Short-Term & Long-Term Disability
Purchasing short-term and long-term disability insurance policies is a smart decision that protects employees from wage loss in the event of a medical condition that impedes their ability to work. These policies are sometimes offered by employers but can also be purchased privately.
Short-term and long-term disability insurance policies are either paid via a payroll deduction or directly by premium payments and allow the policyholder to continue receiving a portion of their salary while they are disabled.
Employer or Private Insurance
Employer-provided policies may be governed by the federal Employee Retirement Income Security Act (ERISA), which has strict and complex rules for how and when to file a claim or appeal the denial of one. Privately purchased policies are not subject to ERISA; they are administered in accordance with the contractual terms of the policy.
Like Social Security Disability claims, the applicant must prove they are medically unable to perform their job, but the standard for doing so is typically easier to meet for short-term and long-term disability insurance. The claimant need only prove they cannot perform their regular occupation and age is not a factor. The Social Security Administration, by contrast, holds younger applicants to a stricter standard than older individuals.
Policies differ, but most require a six-month waiting period before long-term disability payments commence, and most provide payments until the claimant reaches the age of 65.
However, at any point until that time, the insurance company is permitted to request a review of the claim to evaluate whether the disability has changed or lessened in severity. If their medical experts determine that is the case, they will immediately deny the claim and discontinue payments — unless the claimant successfully sues to overturn that determination.
The definition of “disabled” will be established in the insurance policy, but generally policies define it as being unable to perform a regular occupation.
Claims administrators may be employed by the insurance company and many deny first time claims even if they are justified. Reasons given for denying a claim include (but are not limited to):
- Insufficient medical evidence (such as a lack of regular medical treatment, adequate records, or a doctor’s statement)
- Failure to meet the policy’s definition of disability
- Video surveillance by the insurance company that conflicts with the claim
- Missed application deadlines
Policyholders have a right to appeal a denied claim and any determination that was made in that denial. There are strict deadlines to file appeals, however. Under ERISA and many private policies, the appeal must typically be filed within 180 days.
If the appeal is also denied, the policyholder can file a lawsuit in federal court. There is no right to a jury trial in these cases; a federal judge will review the basis for the insurance company’s decision as well as medical expert opinions and information presented by the policyholder rebutting it. The judge will decide whether there was a rational basis for denying the claim or not.
The initial claim process for short-term and long-term disability insurance, any appeals, and federal lawsuits are delicate, complex, and challenging undertakings, particularly for an individual already suffering from a medical setback. Insurance companies are well resourced organizations that vigorously defend their economic interests.
Policyholders need equally capable legal support in the face of such obstacles. Pond Lehocky helps short-term and long-term disability claimants build their case by obtaining all the necessary medical information and expert opinions.
Furthermore, professional legal guidance can help policyholders if their benefits are wrongly terminated, their claim is delayed without cause, or if they received a settlement that is not commensurate with the level of disability or unfairly low.
Most short-term and long-term disability insurance policies stipulate that the insurance company is entitled to offset payments to successful claimants if the individual is receiving income from certain other sources, including:
- Social Security disability benefits for the policyholder and their dependents
- Workers’ compensation benefits
- Unemployment compensation benefits
- Certain pensions and/or 401K distributions
Pond Lehocky Giordano only takes short-term and long-term disability cases on a contingency basis. That means disability insurance policyholders only pay legal fees if benefits are successfully obtained or a settlement is made. There are no upfront costs or fees, and Pond Lehocky pays for all medical information, expert fees, and court costs.