirty-year employee who suffered from a terrible spinal condition and failed back surgery. Three medical treating physicians and an independent medical examiner found her totally disabled. One opined she was incapable of ever working again. She drained her 401(k) to pay her living expenses. She has applied for Social Security and is awaiting a decision.

The insurer denied the claim and has paid nothing for two and a half years while this financial wreckage has ensued.

The insurer’s claim denial was based upon a file review performed by a single East Coast doctor who never examined the insured and was contracted through a national vendor. The national vendor has a contractual relationship with the insurer.

The file reviewer’s report lists the medical evidence she claimed to have reviewed which includes MRIs (both actual images and reports). The file reviewer then opines that the restrictions could not be “substantiated” because there were “no MRI reports” in the file. This is not a misprint – the insurance company doctor lists the MRIs in the reviewed materials portion of the report and then somehow writes that those images do not exist.

Obviously, the denial is made in bad faith and is particularly sloppy.

At mediation, the insurer who has paid nothing now argues that the insured should get a mere stipend of because her “estimated” disability income is really the responsibility of the Social Security Administration, and the insurer merely provides a secondary benefit. We told the insurer to take a hike, and we will fight to get the decision and try to set precedent.

Unfortunately, this is the typical scenario in an ERISA group long-term disability case today.

More and more, private disability insurers who collect hundreds of millions in premiums are basically turning over the financial responsibility to the federal government to re-insure these private insurance contracts. Disability insurance companies argue this other income “offsetting” is keeping insurance rates low, but what they omit mention of is that this same “low-rate insurance” is not really insurance at all. All the insured has purchased is the right to apply for Social Security and maybe get a small stipend from the insurer.

The insurers have figured this out. The long-term disability contracts require an application to Social Security to get benefits flowing from the federal government, regardless of whether the insured even qualifies. Long-term disability contracts typically contain a 180-day waiting period (the same as Social Security). These same long-term disability contracts contain a “minimum” benefit usually of $100 per month.

Why do the insurance companies pay a $100 per month? Disability insurers know that an employee earning $40,000.00 a year with one or more dependents is really is never going to collect much private disability insurance, and if they don’t pay just a little something to the insured, the contract will fail for want of consideration. In other words, the contract will fail because the insured is getting nothing in return.

So, you have a long-term disability insurance contract, but do you really have any insurance coverage?

Western Michigan University-Cooley Law Review has published an article authored by J.J. Conway, Esq. and Trever M. Sims analyzing the Wilkins v. Baptist Healthcare Systems decision and its impact on ERISA benefits dispute resolution within the Sixth Circuit. The article, published in WMU-Cooley Law Review’s Summer 2018 issue, serves in part as a 20-year retrospective of what was, at the time, a concurring opinion in a seemingly routine disability benefits dispute. The article is entitled “Refining Wilkins: A 20-Year Look at the Recurring Factors Used in the Sixth Circuit’s Resolution of Disability Claims Under ERISA Section 502(a)(1)(B).”

The typical scenario in a benefits claim works something like this:  An employee becomes ill or injured.  An employee takes a medical leave of absence.  If the employer has sponsored a disability program, a claim for benefits is filed.  If there is a short-term disability plan, that benefit program may or may not be ERISA-qualified.  If the condition continues past the short-term period, then a claim would normally be expected to transition into a long-term disability claim. Often, the short-term disability claims administrator is also the administrator (and perhaps the insurer) for the long-term program.

In practice however, the rules and regulations applicable to disability claims tend to complicate matters.   If, for example, the short-term disability claim is denied or prematurely terminated, an appeal period is triggered. The appeal period runs 180 days, which can overlap with the commencement of the long-term disability coverage.

This is where trouble can start.

Sometimes a plan is written so there is a seamless transition from short-term to long-term disability.  The long-term disability benefit period will not start until the short-term benefit claim has been exhausted or paid out in full.   In other words, the filing of the short-term application will preserve an employee’s right to long-term disability benefits.  Sometimes, an application must be filed, regardless.

That is what the disability claimant in Kennedy v. Life Ins. Co. of North America, 718 Fed. Appx. 409, 410 (6th Cir. 2018) found out, the hard way, in a recent Sixth Circuit Court of Appeals decision.  In Kennedy, the claimant was receiving short-term disability benefits but had yet to file a claim for long-term disability benefits.  According to the Court, the “the first time” long-term disability was ever mentioned was in a demand letter, not an application. As a consequence, in a terse opinion, the Court affirmed the claim’s dismissal.  Writing for the majority, Judge Thapar wrote:

The district court was right: Kennedy never applied for long-term benefits. The first time he even mentioned long-term benefits was in his attorney’s letters—both of which came long after any such claim was due under the plan’s terms. Kennedy therefore failed to exhaust LINA’s administrative process.”  Id. (citing Garst v. Wal-Mart Stores, Inc., 30 Fed. Appx. 585, 593 (6th Cir. 2002)).

Bottom line: always file the long-term disability application or secure a written confirmation from the plan that the long-term disability claim is preserved while the short-term claim is being evaluated or appealed.

The U.S. Department of Labor has decided to implement ERISA disability benefits claims regulations. The regulations were proposed at the end of 2016, with a scheduled January 1, 2018 effective date.  The regulations were designed to ensure various due process protections of ERISA disability claimants under 29 U.S.C. § 1133 and 29 C.F.R. § 2560.503-1, as well provide guidelines for claims administrators for the treatment of certain evidence submitted in support of disability claims. The regulations are set to take effect on April 1, 2018 and will be applicable to all claims filed after that date.

On January 5, 2018 the USDOL announced the implementation would be delayed in order to assess the reasonableness of the regulation. The announcement issued by the USDOL stated:

The Department announced a 90-day delay of the applicability date of the final rule – from Jan. 1, 2018, through April 1, 2018 – to give stakeholders the opportunity to submit data and information on the costs and benefits of the final rule. The Department received approximately 200 comment letters from the insurance industry, employer groups, consumer advocates, and lawyers representing disability benefit claimants, all of which are posted on the Department’s website. Only a few comments responded substantively to the Department’s request for quantitative data to support assertions that the final rule would drive up disability benefit plan costs by more than the Department had predicted, cause an increase in litigation, and consequently reduce workers’ access to disability insurance protections.

Notably, the USDOL announcement also stated:

The information provided in the comments did not establish that the final rule imposes unnecessary regulatory burdens or significantly impairs workers’ access to disability insurance benefits.

The Summit previously discussed the changes in-depth in a prior post, which may be found here.

The Tort Trial & Insurance Practice Section of the American Bar Association has published an article authored by J.J. Conway, Esq. discussing the history and usage of Social Security Disability Insurance awards in long-term disability insurance cases.  The article, published in the Health and Disability Law Committee Newsletter, discusses the interplay between Social Security Disability Insurance Benefits and ERISA long-term disability benefits from both a financial and evidentiary standpoint. The article is entitled, “Tracing the Evidentiary Path of Social Security ‘Other Income’ Offsets in Disability Cases Through Statutes, Case Law, and Regulations.” (Winter 2017). The article is available here, Tracing the Evidentiary Path of Social Security Other Income Offsets in Disability Cases