CCBA Feature By Jamie Hall, Esq. Law Office of Jamie R. Hall
Long Term Disability Claims
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t some point every attorney receives a client inquiry regarding a long term disability claim, regardless of whether the attorney offers representation in this field. These claims often occur in concert with other legal issues, including personal injury, bankruptcy, and divorce. What follows is a primer, basic information for reference when receiving an initial client call regarding his or her long term disability claim.
What is a long term disability claim? A long term disability (LTD) claim is a private claim for wage replacement benefits as a result of a disabling condition. LTD coverage is obtained through an insurance company, and is normally offered by one’s employer. These claims are separate and distinct from Social Security disability claims, with different requirements, benefits, and processes. LTD claims are governed by the relevant insurance policy, as well as by federal law under ERISA. ERISA is the Employee Retirement Income Security Act, which sets forth the rules of the game in these claims, largely to the benefit of the insurer and to the detriment of the individual claimant. A small number of LTD claims travel outside of ERISA.
How is disability defined? Although policies can vary, insurers usually consider whether claimants can perform their pre-disability work on a full time basis. This includes both the physical capacity to perform (including the requisite standing, handling, lifting and carrying), and the cognitive or behavioral capacity to perform (including to maintain 8 | New Matter
focus and attention through the course of an eight-hour workday). In many policies, the definition of disability changes after approximately 24 months, shifting from considering claimants’ own occupations to considering any occupation. After this shift, insurers will consider whether claimants can do any work that pays approximately 80 percent or more of their pre-disability income. Many claims are challenged by the insurer at this transition point, especially where the claimant’s past work was in a lower paying position with less income protection, or where the past work was unusually physical (such as many nursing positions).
What is the decision-making process? Generally, there are up to three stages to the decisionmaking process. An initial application is made to the insurer. If this is denied, the claimant is provided one or two in-house appeals, also decided by the insurer. Only once these in-house appeals are denied and exhausted can the claimant proceed to federal court. Perhaps the most important limitation to these claims under ERISA is that, with very limited exceptions, the federal court’s review is restricted to the record as it existed at the time of the insurer’s final decision. Although a claimant may supplement their record at will during the initial applications and in-house appeals, the record essentially closes when the final appeal to the insurer is denied. Claimants often assume that they do not need counsel until they have exhausted their in-house appeals.
