must-knows about disability...

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MUST-KNOWS ABOUT DISABILITY INSURANCEA Guide to Short and Long-Term Disability Insurance

Disability insurance is used by workers as an income

replacement when they are unable to work due to injury

or illness. An injury or illness can be sustained on the job

(such as a workplace accident) or it can be unrelated to a

job’s activities (such as a cancer diagnosis). It is important

to note that disability insurance only replaces some of the

lost income, not all.

Short-term is usually anything under 24 months, while

long term is anything over 24 months. Depending on the

insurance, a worker can either buy a plan for short-term or

long-term insurance. Sometimes a plan may pay benefi ts

Disability insurance is not just for those who have high-risk,

physical jobs like construction. Anyone can sustain an

injury on the job (yes, even desk jobs) or can become ill.

Statistics show that 1 in 4 workers will become disabled

before reaching retirement age (according to Social

Security Administration).

WHAT IS DISABILITY INSURANCE?

SHORT TERM VS LONG TERM.

WHEN DO I NEED IT?

Q.

Q.Q.

for 24 months and then the worker must prove that their

disability is unchanged to qualify for long-term disability.

Sometimes a worker’s employer may off er short-term

disability (like sick days), which should be factored in when

a worker is deciding on what kind of coverage to buy, so

that these benefi ts do not overlap.

More than just lawyers


Different plans offer different reimbursement amounts.

A typical plan will reimburse about 60 percent of your

pre-disability income. To decide what kind of plan to buy,

a person should calculate the minimum amount of income

they would need to get by, such as the money needed to

cover basic living expenses (housing, food, car and other

living expenses). From that baseline, a worker may decide

to purchase a larger plan if they feel the need to.

Disability insurance is either provided by your employer, or

can be purchased privately by the worker. According to the

Bureau of Labor, only one-third of private industry workers

have access to employer-sponsored disability insurance.

For the lucky 33 percent, employer offered disability

insurance can range in coverage where the employer may

pay 100 percent of the premiums, or pay 0 percent and

offer it as a voluntary benefit.

For the other 66 percent whose employers don’t offer

disability insurance, or who are self-employed, they will

need to find a private insurance plan on their own.

Unlike other states, an employer is not required to offer

disability insurance in Colorado. Nor is a worker obligated

to purchase disability insurance.

A worker can either find an agreeable plan by searching

online, or they can use an insurance broker who can

locate a specific plan based on the worker’s needs. When

comparing different plans and insurance companies an

individual should ask questions like:

• Does the plan pay benefits when a worker is unable to do their own job or any job?

• What is the elimination period (waiting period before benefits kick in)?

• Does the plan pay for partial and/or total disability?

• Does it have cost-of-living adjustments?

• What is the benefit amount and length?

• Does it cover reoccurring disability?

Unlike disability insurance, workers’ compensation only

applies to those who sustain a job-related injury. According

to Forbes, 90 percent of disability claims are due to

illnesses or injuries sustained while not on the job. Hence

disability insurance is far more utilized than workers’

compensation.

HOW MUCH DO I NEED?

IS IT REQUIRED IN COLORADO?

WHERE CAN I FIND IT?

HOW DOES IT DIFFER FROM WORKERS’ COMPENSATION?

Q.

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WHO PAYS FOR DISABILITY INSURANCE?Q.

This legal guide is intended for general informational purposes only and should be used only as a starting point for addressing your legal issues. This legal guide is not legal advice, and does not create an attorney-client relationship between you and Robinson & Henry, P.C., or you and any lawyer. It is not a substitute for a consultation with a lawyer licensed to practice in your jurisdiction about your specific legal issue, and you should not rely on this legal guide.

MUST-KNOWS ABOUT DISABILITY INSURANCE CONTINUED...


APPLICATION PROCESS - THINGS TO KNOWExcluded conditionsDepending on your insurance company and

your type of coverage, some policies have

disqualifying conditions. This means that some

pre-existing medical conditions may have a

harder time getting insured and/or keeping their

long-term disability benefi ts.

When initially applying for a policy. When

applying for a disability insurance policy, the

insurer will conduct a “look back period” in which

they review the last 30 days (or some other

period) for any medical episodes. A medical

episode such as a cancer diagnosis or a car

accident may either hamper your ability to get

coverage, or the insurer may say that they will not

cover any future disability that arises from those

medical episodes.

Additionally, some medical conditions are not

covered at all. Depending on the policy, typical

excluded conditions are: drug abuse, alcoholism,

attempted suicide or injuries sustained due to

crime or acts of war.

Limiting benefi ts to 24-month period for certain

disabilities. Additionally, disqualifying conditions

come into play after a worker has successfully

submitted a disability claim and has been

receiving benefi ts for a period of 24 months.

After this period, the insurer may say that they

will no longer cover benefi ts for those who are

disabled due to: mental, neuromusculoskeletal or

soft tissue disorders.

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AGE

GENDER

OCCUPATION

SMOKING

PLAN TYPE

Younger persons generally tend to pay less than older workers.

In individual plans, women tend to pay more than men.

If your job falls into a “high-risk” category, you’ll likely be paying more than someone whose job does not.

Those who use tobacco are usually charged more.

Higher benefit amounts (covering 80 percent of lost income versus 60 percent) and longer benefit periods (2-year period versus period that covers you till age 65) will be paying more than those with lower benefit amounts and shorter benefit periods.

Physical factors that influence insurance costs Additionally, workers also must be aware that there are physical factors that may influence the cost of their

premiums. Such factors may include but are not limited to:

Submitting a disability insurance claim Every application process can vary depending on the insurer, the claimant and the particular case. The below

process is a generalized overview of what a worker can expect when submitting a claim. Please review your own

policy for specific details.

While every policy is different, a worker usually needs to submit a claim about 20-30 days from the date of the

disabling event – this may be the date you were injured or received a diagnosis from you doctor. Once this

deadline is met, make sure you keep an eye open for further correspondence from your insurer who may be

requesting additionally information. An insurer may also ask that the worker attend a medical exam.

GATHER EVIDENCE required for

disability claim

SUBMIT CLAIM 20-30 days after disabling event

FOLLOW-UP EVIDENCE Comply with additional information request and

medical visits

WAIT FOR DECISION Wait for insurers

decision

1 2 3 4


Gathering EvidenceWhen you start the claim process, you will need to gather proof of your disability. A note from your doctor saying

you are disabled is not enough evidence! Here is a list of things a person should consider when obtaining

evidence for their disability insurance application.

Types EvidenceMAKING SUBJECTIVE EVIDENCE CREDIBLEWhen compiling evidence, it’s important to realize that there are two forms of medical evidence, subjective and objective. Objective evidence are things like x-rays, MRIs, blood tests and clinical observations of a medical professional, such as documenting a rash, fever or swollen glands.

Subjective evidence are things like pain and fatigue, which are hard to verify. Thus, it is extremely important to support subjective statements with objective testing and clinical observations. For example, a worker who claims of extreme back pain would have stronger evidence if it was supported by objective evidence like x-rays of a herniated disc.

OWN OCCUPATION VS ANY OCCUPATIONDepending on a person’s policy, an insurance company will require that an individual prove they are unable to continuing working in either their own job or any job. This is an important distinction. If you provide evidence that you cannot continuing working in your own job, but your policy is an “any” policy, then your claim will probably be denied. Depending on your policy, building evidence to show an inability to work in one’s own occupation may not be enough.

REFUTING JOB ACCOMMODATIONSAn insurer may also look at whether or not the employer can make accommodations that may allow the disabled employee to work. For example, if a disabled person claims they cannot sit for long time periods, then the insurer may deny disability

√ Witness Statements

√ Fuctional Capacity Evaluations

√ Vocational Evalations

√ Physician’s Clinical Notes

√ X-rays & Blood Tests

√ Work Place Photos

√ Memory Loss

√ Pain

√ Stress & Anxiety

√ Fatigue

√ Depression

OBJECTIVE EVIDENCE SUBJECTIVE EVIDENCE

coverage if they determine that the employer can provide an ergonomic workstation. So, it is important to document that any accommodation by the employer is insufficient, or that the worker’s disability is beyond accommodation.

OCCUPATIONAL ANALYSISWhen determining a worker’s ability or inability to work, it’s important to include a detailed analysis of what your job duties are to accurately provide evidence of why you cannot do them. Evidence such as workplace photos, job descriptions and job analysis’ by a vocational expert are useful. Otherwise an insurer will use generalized definitions which may not accurately reflect your work environment and can lead to the insurer denying disability benefits.

FUNCTIONAL CAPACITY EVALUATION (FCE)Basically, a FCE is a physical evaluation of a worker’s ability to carry out their job functions. Over two days, a FCE tests a worker’s ability to perform functions necessary to their job, such as lifting, carrying, pushing, sitting and standing. This type of report is useful for demonstrating how a disability affects a person’s ability to perform on the job. A validity test can also be used in conjunction with a FCE, to ensure maximum physical effort is being used. Otherwise an insurer may dispute a FCE by claiming the worker exaggerated their symptoms.

As it takes place over two days, a FCE can provide objective evidence of those whose disability involves fatigue. Without it, subjective claims of fatigue


are hard to prove. Some FCEs can be completed in a day, but if the worker suffers from fatigue, then it is suggested that they inquire about a two-day evaluation.

Additionally, for those who suffer from mental disabilities, there is a corresponding test call a Neuropsychological Evaluation. This type of evaluation looks for cognitive defects that may affect a person’s ability to carry out their job by performing a series of psychological tests on the individual. This evaluation should also be accompanied by a validity test.

VOCATIONAL EXPERTFor insurers to determine a person’s ability to perform their job duties, they first must determine what duties are associated with that job. Most insurance companies use DOT (Dictionary of Occupational Titles) to define job roles. Problems arise when generalized job descriptions do not take into account the numerous variabilities each job has.

A vocational expert can help strengthen a disability claim by determining a worker’s occupational duties and whether or not the worker can perform those duties. Additionally, a vocational expert can assist workers who have the “any” occupation policy (as discussed in the previous section). By conducting a Transferable Skills Analysis (TSA) and a Labor Market Survey (LMS), a vocational expert can determine what professional qualifications a worker may have and if they can be transferable to another available occupation.

If a vocational expert can determine if a worker lacks the needed skills for an available job, or if there are no current available jobs in the local area (that meet the minimum earnings requirement), then this lends great creditably to a disability claim.

Gathering Evidence Continued...

Appealing a denial of a disability insurance claimThe initial application and appeal process is extremely important and here’s why – any evidence not submitted during

this process is generally not admissible in future litigation. Hence, if you miss critical evidence while the administrative

record is open, you cannot use it later should you need to take your case to court. So thoroughly documenting all the

information related to your disability is crucial.

The time a person has to gather this evidence and submit their appeal is generally 180 days after being denied. Not

abiding by this deadline runs the risk of losing your ability to appeal your insurers decision.


Most disability policies are subject to the federal

law of ERISA (Employee Retirement Income Security

Act), which rules that once a claimant has used all

of their appeal opportunities, their case record is

closed. So, while it’s open, it’s important to cram

the administrative record with as much favorable

evidence as you can. Determine what evidence is

needed for the claim to win in litigation and add it to

your appeal.

Here is a summary of important things to keep in mind when appealing a denial:

With a fine-tooth comb, review your entire denial

letter. Look for the insurers criticism of your evidence

and notes on missing or lacking evidence. These

points will become the skeleton of your appeal

and point toward what information you will need to

obtain. Depending on your denial, you may need to

include a rebuttal from your treating doctor and get

additional testing.

By law, an insurance company is required to provide

you a copy of your claim file. It’s important to

review this file (as you did the denial letter), due to

additional criticism that may not have been present

in the denial letter.

It’s important to send your appeal well in advance

of the 6-month deadline, as well as acquire proof

of receipt. Otherwise the insurer may cite a statute

of limitations violation and the appeal may then be

considered invalid.

TREAT THIS AS IF YOU’RE PREPARING FOR TRIAL

START BUILDING YOUR CASE BY REVIEWING YOUR DENIAL LETTER

CONTACT THE INSURER FOR A COPY OF YOUR CLAIM FILE

ABIDE BY THE 180-DAY DEADLINE

A frequent problem in denials or terminations are that insurance companies fail to properly give credit to objective evidence. Common insurance mishaps are:

• Failing to credit side effects from medications.

• Reviewing insurance doctor did not consider worker’s occupation.

• Failure to credit treating doctor’s opinion.

• Not giving recognition to creditable claims of pain and/or fatigue.

Getting the insurance company to admit these failures can be incredibility difficult. A disability attorney will have a much easier time fighting with the insurer, as they are aware of previous cases in which the court ruled in favor of a disable person and use these case laws as legal precedents against the insurer. Additionally, an attorney can fight these oversights by arguing a case for an arbitrary and capricious standard or deficiencies.

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Fighting benefit termination– Importance of continuing disability establishment You’ve been approved to receive disability benefits, woo-hoo! Well, let’s not get ahead of ourselves just yet. Sadly, just because your claim has been approved, does not mean that the insurer will not find a reason to terminate those benefits, months or even years after paying them.

There are a variety of reasons an insurance company may use when sending you a termination of benefits letter. Below are some of the reasons why a person’s benefits may be terminated: To avoid having your benefits terminated follow these guidelines:

1. Your disability falls under the policy’s 24-month time limitation.

2. Policy’s definition of disability may shift after 24-months from “own” occupation to “any” occupation.

3. You have aged out or reached the maximum benefit period.

Every policy is different, so it’s important to understand if your disability has a time limitation or if the definition of disability shifts from “the inability to perform one’s own job” to “any job.” If your benefits have been terminated due to reasons 1 or 2, it is recommended that you seek the advice of an attorney who can help you assess your case for appeal.

How a disability attorney can helpYou can bet the insurance company has a host of medical and legal professionals to review every word of your claim, looking for flaws and holes in your evidence and statements. As such, it’s not uncommon for insurers to deny valid claims, delay payment or terminate current benefits. Therefore, it is highly recommended that a person retain legal help should they run into problems.

Finding and submitting the proper evidence of a disability is paramount to your case. A disability attorney is a learned professional in interpreting individual insurance policies and finding what insurance companies require to establish disability. And because most disability claims are governed by federal law (ERISA), workers have the option to hire attorneys out of state.

When it comes to attorney fees, contrary to popular belief, a disability attorney is an affordable option. Law dictates certain ethical standards for attorneys, one being that they must operate in their client’s best interest. Since most disabled persons cannot work, it would be unethical to charge them normal attorney fees. Hence most disability attorneys charge a “contingency fee.” According to the American Bar Association, this means you don’t pay any fees if your case is lost. If your case wins, then the fee (usually a fixed percentage) will be taken out of the money awarded to you.

To avoid having your benefits terminated follow these guidelines:

• Continue medical treatment and send periodic proof of your continuing disability. Even if your disability isn’t expected to change, those who do not continue to receive medical treatment may be seen by the insurer as proof that your condition has improved. Also, check if your policy requires proof (perhaps an annual recertification) and when it must be submitted.

• Check to see if your policy requires you to apply for Social Security disability benefits. Many insurance companies do require this, as they can offset their payments, should you also receive a check from Social Security Administration. If they do require it and you do not apply, then your benefits may be terminated.

• Typically, you should not work while receiving disability benefits. Should the insurer find out that you are working, they may terminate your benefits believing your condition has improved.

If you have additional questions or would like a free consultation with our

disability attorney, please call (303) 688-0944.

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