Frequently Asked Questions About Virginia Disability Insurance Disputes
If you are dealing with a disability insurance denial in Virginia, you probably have a lot of questions. We completely understand - disability law can be complex and overwhelming.
BenGlassLaw is one of only a few law firms in Virginia that focuses a significant portion of the practice on handling long-term disability claims. Because of all the inquiries we receive about these cases, we decided to post up the answers to the most frequently asked questions here on the BenGlassLaw website.
If you would like to discuss your long-term or social security disability case with our team of experts, call our main office at (703)584-7277. (BenGlassLaw has satellite offices throughout Virginia to help clients across the state.)
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Do Additional Benefits, Such as Social Security Disability, Affect My Existing Long-term Disability Benefits?
Social Security can be beneficial to you as a disability claimant, but there are complications added benefits can have on existing benefits that you need to know.
Private long-term disability policies usually include a clause called an Offsetting Provision. This clause usually states that if you are currently receiving benefits (such as Social Security disability benefits), and you are awarded additional benefits, then your existing benefits will be reduced to your newly awarded benefits. Nearly all long-term disability policies require you to apply for Social Security Disability to create this offset.
In other words, “Other income gained offsets income paid through your disability insurer.”
Your total income will remain the same. However it will come from two or more sources. While this can be complicated, it is overall beneficial to you. Why? Say the insurance company decides to deny your claim. With diversified income sources, you would only lose the part of your income the denying insurer supplied.
This means that while you fight for those lost benefits in court, you still have an income to live off of. So on the surface, an Offsetting Provision may seem like the insurance company behaving selfishly, but it can help you in the long run.
What About "Retroactive Rewards"?
Beware careful with retroactive awards! Something to look out for is a lump sum check paid out for a past period as back benefits. Claimants are deservedly excited about this check. (We often get this for long-term disability claimants who work with BenGlassLaw to recover denied benefits.)
However, do not spend this money.
When the insurance company realizes you have been paid for back benefits by another source, they will realize they have overpaid you under the Offsetting Provision clause of your contract. They will bill you for their overpayment. The lump sum Social Security check will cover the bill for overpayment. It is imperative that you do not spend your lump sum back benefits check.
When Should You Hire a Lawyer After Your Disability Claim was Denied?
If the insurance company has denied your long-term disability claim, you have a limited timeline to appeal the decision. So, when should you hire an attorney?
Hire the attorney now.
If you are going to hire an attorney, hire them soon. The more time an attorney has to work with your case, the better prepared your claim will be. You know your story, but the attorney does not. He or she must work through your background and get all the facts, then write a legal appeal. That takes time, and every day, minute, and second counts.
What Happens If My Employer Offers a Severance Package When I'm Out on Disability?
About once a month we get contacted by an employee who is out of disability but is being offered a severance package to leave the company. The question arises: what about my disability claim with the company's disability insurance company?
The answer is that your disability claim may well end with the signing of the agreement if you are not careful. It does not have to be that way.
In almost every situation your disability claim is being managed by a big insurance company. (Aetna, Unum, MetLife.) What we see happening is that your employer's corporate lawyers draft boilerplate severance agreements which purport to extinguish "all claims" you may have against the company.
Whether or not your employer INTENDS to extinguish your disability claim, you can bet that the disability insurance company's lawyers (different from your company's lawyers and, frankly, with no allegiance to your employer at all) will argue that your disability claim is over.
Here's the consumer tip:
If you are presented with a severance package, you may need to consult with TWO sets of lawyers (unfortunately.) First, an employment lawyer familiar with severance agreements. You may also need to consult with an experienced ERISA disability lawyer to get an opinion as to whether signing the agreement leaves you vulnerable to having your disability payments vanish.
Can I Win My Disability Claim Without a Definitive Diagnosis?
With some chronic debilitating conditions, a firm diagnosis may be impossible to achieve, particularly if you are seeing more than one health care provider for care. This should not prevent you from obtaining long-term disability benefits if you cannot work. Now, the truth is that if you don't have a firm diagnosis, you will likely need the services of an experienced long-term disability attorney to help you put together your appeal. These claims can often be tough to prove, but our firm has extensive experience handling these kinds of claims and has helped countless Virginia residents regain their benefits after a denial.
Example of Claim Being Denied Due to Lack of Definitive Diagnosis
In a recent case, Metropolitan Life Insurance company was presented with a claimant who's doctor said he suffered from an "undiagnosed neurological condition," with secondary diagnoses of optic neuritis and fibromyalgia.
A functional capacity test showed that the claimant had reduced endurance for work and a vocational expert reported that the claimant would not sustain work on a regular basis.
MetLife denied the claim.
The court found that MetLife abused its discretion in denying the claim because:
- MetLife placed too much emphasis on the absence of a unifying diagnosis
- MetLife ignored the results of the functional capacity exam
- MetLife did not seriously consider the vocational expert report
- MetLife failed to have a valid conversation with the treating doctors.
Consumer Tip: documenting your functional impairment may be more important than arriving at a firm, agreed upon, diagnosis.
What Is the Most Likely Month That My Long-Term Disability Claim Will Be Terminated?
Most long-term disability policies provide that you will be paid benefits for 24 months if you meet the definition of disability and you cannot perform your "own occupation." After 24 months the definition of disability changes to "any occupation," meaning that you will only be paid if you cannot perform "any occupation."
(Note, these definitions do vary, policy to policy. Fax or email us if you live in Virginia and we will look at your policy for free and give you our analysis. Call us for the special fax and email contact information.)
We have handled over 1500 long-term disability cases and, an extensive analysis of our files reveals that if you are getting paid a disability benefit the most likely month that your benefits will be terminated is on the 21st month after payment started.
Why Will Your Benefits Be Terminated Early?
It is simply because the insurance company can save three months of payments. Multiply that by thousands of claimants, nationwide, and you can see how this affects insurance company profits.
The company knows that because of the change in definition at 24 months you will probably:
- Have a hard time finding a lawyer willing to take a chance on your case; and
- Just give up.
Don't give up. Read our free book on Virginia long-term disability claims to learn more about these cases and what you can do.
Can I Sue My Long-Term Disability Company for Bad Faith?
When your long-term disability benefits are denied or terminated, this can cause severe financial hardship for you. In addition to having your benefit check not arrive each month, you are going to have to find an experienced long-term disability attorney to appeal the denial or file suit.
That attorney will cost money.
You will almost certainly suffer emotional distress over the loss of expected benefits.
What about a "bad faith" case against the insurance company? Can you file one?
If the policy is governed by ERISA, (most employer-sponsored policies are), then there is no chance of recovering anything other than what the insurance company already owes you. You may also be able to recover attorney fees, but that is discretionary with the judge.
So the answer is "no," you cannot recover "bad faith" damages in Virginia for a denial of long-term disability benefits that are governed by ERISA.
If the policy is an individual policy or a group policy not governed by ERISA, you can sue for "bad faith" in Virginia.
The bad news is that if you win, the only damages recoverable are your attorney fees; plus, it is a very high bar that you must reach to recover bad faith damages.
The bottom line is that the disability insurance companies have a huge economic advantage over you in these cases. They know that on their worst day the most they usually face in court is having to pay you what they owed you in the first place.
(Fun fact: Complaining to Congress won't help much. They exempted themselves from ERISA.)
I Was on LTD For 2 Years, Now My Insurer Has Cut Me Off Because Of A Mental Illness Provision. What If My Disability Is Only Partially Based on A Mental Illness?
This is a great question for two reasons. First, because insurers use this trick frequently. They will often disregard all other disabling conditions and emphasize only your mental illness. Conveniently, this allows them to invoke their 2-year limitation, and stop paying you after two years.
If you feel you are disabled for different causes, only some of which are mental, then you may have been frivolously denied. Here is the general rule: when you have multiple causes for a disability, each must be considered in isolation. An example is the best way to explain. Say you have a diagnosis of depression and anxiety, as well as fibromyalgia. Now assume you have been on claim for two years for those disabilities. After two years, your insurer should, pursuant to any “mental illness” provision, stop considering your depression and anxiety. But that doesn’t mean they can ignore your fibromyalgia. It must still be reviewed to see if it, alone, is disabling. Conveniently, insurers often leave out that step, and simply terminate you because of the 2-year limitation.
Second, because there is always that question of which came first, the chicken or the egg?
Let me explain: people with chronic pain conditions and serious disabilities are often depressed, anxious, and have secondary mental illnesses. Your insurer will always try to say, as an example, “your depression makes your pain worse. Therefore you have a mental illness subject to the 2-year limitation.” What they are trying to do is to say a mental illness causes your other condition. Therefore they should all be lumped into the category of “mental illnesses,” conveniently subject to the contractual limitation. Again, you are entitled to separate review of separate disabilities. Furthermore, if your physical disability (or the like) is causing your mental illness, then logically it is the main disabling condition. It should be entitled to its own review.
As a final note, insurers are always looking to terminate your claim a mental illness claim. They always ask about your mental health and request psychological or therapy notes. They say it is to “help prove your disability,” but in reality, it to help give them a reason to terminate your benefits. If you have seen these types of requests, be warned: They are trying to find a reason to terminate your benefits early. Do not let them term your disability a “mental illness.”
I Was Awarded Social Security Disability. Does This Affect My Disability Insurance Benefits?
This is a question I hear, or a fact pattern I see, all the time. An award of social security disability (or SSD) benefits ALWAYS has an impact on your LTD claim. Allow me to explain the two ways in which it can affect your claim:
At a very basic level, winning SSD benefits is a sort of verification of your status as disabled. It is another independent organization concluding that you are, in fact, disabled. This doesn’t mean your LTD claim is safe, or will never be rejected/denied. Insurers love to overlook SSD awards. But it IS proof that another entity felt the evidence indicated disability. Obviously, SSD and your insurer use different standards in judging disability. However, by operation of law in many cases, your insurer cannot arbitrarily disregard the fact that you have been awarded SSD benefits. This is a good thing.
On a financial level, it has serious implications for your LTD claim. The VAST MAJORITY of disability insurance policies have “offsetting income” provisions (or the like). These provisions state that income from certain other sources offsets what your insurer pays you. SSD income is ALWAYS specified. What happens is best explained by example. Say AETNA/Hartford/UNUM/etc are paying you $2,000.00/month BEFORE you get SSD. All of a sudden, you get a letter from SSD saying you have been awarded benefits in the amount of $1,000.00/month going back 6 months. They pay you $6,000.00 (for the past 6 months), and they say you will get a check monthly for $1,000.00.
By the contract with your insurer, your insurer will now pay you $1,000.00/month ($2,000 - $1,000 = $1,000). This is good for many reasons. Most importantly, it diversifies your income and protects you in the event that one of your benefits is cut off. However, what about the fact that you were awarded “back-benefits” for the past 6 months?
You will owe that money back to your insurer. The award of back benefits means your insurer should have been paying you $1,000.00 less each month for the past 6 months. They will want that money back (when they realize it).
Which brings me to the advice: When you receive an award of SSD benefits, DON’T SPEND THAT CHECK!!! It is highly likely you will owe the majority of it, if not the entirety of it, back to your LTD insurer. Spend it, and the trouble starts.
Of course, in such a circumstance, speak with an attorney. Like I said, I see this issue all the time. I know how to negotiate a “repayment of overpayment” agreement that serves to help keep you on claim.
Can an Insurance Company Change Its Reason for Denial?
When disability insurance benefits are denied, the insurance company has to tell you WHY. Then you can appeal their decision, giving your reasons and supporting evidence for why they are wrong. When they evaluate your appeal, they are supposed to – by law – only consider the original reason they had for denying your claim and your arguments against that. If they decide you are right, you win – that’s the law.
Unfortunately, whether insurance company appeals managers don’t know the law or don’t care, sometimes they will do something incredibly frustrating – they will say “okay, you were right about ABC. But now your claim is denied because of XYZ.” This is called “changing the reason for the denial.” It is against the law, and it happens all the time. When it does happen, your only recourse is to file a lawsuit. This is why we say you MUST have an experienced attorney who understands disability insurance law (called ERISA) on your side from Day 1.
We have a client who was injured in an auto accident that left him with traumatic brain injury and a host of problems associated with that. He had a disability insurance policy with his employer, and the policy paid benefits for many years. One day, out of the blue, he got a letter from the insurance company (let’s call them Aetna) saying that his benefits were denied because his medical records showed he was disabled due to Chronic Pain Syndrome, and his policy limits coverage for Chronic Pain Syndrome to two years – which had long since passed. We appealed, submitting letters from his doctors and medical records showing that Chronic Pain Syndrome was just ONE of the effects that lingered after the car accident – and his true disabling condition was Traumatic Brain Injury (which had no coverage limitations). The insurance company denied the appeal, but not because they disagreed about the Traumatic Brain Injury diagnosis. They denied the appeal because they said they reviewed the records again and found that actually, he was not disabled at all!
This is an insurance company that simply got tired of paying the claim. Of course, that’s not allowed, but it happens all the time. We have filed a lawsuit, and we are confident we will win (judges do NOT like to see this kind of monkey business from insurance companies).
For a deeper dive, here’s the case law supporting the “no new reason for the denial” rule:
When an insurer changes the basis for its denial during the appeal process - whether during the administrative review or judicial review - that opportunity is lost. See Thompson v. Life Ins. Co. of N. America, 30 Fed. Appx. 160, 163 64, 2002 U.S. App. LEXIS 3390 (4th Cir. 2002) (unpublished) (remanding to the district court where insurance company changed the reason for its denial of benefits during judicial appeal because allowing insurer "to raise a new basis for denial would deprive (the claimant] of the procedural fairness guaranteed to claimants under ERISA"). Also Glista v. Unum Life Ins. Co. of America, 378 F.3d 113, 130 (1st Cir. 2004) (remanding to the district court with instructions that the insurer be held to the reason articulated during its internal claims review process since the insurer "violated ERISA and its regulations by relying on a reason in court that had not been articulated to the claimant during its internal review").
What Law Gives You the Right to Sue Your Disability Benefit Plan?
Insurance companies don't make money if every insured knows their rights. Many insurance companies will deny benefits automatically, hoping that you won't question their decision. So many times, we have spoken to clients who are unsure if they can even appeal the decision. They are confused, because their disability is clear, and the doctor agrees they are unable to work.
The plaintiff, as the beneficiary of a plan, is entitled to bring a civil action to recover disability benefits if those benefits are due to him under the terms of the plan. 29 U.S.C. § 1132(a)(1)(B). This means that you are allowed to file a lawsuit if you have been denied benefits, but are entitled to them based on your plan and condition. This is important for you to understand. Whatever your insurance company says, even if they have denied you benefits and say you are fit to work, you need to explore your options with an experienced long-term disability attorney.
Not many attorneys work on long-term disability cases. Often, people confuse this practice area with social security disability. ERISA long-term disability applies to employer-provided or personally purchased long-term disability plans. The insurance companies are private companies, and they are motivated by their company's profit. Their goal is to pay out as few benefits as possible. If you don't hire an attorney, you may lose out on benefits that you are entitled to.
Many long-term disability plans and policies have a limit on the number of appeals you can file against them. Be sure not to waste your appeals. If your insurance company is fighting you, contact BenGlassLaw at (703) 584-7277.