We often discuss issues with ERISA-governed disability insurance. Certain issues tend to crop up regularly when these issues lead to litigation. Here are the top five.
1: The company ignores your doctors.
Typically the first step in making a disability insurance claim is having the doctor complete a form identifying your diagnosis, the resulting symptoms, and their impact on your ability to work. This makes sense. After all, when a person can’t work because they’re sick or injured, the doctor treating them usually has all the firsthand medical knowledge.
So, ERISA requires that the insurance company consider the claimant’s treating doctor’s opinions. Of course, the insurance company doesn’t have to pay benefits just because your doctor says you can’t work. Sometimes the doctor doesn’t understand the person’s job duties or the insurance policy terms have other requirements besides medical evidence that aren’t met. But the company can’t just ignore your doctor.
So if the company can’t seem to engage with your doctor’s opinions, it’s a good sign something is wrong. Sometimes it’s obvious: the insurer just doesn’t address your doctor’s conclusions. Other times, it’s more circumspect: the insurer pays its own doctor to perform a medical review that summarizes your doctor’s opinions and then makes the one-sentence conclusion that the insurer’s doctor disagrees, without providing any explanation.
Regardless of how it’s done, an insurer that disregards your doctor without engaging with their opinions in detail probably isn’t doing the right thing.
2: The company ignores your job duties.
The details of a person’s job can be just as important to a disability claim as the medical evidence. Many disability insurance polices pay benefits if you can’t perform your “own occupation,” as opposed to being totally disabled from any work. That’s important protection that costs extra. Many skilled professionals have demanding jobs that a person could be disabled from performing without being totally unable to work. This makes the claimant’s job duties a very important part of a robust investigation in a disability insurance claim.
So if the company doesn’t engage with your job duties when the claim is under an “own occupation” insurance policy, that’s a big problem. This often happens in claims involving skilled professionals. A software engineer, for example, has demanding mental and organizational duties. If she develops an autoimmune disorder that leaves her too exhausted and in too much pain to perform her duties and makes a disability insurance claim and the insurance company only evaluates the physical demands of her job–i.e., the ability to sit at a desk and use a computer–the company misses the big picture.
This also crops up in cases involving medical conditions that impose intermittent symptoms. Often, a person becomes disabled due to a disease that manifests symptoms occasionally and unpredictably. For example, a person with heart disease might feel fine Monday thru Thursday and then have crippling pain and shortness of breath that keeps them from doing much of anything on Friday. If that person can’t reliably commit to attending their job full-time, they’re likely disabled within the meaning of most insurance policies, which provide a person is disabled if they can’t perform their job duties with “reasonable continuity.” After all, most jobs require you to be able to do your job full time and on a regular schedule.
If the company ignores that reliable attendance is among the person’s job duties, it can lead to a wrongful denial of coverage. The company might conclude that a person can still perform their job duties when they’re asymptomatic without addressing the fact that they can’t commit to regular attendance because they can’t predict when their symptoms will flare up. No boss wants an employee who can’t show up for work reliably.
3: The company declines to investigate.
ERISA requires the insurance company to reasonably investigate benefit claims for a good reason: turning a blind eye to the facts is an easy way to deny valid claims. Often, the company will deny a claim for lack of evidence–but they won’t make any effort to obtain it. For example, the company might say “we can’t pay your claim without additional medical records.” If they don’t make an effort to obtain the information they say is missing, it’s probably a sign that the company is more interested in finding excuses not to pay the claim than it is in performing a legitimate investigation.
4: The company cherry-picks irrelevant evidence.
Since disability claims depend on the intersection of work capacity and symptoms from illness or injury, a person could reasonably expect their disability insurer to focus on evidence relevant to how their symptoms impact their ability to work. Unfortunately, that isn’t always the case.
Often, the company will cherry-pick facts that aren’t relevant to how your symptoms impact your job. It’s distressingly common to read a letter denying a disability insurance claim that ignores the medical evidence of disability and instead recites facts that have nothing to do with that evidence.
Sometimes this happens with the analysis of medical records. A person might visit their doctor to discuss a new diagnosis of an autoimmune condition that leads them to make a disability insurance claim. That visit might include discussion about the test results leading to the diagnosis, the likely prognosis, the symptoms that the person can expect, and possible treatment. If the insurance company ignores all that and instead quotes only the sentence of the doctor’s note that reflects the patient was in no acute distress during the visit, that’s a bad sign. It shows the company is looking only for evidence that could permit it to deny the claim.
Other times, it might happen with ancillary facts about a person’s activities. Let’s say a person’s autoimmune condition keeps them at home most days due to exhaustion and pain. They might report to their disability insurer that they barely leave the house, rely on friends and family for grocery shopping, can no longer play sports, and limit their physical activity to a walk around the block once a day. A denial letter from the insurance company ignoring this and reciting that the person must be healthy because they can walk is a sure sign that the company isn’t doing the right thing.
5: The company doesn’t communicate what it wants.
ERISA requires the insurance company to have a meaningful conversation with claimants about the insurance claim. If the company thinks that something more than what’s been submitted is necessary in order to pay benefits, it must say so.
So when the company denies coverage and won’t say what’s missing, that’s a red flag. Too often, coverage is denied in a letter that summarizes the person’s treatment and then arbitrarily concludes there is insufficient evidence of disability. If the company doesn’t specify what evidence it says is missing, that’s a bad sign.
For example, a knowledge worker with severe mental health diagnoses might become unable to work due to cognitive impairment and make a disability insurance claim. The company might deny the claim because there is insufficient evidence of cognitive impairments. A company trying to do the right thing will tell you what additional evidence is needed. They might request results from specific testing. Or, they might request information from your employer about your performance.
What an insurance company acting in good faith probably won’t do is dismiss the claim with a one-sentence conclusion of “insufficient evidence” without telling you what additional evidence they need. If that happens, it’s a red flag.
Seattle Insurance and ERISA Blog 