As with most insurance cases, disputes over disability insurance coverage or benefits frequently turn on the specific insurance policy language at issue. Insurance policy fine print can often be read in ways that are counterintuitive. Below are four common policy provisions that are often key to the outcome of disability insurance disputes.
1. The Definition of “Disabled”
Disability insurance policies can define “disabled” in different ways. Some policies define disability in terms of the insured’s employment qualifications. Such a policy might provide: “you are unable to perform the duties of any gainful occupation for which you are reasonably fitted by education, training or experience.” Other policies define disability in terms of the insured’s existing occupation, defining disability as: “you are unable to perform the material and substantial duties of your regular occupation, or you have a 20% or more loss in your monthly earnings.” Further, some insurance policies change the definition of disability once the insured has been disabled for a certain time period, typically tightening the standard.
For insureds, the definition of disability is the key to claiming benefits. Many disability insurance disputes focus on whether the insured meets the definition of disability. That’s key because insurers sometimes deny claims under the wrong standard of disability. Denying claims under an erroneous standard could result in denying benefits where the insured is otherwise entitled to them.
The definition of disability also establishes the specific medical evidence needed to establish the insured is disabled. That’s key because doctors typically do not write medical records with the insurer’s definition of disability in mind; they focus on the medical information relevant to the patient’s diagnosis treatment. Accordingly, insurers often claim the insured’s medical records don’t prove the insured is disabled because the doctor’s notes don’t precisely match up with the definition in the policy.
2. Mental Health Limits
Many disability policies contain special provisions restricting coverage where the insured’s disability relates to their mental health. Although the federal Mental Health Parity Act generally prohibits health insurers from disfavoring mental health coverage, disability insurers are still often free to do so.
An example of a common mental health limitation in a disability policy: “Disabilities which are due in whole or part to mental illness have a limited pay period during your lifetime. The limited pay period for mental illness is 24 months during your lifetime.”
Mental health limitations can be critical to disability insurance disputes. The insured may have both physical and mental health symptoms. Sometimes, the physical ailments cause the mental health symptoms directly, for example, in the case of a traumatic brain injury which manifests with difficulty concentrating or focusing. Or, the mental health symptoms may be ancillary to the physical injury; for instance, people suffering a physical disability often seek mental health treatment after becoming depressed and anxious about their inability to work, engage in hobbies or socialize because of their physical disability. Sometimes the mental and physical symptoms may be completely unrelated, for instance, when a person who has been treated for anxiety for many years sustains a physical disability following an injury.
In these circumstances, insurers often conflate the physical and mental health symptoms to justify limiting benefits under the mental health limitation. Insurers may ignore the physical ailments that prevent the insured from working and focus on ancillary mental health symptoms that were well-managed prior to the onset of physical symptoms. Or, the insurer may incorrectly determine that any physical limitations are caused solely by mental health conditions, for instance, by characterizing migraine headaches as a symptom of anxiety.
To avoid this, it’s critical to present the insurer with medical records and statements from treating providers that clearly differentiate mental health conditions from physical ailments, and indicate whether the physical ailments alone render the insured disabled.
3. “Objective” Evidence Requirements
Similar to mental health, many disability insurance policies limit coverage for so-called “self-reported symptoms,” defined as symptoms that cannot be proven through “objective” testing.
Many disabling conditions are, by their nature, not readily provable through “objective” testing. Chronic migraines, fibromyalgia, or Chronic Fatigue Syndrome are common examples. These conditions sometimes result in disabling symptoms, but are difficult to objectively measured through things like MRIs or X-Rays. Consequently, many insureds have coverage denied for conditions that render them disabled but cannot be identified on objective tests.
Overcoming “objective” evidence requirements often entails establishing that the condition is one that is known in the medical community to resist proof by objective means. Many courts have recognized the medical consensus that conditions like fibromyalgia do not show up on MRIs, and, consequently, do not allow insurers to deny such conditions for lack of “objective” testing that, by definition, cannot exist.
Disability policies issued through an employer are typically subject to a federal law called the Employee Retirement Income Security Act (“ERISA”). If ERISA applies, it imposes important deadlines and procedural rules insureds must follow in order to contest a disability insurance denial. For instance, insureds must appeal a denied claim within specific time periods (usually measured in days). Moreover, the appeal must include all information the insured relies on in claiming benefits; information absent from the appeal often cannot be considered in a lawsuit disputing the denial.