Winning Isn't Easy: Long Term Disability ERISA Claims

What Every Attorney Needs To Know About Long-Term Disability Insurance & The 3 Ways To Purchase A Disability Plan or Policy

July 12, 2022 Nancy L. Cavey Season 2 Episode 51
Winning Isn't Easy: Long Term Disability ERISA Claims
What Every Attorney Needs To Know About Long-Term Disability Insurance & The 3 Ways To Purchase A Disability Plan or Policy
Show Notes Transcript

In this Episode of Winning Isn't Easy - learn about "What Every Attorney Needs To Know About Long-Term Disability Insurance & The 3 Ways To Purchase A Disability Plan or Policy" from Nationwide ERISA Long Term Disability Attorney Nancy L. Cavey.

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Attorney Nancy L. Cavey:

Hey, I'm Nancy Cavey, national ERISA, and individual disability attorney. Welcome to winning. Isn't easy. Before we get started, the Florida bar tells me that I have to give you a legal disclaimer. So here it is, this podcast is not legal advice, nothing. However, is gonna prevent me from giving you an easy to understand overview of the disability insurance world, the games that carriers play and what you need to know to get the disability benefits you deserve. So off we go, are you an attorney with a long term disability policy? Well, if so, you're in luck because this episode is for you. I'm gonna be talking about three things that every attorney needs to know, and didn't learn in law school about a disability insurance claim. Number one, what every attorney needs to know about long-term disability insurance, and the three ways to buy a disability insurance plan or policy two. How to make time to look at your disability insurance policy before it's too late. And the seven most important terms in every disability insurance policy or plan, let's take a break before we get started.

Promotional Message:

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Attorney Nancy L. Cavey:

Welcome back to winning. Isn't easy. What every attorney needs to know about long-term disability insurance and the three ways to buy a disability insurance plan or policy. Look, I know after you passed the bar and you got your license, you were focused on building a thriving and profitable practice, but at K V law, I know that unexpected accidents, illnesses, or disability can jeopardize your practice and your lifestyle. In fact, statistics show that you have a one in four chance of becoming disabled during the course of your working life, you should have long term disability insurance to provide you with financial peace of mind and help your family maintain their lifestyle if you're unable to work . So what is long term disability, insurance, long term disability, insurance policies and plans. Aren't uniform. There isn't one uniform policy or plan in the United States. Each disability carrier has their own policies or plans. In fact, they have multiple versions of policies or plans . Each has its own set of definitions, methods of proof, benefits, claims, appeals, processes, litigation tracks, long term disability benefits pay you a monthly benefit. Assuming you meet the requirements of the policy or plan and are disabled as that term is defined in your policy or plan. So long term disability insurance is there to provide you with financial piece of protection. The three ways that you can purchase a disability insurance policy, if you're a lawyer. Well, I know of all the classes we took in law school insurance disability law was not one of them, even if it was offered at your school before you apply for a long term disability insurance policy or plan, you have to understand there are three primary ways to get this, and you have to understand the pros and cons of each, how you decide to buy your insurance can have significant consequences. If you become disabled, then have to apply for benefits. So, number one, you can purchase a policy, an individual disability policy through an independent agent. That policy is customized to your personal needs and your budget. A private disability policy is governed by your state's applicable contract law. Any denial or termination is a breach of contract claim, and you can litigate this in state court. Obviously an IDI policy is expensive. The second way is to purchase a disability insurance policy through a professional organization like the ABA or your state or local bar association, a group policy or plan offered by such an organization is most likely covered under the federal law known as ERISA. ERISA is not a plaintiff friendly law. The remedies are limited and worse. Yet many states allow insurance plans or policies to use. What's called an arbitrary and capricious standard of review. I'm sure you never heard of this in law school, the arbitrary capricious standard , uh , review really puts a set of handcuffs on a federal judge and limits their ability to overturn a wrongful claim , uh , denial or termination. The appeal of a denied or terminated case is the trial of your case. Discovery is limited, and your case is truly decided on a motion for summary judgment. And obviously this insurance is gonna be much cheaper than IDI . The third thing you can do is to purchase a disability insurance policy through your employer now, unless your employer is a governmental agency or church based , your policy is also gonna be governed by the ERISA statute with all the pitfalls. I just outlined ERISA employer sponsored insurances inexpensive because there's lots of limits on what's covered. There are deductions from your benefits, like the receipt of social security benefits, or PIP benefits or personal injury settlement or worker's comp benefits. So what one hand gives you the other hand takes away and you may not have the amount of benefits that you think you have because of these offsets or reductions in an ERISA disability policy. And I'll tell you purchasing a disability policy or plan is a wise idea. My dad was a world war II veteran of the Pacific. He was a , a , a pilot. And , uh , when he came back from the war, he went to work with our family business, an insurance brokerage business in Baltimore, and he had the fourth site to buy a disability insurance policy. In the event, he became disabled. When I was in junior high school, he was diagnosed with leukemia and our life was turned upside down. I watched him struggle for five years before he made a difficult decision to stop work and apply for benefits. And we lived off of his , uh , IDI benefits, his social security benefits and the buyout of the business. But if my dad hadn't planned, we would be, have been in pretty tough circumstances. So I've been there. I represent attorneys just like you. I'm telling you that you should be purchasing a disability policy or plan. And it's a wise idea to protect yourself financially, if possible, with an IDI policy. If you have any questions about what policy might be right for you, you can give my office a ring and I'm more than happy to talk with you . Let's take a Welcome back to winning. Isn't easy making time now to look at your disability insurance policy before it's too late, is a wise thing for an attorney to do. Look COVID 19 was a horrific reminder how the world can be turned upside down in a matter of weeks. And for many of us, the world is still a bit upside down . Some of my clients learned a horrific lesson about their disability insurance and their business interruption insurance. Not only do they have long term complications of COVID , but their ability to work to practice their occupation has been impacted. Some are only working part-time others have had to sell their practices. Others have had to stop working together and they're finding out way too late that they can't make it. Financially. Lessons learned too late and taking a proactive approach to reviewing your disability policy is key. I bet you haven't looked at your disability policy or plan since you bought 'em and you sure don't know what your coverage was that you purchased and you don't know what your benefits are. You don't know what you have to prove. You don't know how they coordinate. You don't know a whole lot other than the fact that you've got a disability policy or plan it's way past time for a policy review. So while you're waiting for your next zoom event, get that disability policy or plan out. And the first thing you should look for is terms terms in the policy. So let me give you a laundry list. Number one, how much is your monthly policy benefit? Two, is there a reduction or offset for the receipt of security, disability benefits, pensions workers , comp, settlements, personal injury , settlements, practice, buyouts, equipment buyouts three. Is there a reduction for any other disability insurance benefits? Do you happen to know that some disability policies will reduce your benefits by what you get from another disability policy? Four? How long do you have to be out of work, which is known as elimination period before you can collect your benefits. And more importantly, can you maintain your lifestyle on this amount of income? So now that you know what your net monthly benefits are, the second question is what was the occupation you insured disability policies do not ensure a job. The policy ensures your ability to do the material and substantial duties of your occupation as that term is defined by your policy. So what should you consider? What's the policy definition of disability? What's the policy definition of occupation. If you are an attorney who has a specialty, is your disability benefits based on your board certified certified area of practice. And as your specialty changed, is there a dual occupation provision in the policy? And how is that defined? And do you have a dual occupation? You might be , uh , an attorney, but you also may be an entrepreneur that owns apartment buildings. The third consideration is what kind of benefits you're eligible to be paid. Now you can have a policy that would pay total disability benefits. If you're unable to work, you may have a policy that pays residual disability benefits. If you can work, but have a certain amount of , uh , lost wages. But there are some policies that say you have to be totally disabled before you can file a residual disability claim. So you don't wanna stop work , uh, and find out that , um, you may not be eligible for the kinds of benefits that you think you're , uh , entitled to, or you may be trying to work part-time and , uh, submit a disability claim only to learn that you have to be totally disabled before you can file a residual disability claim. Now, the other thing I know sounds strange is understanding that occupation because many disability policies will defer, define the term occupation differently. Many of them will say that the occupation is to be defined or interpreted , uh , by how your occupation is performed. Based on the dictionary of occupational titles, go get out the dictionary of occupational titles type in the word attorney, and they may have 10 different types of attorneys. But if you look at the description, this description hasn't been updated in about 30 years and how we do what we do is not necessarily consistent with a dictionary of occupational titles. So you need to understand that the fourth major consideration is how long you're eligible for benefits. Now, most policies will pay benefits until the retirement age, but there are some policies that say, look, if you've got a mental nervous condition or your medical condition is based on subjective conditions like migraines, post-concussive syndrome, cognitive issues, fibromyalgia, your benefits are just limited to two years, and it doesn't matter how disabled you are after two years, you're done. You need to know the answer to those questions now so that you can make changes in your disability coverage. Now, not tomorrow next month, next year. Now I know I'm as guilty as you are of putting off things that are important to my family and to our finances, but I've had a kick in my pants because my dad became disabled while I was growing up. And I know firsthand what it's like to be in a situation where the breadwinner has lost their ability to work. In fact, statistics show that 25% of Americans will become disabled at some time during the course of the lifetime, COVID 19 is a wake up call. It's shown us how fragile life is and how fragile our incomes are, regardless of how healthy we are, how much we exercise or how well we eat. So take the time to be proactive, take a proactive approach to your disability. Insurance planning, give yourself and your family true financial peace of mind and knowledge that you can maintain your lifestyle that you and your family deserve. If you become disabled, let's take a break.

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Attorney Nancy L. Cavey:

Welcome back to winning. Isn't easy. The seven most important terms in every disability insurance policy or plan that a lawyer needs to be looking for when they're shopping for a new policy, as I've said, there is no uniform disability insurance policy or plan in the United States. Now we purchase disability insurance as a safety net to provide us with financial peace of mind. If we become disabled, your entitlement to benefits, the amount of benefits, how long you get the benefits, what law governs the benefits. Those can all make a difference in whether you have financial peace of mind. So before you go out shopping for new plan or policy or review your policy or plan, I think there are seven important terms that you have to consider because it will make or break your finances. Number one, what law governs. If you've purchased a disability insurance policy on your own, or through an insurance agent, you most likely have a private disability insurance policy governed by state law. On the other hand, if you purchase that disability policy through employer or an association, your policy's gonna be governed by the ERISA act. Now there are exceptions. If you work for a church based employer or a state governmental agency like Pinellas county or the city of St Petersburg, or the state of Florida, your policy or plan is gonna be governed by state law. And so where you end up in litigation, be it state court, federal court is key. You wanna be in state court two, if the policy or plan is governed by Rissa, is there a get outta jail free card provision that makes it hard to overcome a wrongful claim to dollar termination. Now, many disability policies have what I call , uh , a get outta jail free card. It's a discretionary , uh , clause. We didn't learn about this in law school. And discretionary clauses are also known as arbitrary and capricious. Now what we may think as lay people as arbitrary and capricious is not arbitrary and capricious in the world of ERISA , um, the course will use the term unreasonable, but unreasonable is really not the right term. In my view, the term that we should be thinking about is is, is you , do you have, what's called a Denovo standard of review. In other words, do we have a situation where the disability carrier has not reserved discretion in themselves? And as a result, a judge can substitute their own judgment for that of the disability carrier. Otherwise, it's gonna be tough to overcome a wrongful claim, denial or termination. Now each federal circuit has their own standard of review here in the 11th circuit, we have , uh , a multistep test, but it boils down really , uh , to three primary things. One, we have to establish to the judge's satisfaction that the decision is wrong. And if the judge says that the decision's right, you lose. But if the judge says the decision is wrong, you don't win because you have to go to the second step. And that is to show that the decision is unreasonable. Now, case law is pretty clear. The disability care gets to pick and choose who they wanna believe. They can use their liar for higher doctors and pick their liar for higher doctors over your treating physicians , uh , opinions. So if the judge says, look, I don't like this decision, but I see this reasonable basis. I mean, they got a liar for higher doctor who says you're not disabled. It's very hard for the judge to overturn the denial. If the judge says, look, I don't like this decision. And I don't think this decision is reasonable. You still don't win because it's step three. Uh , and I've boiled this down from seven to three. Um, you have to show that the decision of the carrier has been in , in , uh , or the plan has been influenced by their bias. And that bias is the result of a conflict between their role as the decider and the payer. Now in the 11th surrogate, we have an awful decision , uh , that basically says we have the limited right to take discovery. It's the , it's the Howard versus a Liberty life case. And that makes it very difficult to show that there is this bias as a result of conflict. And we have to prove all three things. So it's just not a question of, am I disabled? It's a question of whether you can overcome a wrongful claim, denial or termination based on the applicable standard overview . Number three, what's the definition of disability. Normally , uh , the definition of disability is the inability to perform your own or any occupation. Uh , and normally an own occupation definition is paid for two years. Then after two years, it changes to an inability to perform any occupation by virtue of your education, your skills and restrictions and your limitations and the real world , uh , situation might be that you really can't do another occupation, but if the disability care can show that you can do a sedentary job sitting on your rear end all day, then they're probably gonna terminate your benefits. Four , what's the definition of occupation. Now, occupation can be defined as the occupation you were performing for your employer. At the time you became disabled, your occupation is performed by the local economy. Your occupation is performed in the national economy. Your occupation is described in the dictionary of occupational titles or your occupation is based on your board certifications. And the starting point to proving your disability is to understand the policy definition of occupation, cuz you've gotta work backwards from there. Five policy or plan limitations. Now benefits can be limited to just two years for con conditions like mental nervous conditions were self-reported or subjective medical conditions and even substance abuse. So you need to understand, are your benefits gonna be limited? And if so, how are they gonna be limited number six, policy or plan exclusions. It's not unusual for policies or plans to exclude coverage for self-inflicted injuries or injuries related to crime or war. Now you also may have a policy or plan that limits your coverage for a preexisting condition based on a rider . So let's say you've had prior back problems, you get your disability policy and they say, well insure you, but we're gonna issue a rider that excludes any disability caused by your preexisting herniated disc . And you have a slip and fall and you become disabled as a result of an aggravation of that preexisting herniated disc . The planner policy is probably gonna deny your benefits. Seven, what are the filing and appeal deadlines deadlines matter in commonly in an ERISA disability case, you will only have 180 days in which to file an appeal of a denied or terminated case. And the appeal is the trial of your case. If you failed a timely file, an appeal, you can be barred from filing that lawsuit in federal court on the basis that you haven't exhausted your administrative remedies. And by the way, there's also time limits in which to file a lawsuit. These time limits can be found in the policy or the plan, and they're also subject to applicable state law. So making a mistake with any of these types of policy plans or provisions , uh , can result in financial disaster, regardless of how disabled you are interpreting the terms of a disability policy or plan can be difficult. Even for lawyers. I think you should have a policy review of your current policy to understand what you've got. And if you're looking at policies, you shouldn't be relying on the agent to tell you what it is you're getting and how the policies or plans may work together or not work together. If your doctor has suggested to you that you're unable to work because of a disability, I think you should be consulting with an experienced disability attorney before you stop work and apply for your benefits. Cuz I assure you representing attorneys across the United States. There are lots of things we need to do to get your claim ready to file. Before you stop, work and apply for benefits, you have to understand what your planner policy provides. You have to understand how to pick the right day to become disabled. You have to understand what medical proof will create a winning disability insurance claim. I don't under , I don't care if you're a personal injury lawyer, a social security lawyer, a contracts, lawyer, you name it. I don't do , uh , that type of work. I do one thing I do ERISA disability and ID disability litigation. That's the kind of expert you wanna be consulting with. As a blink said, a person who represents themselves has a fool for a client. So don't be a fool. I hope you've enjoyed this week's episode of winning. Isn't easy. If you've enjoyed this episode, consider liking this episode, leaving a review, sharing it with your family or friends and subscribing to this podcast. That way you can be notified every time a new episode comes out. I hope you've enjoyed this episode and I hope you tune into next week's episode of winning. Isn't easy. Thanks .