When you sign up for LTD insurance or purchase private LTD insurance on your own, you are embarking on a legal and contractual relationship. Unfortunately, the policies are complex, even by legal document standards, and are next to impossible for the layperson to easily understand. To make matters worse, policies that are part of an employee benefits package are typically governed by ERISA, the law created to protect employees from unscrupulous employers that has been twisted into a defense wall by insurance company lawyers.
Do you have any rights when it comes to disability insurance policies?
In a word, yes. But there are some real limitations that you need to know about.
For Long Term Disability Insurance policies that are from your employer, you do not have the opportunity to immediately take your case to court or ever be heard before a jury of your peers. Instead, you are compelled to undertake an administrative appeals process – essentially asking the insurer who denied or terminated your claim to alter their position. In litigation of these types of claims, as a general proposition, the only materials that may be submitted to the Court are those that are in your insurance company file, known as the administrative record. So if your primary physician fails to submit an up to date report that has critical information about your condition, you may be precluded from having the Court understand or consider your most recent medical concerns.
Unlike nearly any other dispute in any other area of the law, there are no ‘damages’ available to pursue in a disability insurance claim. There is no penalty to the insurance company for the weeks, months, even years of anguish that you are put through by their denial or wrongful termination of your claim. If you have suffered irreparable financial harm from the denial that is later reversed, including having to file bankruptcy or losing your home, there is no claim in a disability insurance case that will receive anything from the disability insurance company except the benefits that were supposed to be paid to you.
However, hope may become available, as the United States Supreme Court recently issued a decision that may lay the groundwork to pursue these types of claims, under a “surcharge” theory.
Expert witnesses are not typically part of the disability insurance litigation process. In fact, most often, there are no witnesses at all. Your boss who knows how hard you worked when you were well can’t testify on your behalf about the awful changes that have happened to you as a result of your disease or injury. Community members who would defend your character and work ethic are not allowed to speak on your behalf. It has to be in the administrative record.
Thus, in developing an appeal to a denied or terminated claim, it is imperative to include these types of materials, to buttress your credibility and have the record reflect the issues that you will seek to argue to a Court.
We’ll examine the bill of rights for privately owned disability insurance policy owners in our next post.