One of the most disorienting experiences of having a serious medical condition is receiving a letter from your insurance company stating that your Long Term Disability benefits are terminated. One day the payments will come as scheduled. Then they suddenly come to a halt. Instead, you get a letter which is packed with medical jargon and says you’re fine to go back to work, or that you no longer qualify for disability by your policy’s definition of the word.
For the majority, that letter brings about instant panic. They’ve lost the income they rely on. The bills, unfortunately, do not stop. And the journey ahead feels uncertain.
On the brighter side, when Long Term Disability benefits are terminated, don’t consider it as a final decision. It’s the start of the process that, if done properly, could lead to total reinstatement. But, as with all processes, there are rules, time limits and serious consequences of getting things wrong, and so it’s important to understand what’s happened as well as what to do next.
Why Insurance Companies Terminate Long Term Disability Benefits?
To challenge an ineffective termination, you must first know the reasons behind why it occurred. Insurers are not impartial parties in your health care. They have an incentive to strip away or get rid of the claims on their books, and they have a variety of systematic tactics to develop a valid argument for their dismissal.
Changes in the Definition of Disability Within Your Policy
The majority of Long Term Disability policies have a clause that alters the definition of disability after a certain time, typically 24 months. In the first stage of work, benefits are paid in the event that the duties of your own occupation are impacted and you are unable to work. Then it changes: You are required to no longer be able to do any job for which you are reasonably qualified, based on your education, training or experience.
The abandonment of an own occupation standard to any occupation standard is one of the most common grounds for dismissal. A claimant who genuinely cannot return to their previous career may still be deemed capable of some form of sedentary or less demanding work, and that finding becomes the insurer’s justification for cutting payments.
Independent Medical Examinations and Claimant Surveillance
Insurance companies regularly conduct a doctor exam conducted by a professional hired by the insurance company, known as an IME. Typically, these assessments are not conducted independently. Doctors performing them are chosen and paid for by the insurance carrier and their evaluations often downplay or flatly disagree with those of the claimant’s regular doctors.
Insurers regularly carry out physical surveillance in addition to IMEs. Video of a claimant performing a simple task such as carrying groceries to a car or attending a family event may be viewed as proof of the person’s functional ability, despite the fact that it is a rare moment.
Failure to Document Medical History or Information.
Insurers will want a medical record from beginning to end. If the gaps in care occur — between doctor visits, not going to the doctor’s office, or not providing records up-to-date — the insurance company may assume that the condition has improved. Many terminations involve a claimant’s underlying condition remaining unchanged. Paper trails just didn’t convey it effectively.
What that Termination Letter Truly Means
Many people might think that they have heard the last word when they receive a letter of termination. That’s not the case. The letter is a determination and determinations are subject to appeal.
The letter does start a clock, though. If a claimant is terminated from a Long Term Disability plan, the plan is legally obligated to allow the claimant to appeal the decision, especially if the plan is sponsored by an employer and falls under the Employee Retirement Income Security Act — or ERISA. That appeal is filed within 180 days of the date of the determination, or as otherwise provided in the letter, in most instances. Not making the deadline doesn’t put it on hold. It may permanently strip you of your right to appeal the decision to Federal court.
The ERISA Appeal and Why It Is the Most Crucial Step
“The administrative appeal is a steppingstone to a lawsuit for many claimants.” That’s the wrong way to think about it.
The administrative appeal record is the cornerstone of the entire appeal process. While the appeal stage, evidence, medical reports, physician statements, and vocational evaluations are not admissible later in federal litigation under ERISA. The appeal itself is all that you build, and all that you don’t.
A good appeal achieves more than one purpose. It responds specifically to the reason the insurance company gave for the termination in the termination letter. It brings to light the latest health records from any treating physicians that challenge the insurance company’s findings. It reacts to any IME findings or surveillance footage which was used against the claimant. A comprehensive vocational evaluation may be used to rebut the insurer’s finding of the claimant’s ability to do some other work wherever the insurer concludes a vocational evaluation could be conducted.
When Your Benefits Are Terminated, Here’s What You Should Do Immediately:
The first few days after receiving a Letter of Termination for the LTD benefit are the most critical after the action of terminating your LTD benefit, and it can determine the entire course of your claim.
Ask the insurance company for a copy of your complete claim file. ERISA requires you to receive it and it will include every document, physician note, surveillance report, and IME report that the insurance company used to make their decision. Make sure to read through your policy and know which definition of disability is now applicable to your claim.
Avoid calling the insurance company and trying to work things out informally. Avoid sending and verbalizing emotional correspondence or arrangements for what to do next. Any information passed on to the insurance company is part of the record. Every conversation matters.
Why Carrying This Out Alone Poses an Unnecessary Risk
At first blush the appeal process appears manageable. In practice, it works in almost every structural way against the claimant. The insurance company has built up years of experience in the process, a sophisticated legal team and an in-house medical review team familiar with the company’s policies. A claimant without legal advice is lacking those tools in that environment.
A Long Term Disability attorney with experience in this practice will know the ins and outs of ERISA. They understand how to read a claim file, understand what parts of an insurer’s reasoning are weaker than others, and know how to gather medical and vocational evidence and build an appeal to lay the strongest ground, either for reinstatement or if needed, for federal litigation.
Many disability lawyers deal with these on a contingency basis, and it is not necessary to pay anything up front. There are no fees associated with cases unless they’re successful. That process makes it easier for someone who just lost their income to receive qualified assistance at the time it’s needed.
Benefits Are Available To Be Reinstated
Termination isn’t the end of the world. If the claimant does respond within the timeframe, if the claim is adequately supported in the administrative appeal and the insurer is challenged in a reasonable manner using medical and vocational evidence the benefits are reinstated and the period of time since the benefits were terminated is also covered.
Those who attain this result are almost always the ones who acted swiftly, treated the appeal like the legal process it is and did not try to do it on their own.
Frequently Asked Questions
Does an insurance company have the right to cancel Long Term Disability claims without notice?
In most cases, yes. There is no requirement for insurers to give notice prior to termination. This decision will usually be delivered as a formal letter and the letter will be the notification and the beginning of your appeal clock. It’s important to read carefully and submit within the time frame; no extension after the period is over.
How long do I have to appeal a Long Term Disability termination?
ERISA allows for an administrative appeal within 180 days of the termination notice. Other policies have a shorter timeframe. The date cannot be changed. The general rule is that the claimant loses the right to challenge the decision in Federal court if it does not make an appeal in time, resulting in no additional legal avenues to appeal.
What are the differences between any occupation coverage and your own occupation coverage?
Qualifies to receive benefits when you are unable to do the duties of your previous job: “Own occupation”. If you are engaged in an occupation, then you must be unable to carry out almost all work that suits your background and qualification. The most common cause for termination is when most Long Term Disability plans convert from own occupation to any occupation after 24 months on disability benefits.
May I collect both LTD and SSD at the same time?
Many times yes, though in a particular manner. Typically, the LTD policy has an offset provision, which means that Social Security Disability benefits will be taken off of the Long Term Disability benefits. Even though doing both is not always wise, it might be worthwhile to pursue both at the same time, and an approved Social Security Disability claim may help the case that your Long Term Disability termination was unfair.
If I have been terminated from my Long Term Disability plan, should I hire a lawyer to represent me on an appeal?
Considering the issues involved in the administrative record and the intricacies of ERISA litigation, it is prudent to have legal representation at the appeal stage. Once the appeal record has been created, any errors or omissions made during the appeal stage cannot be changed in the future in relation to the appeal. Many Long Term Disability attorneys work on a contingency basis, meaning that they don’t require any upfront money.