Disability Denials
Insurance Fraud/Insurance Bad Faith
Disability insurance provides an income for you and your dependents in the event you become disabled and are unable to work. Sadly, insurance companies often take advantage of those with disabilities. They will often stall claims and use unfair tactics to deny valid claims for disability benefits that you have paid for and deserve.
This type of conduct by insurance companies is really insurance fraud. Sometimes this conduct is also called insurance “bad faith.” Those who are the victim of insurance fraud or bad faith have the right to take legal action against their insurance company.
Examples of disability insurance fraud or bad faith include:
- Policy benefits are denied for invalid or fraudulent reasons.
- Payments to the policyholders are unreasonably delayed.
- Payments to the policyholder are terminated before the policyholder is able to return to work.
- The insurance company refuses to pay benefits claiming that the policyholder is able to do some other job which is not actually available, or for which the policyholder is ill-equipped.
Any action that unreasonably disrupts a policyholder’s right to receive proper benefits is illegal, and victims are entitled to seek compensation for their losses.
Common questions
- Who by law is considered to be “disabled” and entitled to disability benefits?
- My insurance company has offered to review my claim and may agree to pay it. Do I need to hire an attorney?
- What is an ERISA claim?
- Do I need a doctor to say I am disabled?
- Can I get disability benefits because of a mental condition or disorder?
- If I am approved for State Disability Income (SDI) or Social Security Disability Income (SSDI) benefits, am I automatically entitled to disability benefits under my private disability plan?
- Can I file a lawsuit if my disability claim has been unfairly denied?
Who by law is considered to be “disabled” and entitled to disability benefits?
It is NOT the diagnosis that makes someone disabled, but rather, the functional limitations that result from a medical condition.
California law says that a person is disabled if that person is unable to perform the material and substantial duties of their job with reasonable continuity and in the reasonable and customary way. In other words, if you are unable to perform the key parts of your job day after day, week after week on a reasonable and consistent basis, you are legally considered to be disabled.
My insurance company has offered to review my claim and may agree to pay it. Do I need to hire an attorney?
You may need a disability attorney even while your claim is being investigated by your insurance company or plan.
Insurance companies rely on the relative inexperience of claimants in order to manipulate the claims process to justify a denial. If you ask your insurance company or plan to review a denial, and you do not thoroughly and fully document your disability, you will simply give the insurance company an opportunity to rubber stamp their original denial and to do so in a way that deprives you of any valid basis to file a lawsuit.
If your disability benefits are part of an employee benefit plan given to you by your employer, it is even more critical that you immediately seek the help of an experienced and trusted attorney to represent you.
ERISA (Employee Retirement Income Security Act) governs employer disability plans
These employer-provided disability plans are governed by ERISA, a federal body of law which is complex and filled with legal pitfalls. For example, if your claim is denied, and you file a lawsuit, you may be prevented from presenting any evidence in that lawsuit to show that you are disabled—if you did not give that evidence to the insurance company during the claims investigation phase.
You need an attorney, trained and experienced in representing disability claimants, who can:
- Guide you through the process
- Collect and present evidence to the insurance company which establishes your disability
- Set the ground work for a lawsuit if the insurance company refuses to pay
What is an ERISA claim?
The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that was originally passed to handle issues related to pension fund administration. However, as it stands today, this law has a substantial impact on disability benefits provided by your employer.
If your disability plan is offered through your employer, your disability claim is most likely an ERISA claim, even if another company is handling your claim for your employer.
ERISA claims are complex and filled with legal pitfalls. Many attorneys do not understand this area of the law. Even attorneys who handle disability claims may lack the necessary experience to handle an ERISA claim.
At Teal Montgomery & Henderson, our disability lawyers have substantial experience helping people with their ERISA claims.
Do I need a doctor to say I am disabled?
Your doctor will be asked to provide information about you to your disability plan at regular intervals. Having your doctor’s support for your disability claim is essential. However, it is not enough to simply have your doctor say you are disabled. Your doctor must carefully document the physical and/or mental limitations that you have, and must provide medical evidence that you actually have a disabling condition.
Frequently, your doctor will be provided a form by your insurance company for this purpose. However, many doctors do not spend enough time to properly document your disability in a way that will support your claim.
You may need to hire an experienced disability attorney to assist you in communicating with your doctor to be sure that the medical reports he or she creates are accurate, descriptive, and legally sufficient to support your disability claim.
Can I get disability benefits because of a mental condition or disorder?
Yes, you can. However, many disability plans pay benefits for a much shorter period of time for a mental disability.
Your insurance company may attempt to improperly classify your condition as “mental” rather than “physical” simply to avoid paying disability benefits beyond this shorter time frame. In some instances, a physical condition may have a mental component, such as disabling pain accompanied by depression.
By working closely with your doctors, an experienced disability lawyer can make sure that you get the full benefits to which you are entitled under your disability policy.
If I am approved for State Disability Income (SDI) or Social Security Disability Income (SSDI) benefits, am I automatically entitled to disability benefits under my private disability plan?
Getting approved for SDI or SSDI does NOT automatically entitle you to disability benefits under your private plan. This often surprises people who rightly think that if they are found to be disabled by the government, they should be considered disabled by their own disability plan as well. Unfortunately, the law allows your private insurance plan to largely ignore any finding by SDI or SSDI.
Even so, you should apply for these government benefits if you can. Often your private disability plan requires you to do so. If you are denied benefits by your private disability plan, you will need to hire an experienced disability lawyer to help you.
Can I file a lawsuit if my disability claim has been unfairly denied?
There are certain steps you must take before you can sue. Most disability plans offer an “appeal” or “review” of denied claims. If your plan offers this, you generally must request an appeal before you are allowed to file a lawsuit. If you fail to do so, you may be barred from bringing a lawsuit that challenges the denial of your disability claim.
There are many legal pitfalls involved in this process. There are strict time limits for requesting an appeal. Also, you may be required to present during your appeal all the evidence you intend to rely on to prove your disability. If you do not, you may be prevented from using this evidence to support a later lawsuit.
This area of the law is complex and many attorneys do not understand or have experience in handling disability claims. If your disability claim was denied, you should hire an experienced and qualified disability attorney to represent you during your appeal. Your attorney greatly increases the chance that the insurance company will comply with the requirements of the policy, and if they do not, you will be in a position to bring a lawsuit to force the insurance company to honor its promise to you.
Call our Santa Rosa office at 707-525-1212 or Sacramento office at 916-448-1010, or toll free at 866-878-5267, for a free consultation. Or, submit your questions to us online.
