COVID-19 Update: How We Are Serving and Protecting Our Clients.

It can be confusing trying to figure out the amount of Long Term Disability Insurance benefits the insurance company should pay.  Here is a brief outline of how the amount is commonly determined.

Step 1.-Figure out your base monthly income.  (Take your yearly income and divide by 12.  Beware however-commonly excludes overtime and bonuses.)

Step 2.  Multiply by the benefit percentage listed in the Insurance Policy.  Commonly 66 2/3%.  (However, I have seen many other rates from 40-70%.)

The team at SMDA recently obtained a favorable administrative decision reversing Cigna’s (Life Insurance Company of  North America) decision denying disability insurance benefits for a Registered Nurse who had been disabled by her treating physicians as a result of  her significant orthopedic (back and shoulder) problems.  The original denial was based primarily on the fact that the claimant was neurologically intact with normal strength and reflexes indicated in the treating medical records.

SMDA prepared a comprehensive administrative appeal including disability statements from the client and her treating physicians, medical records and peer reviewed medical journal articles.  We were able to establish that an individual with normal strength and reflexes may still suffer from disabling pain which interferes with their ability to perform the material and substantial duties of their occupation as a Registered Nurse. The disability insurance company overturned the denial decision retroactively reinstating the disability benefits and placing the client back on claim.

 

SMDA recently convinced  LTD insurer Cigna to overturn its claims denial decision for a registered nurse who developed significant low back pain that prevented her from performing her own occupation.  Our client had degenerative disc disease that had progressed over the years eventually leaving her unable to work.  Cigna initially denied her claim finding she was not disabled.

SMDA filed a comprehensive administrative appeal which established that the functional limitations the client experienced made it impossible for her to perform the material duties of her own occupation.  Cigna overturned the claims denial decision and agreed to retroactively reinstate her LTD benefits and put her back on claim.

SMDA recently convinced Cigna (Life Insurance Company of North America) to overturn a claims denial decision for an individual who is suffering from significant cognitive deficits as the result of some as yet undiagnosed condition.

SMDA prepared a comprehensive administrative appeal of the claims denial decision including neuropsychiatric testing which demonstrated significant deficits in various cognitive domains which clearly preclude the insured/client from performing the duties of his own (or frankly any occupation).

We applaud Cigna for making the right decision on this claim and reinstating our clients Long Term Disability benefits.

Almost every Long Term Disability Insurance Policy I have ever reviewed contains a limited period (usually 24 months) of time that it will pay benefits if a claimant is unable to perform the duties of his/her “Own” (see prior post on how “Own” occupation is misleading) occupation. The plans most commonly contain a change in the definition of disability from “Own”occupation to “Any” occupation after the 24 month period runs. So, after 24 months the claimant must be able to establish that they are unable to perform the duties of “Any” occupation in order to continue to receive benefits. A few caveats-there is also usually a qualifier for “Any” occupation that the claimant may be qualified to perform the identified occupation by education, training or experience. There is also usually an earnings qualified that the identified “Any” occupation must usually pay some percentage (commonly 60 or 80%) of the claimants “Own” occupation.

We see many claims where the Long Term Disability insurer refuses payment past the 24 month “Own” occupation period by identifying some less demanding occupation it asserts the claimant can perform.

I was recently asked to review a claim denial by a well know disability insurer for a nice lady who suffered a terrible crush injury to her foot. She had worked at a production facility where her job duties required her to be on her feet for extended parts of the work day. Her employer was not able to accommodate her standing restrictions so she filed a claim for LTD benefits with Lincoln Financial. The Lincoln policy defined her “Own Occupation” as a collective description of related jobs, as defined by the US Department of Labor Dictionary of Occupational Titles. It includes any work done for pay or profit, regardless of: 1. whether such work is with the employer, or some other firm…; or 2. whether a suitable opening is currently available with the Employer or in the local labor market.”

Despite the fact that her employer would not allow her to return to work if she was unable to stand for extended periods of time, Lincoln’s in-house vocational consultant determined that her Occupation was best defined as a Project Planner. Lincoln then denied her claim for benefits finding that her “Own Occupation” could be performed sitting most of the time at some other employer. Since she had already exhausted her administrative remedies we were unable to offer any evidence to supplement the record.

This is a classic example of the difficulty with LTD claims. The insurers policy language allows them to disregard the actual duties of a claimant’s own job in favor of some imaginary “collective description of related jobs” which, in effect, turns logic on its head. Even though your own employer specifically says you must be able to stand for 80% of the day, Lincoln says “your occupation” can be performed sitting most of the time.

In this recent case out of Louisiana the court rejected Cigna’s (Life Insurance Company of North America) efforts to deny a claim by a man who was permanently paralyzed and wheelchair bound. The claimant, Mr. Hughes, had been employed as an electrician when he was forced to stop working as a result of his paralysis. While Cigna initally approved his claim for LTD benefits in 1999, what followed was very troubling.

Despite the fact that he was permanently paralyzed and wheelchair bound, Cigna denied his claim for benefits on at least 4 different occasions. The last denial because he “failed to provide requested documentation.” After the last denial Mr. Hughes failed to file an administrative appeal within 180 days as the denial letter advised. When he finally did appeal, Cigna denied the appeal as untimely.

Mr. Hughes hired an attorney who filed suit claiming that the actual Insurance Plan did not mandate an appeal within 180 days. The Court agreed rejecting Cigna’s argument that Mr. Hughes administrative appeal was untimely. The Court then found:

A US District Court Judge recently granted a motion filed by SMDA granting LTD benefits to one of our clients.  The Court found that the third party administrator had abused its discretion in recommending a denial of benefits.  The Court found that the client’s serious back problems along with the multiple powerful pain medications prevented him from performing the duties of his own occupation.

SMDA partner, Patrick Derkacz, recently recovered $1.2 million dollars on behalf of his seriously injured clients.  Mr. Derkacz convinced State Farm to pay this significant settlement the day after taking the deposition of the at-fault driver who offered testimony  that he was not responsible for causing this rear end accident.  The at-fault driver tried to blame everyone but himself, including the seriously injured driver of the car he struck for not traveling the minimum speed on the freeway.  (The  freeway traffic was slowing to a stop for a previous accident!)  State Farm likely realized that any potential jury would not look kindly upon Defendant’s ridiculous testimony.

This significant recovery should help the elderly couple injured in the crash the economic cushion they need to live their lives as they wish.

Anyone familiar with LTD Insurance claims and ERISA knows that you must first exhaust your administrative remedies before filing suit. In other words, you have to try and convince the LTD insurer to reverse its decision to deny the claim for benefits. While this may seem like an difficult task since the LTD insurer who makes the claims decision is the same entity that pays the claim, it is not impossible.

SMDA has been fortunate to convince CIGNA to reverse its LTD claims denial decision in several consecutive recent claims.

The first client was experiencing significant back problems as a result of degenerative disc disease. She was unable to continue her job as a customer service representative for a dental services company. The second client had a number of medical problems including pretty severe carpal tunnel syndrome which caused problems with any repetitive hand movements. Unfortunately, she was unable to do her job which required non-stop typing.