Winning Isn't Easy: Long Term Disability ERISA Claims

Episode 19: Why You Need To Know What Is In Your Disability Policy Before You Stop Working & Apply For Benefits

January 04, 2021 Nancy L. Cavey Season 1 Episode 19
Winning Isn't Easy: Long Term Disability ERISA Claims
Episode 19: Why You Need To Know What Is In Your Disability Policy Before You Stop Working & Apply For Benefits
Transcript
Nancy L. Cavey:

Welcome to winning. Isn't easy. I'm Nancy C avey national ERISA disability attorney. Before we get started, I've got to give you a legal disclaimer. This podcast is not legal advice. The Florida bar association says I've got to say it. So I've said it let's get down to business. I w ant to talk about three things today. First, before you apply for or file a claim for benefits, you should know what policies you have. Number two, before you apply for or file a claim for benefits, you should know what's in your policy. And number three, before you apply for a file, a claim for benefits, you should know how to pick the right day to be disabled, r eady to take a quick break. But when we come back, we'll begin, stay tuned.

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Nancy L. Cavey:

Before you apply for or file a claim for benefits, you need to know what policies you have. Well, what are the potential policies you might have the first you might have is an individual disability insurance policy, and that's the best. And it's customized to you and your personal needs. Secondly, you might have an ERISA disability policy that you bought through your employer. The third might be an ERISA disability policy that you have through an association, or you also might have a life insurance policy or a group insurance policy that has a waiver of premium. That allows you to keep you your coverage while you remain disabled. Or if you're a business owner, you might have two additional types of coverage. You might have business, overhead insurance that covers business expenses during the period of disability. And you might have a disability buyout policy. That's known as a key man insurance policy. The money is paid to the business to buy out the disabled shareholder. So before we get started, let's get your policy or policies out. We might have one, or you might have a number of policies. So I want you to get out a sheet of paper for each policy, or you might want to just set it up in an Excel spreadsheet. I want you to page through the policy, and I want you to write down key terms because we're going to compare them. Now. Each policy has separate terms and separate have potential interactions with each. So we want to understand that before we stop working and apply for benefits, what are some of the key definitions you want to know? Well, you want to know one, what the elimination period is two . You want to know what is the standard of disability? What do you have to prove to prove that you can't do your own occupation? Is it material and substantial duties? Next thing you want to understand is the definition of any occupation, because at some point your policy may transition into an , uh, uh , own occupation policy. So what's the standard , uh, for the definition of disability. And you may begin to see that there are differences between these definitions. Now you also want to understand a crucial term and that's own occupation, because that can be defined differently. Is it your occupation that you were performing at the time you became disabled? Is it the occupation , uh , that you were performing for your employer? Is it your occupation has performed in the national economy? So it's key that we understand what it is you, what your occupation is. Cause we have to prove that you can't do that occupation and not a job, an occupation. The next term you want to be looking for are going to be policy limitations in terms of the length of coverage, mental, nervous, limitations, subjective condition, limitations. These are traps. Now the subjective medical condition is a particular trap because it may be so broad to include conditions like fatigue, migraines, soft tissue conditions. And you need to know that now because your benefits will only be limited to two years. The next set of policy definitions that are important in my view are going to be other income revisions. Most disability carriers will allow the carrier to reduce benefits by the receipt of these other income benefits. They can include personal injury, settlements, workers' compensation, settlements, that they generally will include a social security, disability benefits, independent benefits, but they might even include things like retirement benefits. And the other thing that you need to understand is , um, whether or not there is any pre-existing condition clause that could potentially stop you in your tracks, because if you recently got this policy and you become disabled , uh, during , uh, it was called a look back period are gonna apply the look back period and say, Hey, your coverage became effective on this date, but we're going to look back six months before this coverage became effective. And we're going to look to see whether or not you got any treatment for the condition that you're claiming to be disabling. And that's called , uh , basically preexisting condition clause exclusions. And we need to know that from the very beginning, before you stop working or apply for benefits, because you may need to continue to get , um, to continue to work, but not get treatment. That is obviously something you can't fix. Once you have a stop working and you've applied for your benefits. So put that together, either on a piece of paper or an Excel spreadsheet, maybe you want to use different colors for your different policies so that you can start seeing the differences in the terms of these policies, because each policy has their own proof, their own mechanism of proof. And if you don't understand what it is, you have to prove for each one of these policies, it can be a disaster. If you pick the wrong date or you apply for benefits and you just don't have the supporting documentation that establishes that you meet the necessary definitions in your policy, all right , ready? We're going to take a quick break and then we're going to resume when we return stay tuned. So before you apply for , uh , or file a claim for benefits, you need to know what policies you have and you need to know what's in your policy. Now I touched a bit about what you should know is in your policy, but one of the most important policy terms that I think you need to know is what's called a residual disability benefit. Why is that important? Well, many people that I represent have been working while there have been disabled and they start to see a drop in their income and that might trigger their entitlement to monthly benefits based on a reduction of income. Now, the issue becomes, when did this income drop off? How can we prove this related to your disability? What's the method to calculate the before monthly income, because that's the number against which everything's going to be compared. Uh, how do you calculate your post disability, monthly earnings? And then ultimately, how do you calculate your entitlement to benefits? And you also want to know, is there a provision in this policy that says, if you go so many months without collecting these residual disability benefits, you lose your right to those benefits. So things like the sale of a business asset, like a , uh, a building or, or other property can impact the calculation in the payment of residual disability benefits. And I've seen that happen to a client who lost his disability benefits because the practice he was in Seoul , the building that blew through his income limits and the carrier said, well, you don't have the necessary loss of income for the appropriate period of time, too bad. So sad your disability benefits are gone. Another key provision is notice , um, and you need to be giving the carrier timely , uh , notice. Uh, and that's really key, particularly if we're, if we've got a residual disability claim. Uh, the other thing that I think , um , is important , uh, is the understanding of what the causal is between the diagnosis and the restrictions and limitations and the inability to perform your own or any occupation. So you need to understand, look, what's what do I have to prove? What's in my medical records and what are the symptoms that , um , make me unable to do my own occupation or any occupation and have I conveyed, or can I convey that information to my physician and have my physician support the , um, uh, my application for disability benefits. Now, I want you to understand that these are key provisions in each of these policies, but what also is important is another provision in these policies that might say, look, if you get disability benefits from another disability carrier, we don't have to pay you benefits where we might get to subtract that or consider the amount of those benefits and calculating your benefits. So the other important thing we need to understand is the interaction between the disability insurance policies and whether they will offset or reduce each other. Because I've seen cases where a disability policy becomes worthless because one policy says that they can reduce their benefits by the receipt of benefits in another policy. Now, most individual disability policies won't say that, but ERISA disability policies just might say, Hey, if you collect benefits, individual disability benefits, or you collect ERISA disability benefits from another carrier, guess what? We don't have to pay you benefits, or we get to reduce , um , that income. You need to know those sorts of things before you stop working and apply for your benefits. Now , I know this has been a lot of information to absorb. So let's take a break before we talk about the third topic.

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Nancy L. Cavey:

Welcome back to Winning Isn't Easy. Let's talk about how to pick the right day to become disabled before you apply for benefits or stop working crucial mistakes happen because people don't know how to pick the right day to be disabled. So what do I mean? Well, the first question in my mind is what is the disabling condition? What is the medical condition that prevents you from working? What are the symptoms of your disabling condition? What's the objective proof of the diagnosis, restrictions and limitations. What's the causation between these restrictions and limitations and your inability to do your own occupational duties. I remember when we started this podcast episode, we talked about knowing the definition of own occupation and what you have to prove in terms of disability. This is where we start to have the rubber meet the man , if you will. Now, the next thing that's crucial in my view is looking at those medical records. Does your doctor support your claim? Are you seeing the right type of doctor? Is your doctor willing to fill out attending physician statement forms? Because if they aren't, the doctor doesn't support, you won't fill out forms. You need to know that now so that you can switch doctors because you cannot win a case without the support of your doctor. Now, the other thing you need to understand is that we want to correlate your date of disability with what's happening to you at work. What do I mean, I'll give you a couple of scenarios. It might be that , uh , you're on a medical leave of absence , uh , and you've applied for your benefits and you're going to be terminated. You know, that that's what normally happens. That's not the scenario I'm talking about. When I'm talking about are two scenarios. One is where you're working while you're disabled, but you're not losing wages. You're hanging on by the skin of your teeth. And you get terminated. Your claim is going to be denied because you were not disabled on the day you last worked. And by the way, when you decide to apply the next day, you didn't have any coverage. The other issue that we have of course is you are having problems. You're working. It's just a question of timing and you're hearing rumblings and you're scared that you're going to get terminated. I don't wait. I tell my clients, go get a doctor's note, take you out of work now so that we have a viable claim. So if in fact you get terminated, it doesn't matter because you were disabled at the time you applied and you still have your coverage. Now, the other issue that's important in terms of picking the right date of disability is your financial documents. Particularly if you're a professional, if you have a residual disability insurance policy, what we're looking at is when did your disabling condition impact your income, such that you're losing generally at least 80% of your pre-disability earnings. And so we got to figure out what's the definition of pre-disability earnings, and we have to get the necessary financial documents to figure out is it going to be the one-year average, the three-year average, a five-year average or a 24 month average, depending on the terms of your policy. So once we know that before model income, that we need to be looking at your monthly financials to figure out what it is you're earning, and are you losing at least 80%? Because if you are, then you might be eligible for your benefits. But then once we see the math, we've got to correlate it with the medical. And if the medical isn't showing your reporting of symptoms, impact on your functionality, difficulty doing your job, the carrier is going to be scratching their heads saying, okay, well, see, I see a financial loss, but what's the connection between your medical condition, because you're not meeting the definition of disability here. So you can see in the case of a residual disability claim, that takes a heck of a lot of planning to do before you decide that you're disabled and picking the right date to be disabled. I can't generally fix picking the wrong date of , uh , being disabled. Um, either you pick the right date or you don't pick the right date, if you pick the wrong date and you've been terminated generally hard to fix if it fixable at all. So it really takes a concrete, thorough analysis of your disability policy, a review of your medical records or review of the financial information, and sometimes even a vocational analysis to pick the right date, the claim you're disabled. Why? Because when I handle an application, I submit a shotgun, all claim packaging . That's the goal. I want your application with all the supporting documentation to hit the adjuster's desk, like a big thud . So there's no question about your entitlement to benefits. There's no question about the amount of your benefits. There's no question other than when's the check coming. Okay. That's a wrap next week. I'm going to talk about the actual application and what you have to do to get the disability benefits you deserve. If you like this podcast, please like our page, leave a review or share it with your family or friends. Remember this podcast comes out weekly. So tune in next week for another episode of winning isn't easy.