It’s common knowledge to get an attorney to represent you in court. While the law allows self-representation, regardless of law education or experience, attorneys have a deeper understanding of the intricacies of litigation. They’re also less likely to let emotions get the best of them during a court session, which can ruin a case.
Legal representation becomes more important in more complex fields, one of which is disability insurance law. Short- and long-term disability insurance provides a payout to the policyholder in the event of a disability. However, as most disabilities aren’t apparent (particularly mental health conditions), proving one’s claim can be tricky—even with an attorney’s help.
Still, if you believe your case for claiming disability benefits stands on firm, reasonable grounds, getting an attorney is crucial. Here’s an in-depth look into the importance of legal representation in settling disability insurance claims.
Introduction to disability insurance
Disability insurance provides individuals with income if they suffer a disability that prevents them from fulfilling their current job’s obligations. A disability insurance plan provides a payout, typically a portion of the person’s pre-disability salary, for a specific period.
- Short-term
A short-term disability insurance policy provides income to the policyholder for as long as their temporary disability prevents them from working. The payout period usually lasts for three to six months (some up to two years), with an elimination or waiting period of two weeks from the day the policyholder suffered an injury or illness that led to their disability.
- Long-term
A long-term disability insurance policy provides income to the policyholder for years to the duration of their life. The payout, typically 50% to 70% of the policyholder’s income before suffering from disability, follows the elimination period of three to six months from the day of their debilitating illness or injury.
Disability insurance differs from workers’ compensation and personal injury protection in that it covers a wider range of injuries and illnesses, including those that are not work-related or caused by the negligence of another party.
It also differs from Social Security disability insurance, a government-funded program regulated under the Social Security Act. On the other hand, the Employee Retirement Income Security Act (ERISA) governs private plans sponsored by employers or employee organizations. Meanwhile, self-purchased individual plans are regulated under state insurance laws.
The latter difference matters because of the evidence of disability required under each plan. Any government-sponsored disability insurance program requires proof that the person can no longer do any meaningful work (i.e., any occupation). On the other hand, private disability insurance only needs evidence that the person can’t perform the same line of work they’ve done prior to their disability (i.e., their own occupation).
Proving disability
Denied claims aren’t uncommon in disability insurance. One major hurdle in approving claims is proving the claimant’s disability, especially when it’s not immediately evident. Take the example of visible injuries like a broken arm; they’re easily perceivable. However, when it comes to conditions like major depressive disorder that lack visible markers, claimants face an uphill battle to meet required evidence, further complicating the process of getting the necessary support.
Naturally, the most convincing tangible evidence a claimant can get is a professional evaluation from their doctor. It’s also advisable to support this statement with medical test results and other documentation from the attending healthcare facility. The insurance firm may also ask the claimant to authorize them (via a HIPAA-compliant authorization form) to collect further documentation.
Unfortunately, even with plenty of supporting documents, a claim can still be turned down for other reasons. This will prompt the claimant to file an appeal within six months from the date the claim was disapproved. At this point in filing disability claims, it pays to have an attorney helping out. For starters, the appeals process is more convoluted than one might think. One misstep (e.g., not submitting the right requirements or lacking some documents) can ruin any attempt at overturning the decision.
If the appeal fails, depending on the terms of the plan, the claimant can resort to other steps, like a second level of appeal. Once they’ve exhausted all administrative remedies available under the plan, they can file a lawsuit on the grounds of ERISA violations.
ERISA or non-ERISA
ERISA contains safe harbor clauses that exclude group disability insurance plans provided that they meet the following conditions:
- The employer or employee organization doesn’t make contributions.
- The employee or member can elect not to participate in the program.
- The employer or employee organization’s role is limited to collecting and remitting plan premiums on the insurance firm’s behalf.
- The employer or employee organization doesn’t profit from the arrangement (excluding profit from services related to payroll deductions and dues checkoffs).
Note that meeting all four criteria is required for a plan to be excluded from ERISA regulation. Plenty of examples of this exist, such as certain voluntary individual disability plans, plans for government employees and church workers, and payroll practices.
There are situations where it’s beneficial for plans or policies not to be governed by ERISA due to the associated administrative burdens and potential liabilities. To start with, the act is designed to protect participants in employer-sponsored plans by establishing standards for reporting, disclosure, fiduciary responsibility, and the right to sue for benefits.
More importantly, the act mitigates the risk of an underfunded benefits policy. This happened to the then automotive giant Studebaker after it shuttered its plant in Indiana in 1963. Their workers later realized that the company defaulted on its pension obligations, leaving them bereft of their main source of income after the shutdown.
However, even without ERISA oversight, valid claims can still be justified through common and state laws. The most common course of action is through a lawsuit against the insurance firm for breach of contract, governed under common contract law.
Whether within ERISA or common and state law jurisdiction, navigating these laws still requires an attorney’s expertise and experience. It’s easy to get lost in the sea of legalese these laws have, let alone get the formal charges wrong.
Conclusion
Disability insurance is one of the most important types of coverage to have right now. No one deserves to lose their ability to work, but disability chooses its date and time to strike. And in some cases, it’s when one least expects it to.
When that happens, the last thing anyone wants to experience is a drawn-out struggle to validate their disability claims. When faced with denial from the insurance provider, don’t hesitate to get the best attorney to represent your interests.
With a lawyer on your side, you can seek guidance and support throughout the entire process—they can expertly gather evidence and medical documentation, decipher the nuances of policy fine print, and use their experience with insurance companies to offer strategic advice. In a word, an attorney can help boost your chances of approval and get the benefits you need.
