Disability Insurers and the Claim Process
By FindLaw Staff | Legally reviewed by Garrett Monteagudo, Esq. | Last reviewed January 20, 2023
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Disability insurance can provide benefits and protection to workers, but obtaining those benefits after a worker becomes disabled can be a long and complicated process. Some factors affecting the ease of obtaining benefits include the worker's type of disability insurance policy, the policy or plan's terms, and whether the insurance comes from an employer or is an individual disability insurance policy.
Starting the Process: Filing a Claim
When workers become disabled due to an illness or injury that prevents them from doing their jobs, the first step toward receiving benefits under a disability insurance plan is to file a claim with the disability insurer. Filing a claim typically requires policy holders to fill out a form describing their injuries and job responsibilities, as well as their salary and other financial information. Additionally, the policy holder's doctor must submit a statement detailing the worker's injury, describing a treatment plan, and verifying that the worker is not able to return to work with the current injury. Once the claim is submitted, the insurance company may approve the claim and begin disbursing benefits. The insurance company could also deny the claim.
Denial of a Disability Insurance Claim
Although disability insurance is intended to help disabled workers in their time of need, disability insurers may deny a claim for a number of reasons. Many policies exclude certain types of illnesses or injuries as the basis for a disability claim. Additionally, some policies have time limits for filing claims. Those who miss the deadline may be out of luck. Finally, a disability insurer may deny a claim if it doubts the conclusions of the policy holder's doctor.
So what happens if a claim is denied? The answer depends on the type of disability insurance at issue and the terms of the policy. If a worker obtained their disability insurance through an employee benefits package, then federal law requires the worker to follow a strict administrative process for appealing a denial before filing a lawsuit to demand benefits.
On the other hand, workers who bought their own private disability insurance through an insurance broker are subject to the terms of their policy. This may allow policy holders to immediately file a lawsuit demanding their benefits. It may also require them to go through an administrative appeal process first.
The Administrative Appeal Process
Whether a worker is required by federal law to follow an administrative appeal process or go through a disability insurance policy's terms, workers usually can appeal before resorting to litigation. Appeals processes often require individuals to follow very specific guidelines and strict deadlines. Failing to do so can cause an appeal to be denied and perhaps even prevent policy holders from filing a lawsuit later on. Following the appeals process correctly is often the only way for policy holders to retain their right to file suit.
The claims and appeals process can sometimes make or break a policy holder's later case in court. If a policy holder does end up bringing their case before a judge, the judge may be required to decide the case solely based on the information in the policy holder's file. The appeal may be the only chance that policy holders have to challenge a denial using letters or reports from employers, doctors, psychologists, or other experts.
Policy holders should be especially careful at this point in the process and be aware of all deadlines and requirements for preparing and filing their appeal. Missing a deadline or not following the proper procedures can result in an automatic denial. It could also result in a worse scenario, such as the loss of the right to file a lawsuit.
After a Failed Appeal: Filing a Lawsuit
As with the appeal process, the type of lawsuit that policy holders can file following a failed appeal may be different depending on whether the policy holder has employer-provided disability insurance or their own insurance policy. With private insurance, a policy holder usually can file a standard lawsuit with a trial where they can present evidence and call witnesses. Lawsuits regarding employer-provided disability insurance, on the other hand, are controlled by federal law.
In either case, a judge may give the most weight to the information within the policy holder's file, which will contain all of the documents and paperwork relating to the policy holder's claim and appeal. This is why providing a lot of supporting information during the administrative appeal process is so important. If the policy holder does not obtain letters from doctors or other experts, a judge's hands may be tied as far as what information they can consider in deciding a case.
After a Lawsuit: Long-Term Claims
Even if a policy holder is successful in winning disability insurance benefits following an appeal or after a lawsuit, policy holders must carefully monitor the terms of their policies to ensure they stay covered for long-term disabilities. After two years of continuous disability, many policy holders are often denied further benefits due to changes in their policies.
When workers initially file a disability insurance claim, they must show that they cannot perform their specific job. However, after two years, many insurance policies change this requirement to force policy holders to show that they cannot do any job. As you can imagine, this can be difficult to establish. If there isn't adequate support in the policy holder's file to show that they cannot work any job, the disability insurer may send another denial letter. Sadly, should this happen the policy holder may face the unwelcome prospect of another appeal and lawsuit.
Get Professional Legal Help with Your Disability Claim
It's probably fair to say that claiming disability insurance benefits can sometimes be a long and difficult process. If you're considering filing a claim with a disability insurer you may want to contact a disability lawyer to discuss your legal options and preserve your rights, or speak with an ERISA lawyer if you need help with an employer-sponsored disability benefit claim.
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