By A. Christopher Wieber, Esq. (Law Office of Mark Scherzer)
Are you approved and receiving long term disability benefits? Wondering what will happen to the payment of your benefits? Are you in the middle of a periodic monthly or annual claim update and concerned that you won’t be able to meet the insurance company’s deadline for providing an Attending Physician Statement (or APS) form, or your own Claimant’s Claim Update or Activities of Daily Living Questionnaire?
The coronavirus (Covid-19) pandemic is likely to have disruptive effects across the entire United States economy, including disability insurance carriers. Many of the major disability insurance companies have posted updates and resource centers on their websites, which should be consulted to see what particular steps your own LTD insurance carrier may be taking to manage their disability claims during this process:
Based on my experience and what the insurance companies are reporting, I would expect the following:
Disability Benefit Claim Payments: Major insurance companies are going to have significant financial reserves, as well as reinsurance backup (secondary insurers to provide an additional level of insurance to manage unexpected/excessive claim liability). Consequently, it seems likely that from a financial perspective, there should be no disruption of disability benefit payments on established claims — at least for the short-term. Since most companies rely on automated payment systems, it also seems unlikely that there will be a disruption in paying most disability benefits. On their websites, insurers are promising to do their best to support their customers and maintain continuous operations and, hopefully, with remote-work set-ups in place, this should be possible — particularly with benefit payments and other highly automated processes.
Disability Claim Processing and Updates: As indicated above, insurers are promising to do their best to keep their disability claim operations functioning smoothly. While I hope that most disability claim operations will continue to occur in a relatively routine “normal” manner, aspects of disability claim administration that are dependent upon active participation by personnel will depend upon how particular claim units are affected by the spreading infection and how agile the companies are in reallocating personnel resources.
What if I Receive Claim Update Forms, but Won’t be Able to Complete them in Time? First, take a deep breath. Insurance claim forms are often sent out in an automated fashion. Consequently, the forms may have been “in the works” even before your long term disability insurance carrier had any idea of the disruptions that would be caused by the coronavirus pandemic. Many disability claimants will find that their physician’s offices are closed, or only dealing with “emergency” situations. Dealing with disability claim paperwork is unlikely to qualify as such an emergency. In addition, the claimant may have problems completing his or her own claim update forms — if restricted at home, the claimant may not have access to a fax or scanning capability, and/or may not have sufficient computer resources/skills to handle the claim paperwork in a digital fashion. If you have received forms recently and have a pending deadline that it will be impossible for you to meet, it would make sense to contact your disability insurance claim representative and request an extension to complete all forms. Since the current crisis — and the duration of the ensuing restrictions — remains unknown, it makes most sense to request a significant extension (60 to 90 days) to avoid having to make repeated requests. If you are unable to reach your disability claim representative by telephone, you may want to attempt to do so by email, and/or by the online claim account that many insurer’s provide to permit direct communications with their claimants. If you have the capacity to do so, you can also communicate via the fax number generally provided on letters and claim forms. If you require legal assistance completing disability claim forms or requesting an extension to complete your forms, our attorneys can help.
What if my Long Term Disability Insurance Company is in the Middle of an Active Investigation of my Claim? At the time of increasing disruptions due to the coronavirus pandemic, some disability claimants may have been in the middle of an active claim investigation by their insurance company. For example, there may be outstanding request for the claimant (or the claimant’s treating physician) to respond to an independent medical examination (or IME), a functional capacity evaluation (or FCE) or a neuropsychological evaluation (or NPE). Or the claimant may be notified of a failure on the part of a treating physician to respond to the disability insurance company’s request for an IME, FCE or NPE response, medical records, or a claim form. When a disability insurance company has “escalated” its handling of a claim by conducting an IME, FCE or NPE, this typically means the insurer is questioning the validity of the claim. It may be very important to evaluate any such report and to prepare a legal and/or medical response. However, a claimant may find it impossible during the current coronavirus restrictions to get their treating physicians to respond in a timely manner. As noted above, if this is the case, the claimant should promptly request a significant extension of time to allow for a response.
If the insurer is requesting a claimant to meet with a field representative in the individual’s home, or to attend an IME, FCE, or NPE, there may be good reasons to postpone the appointment until such time as the pandemic crisis has been resolved. Many individuals with disability claims may be at particularly high risk of severe disease or death in the event of exposure to COVID-19, and have been told by city, state, or federal authorities to isolate at home. Even if they are not particularly vulnerable, other individuals with whom they live may be vulnerable. In-person meetings — particularly those involving physical contact where social distance may be impossible to maintain, may therefore be inadvisable. In one recent incident, we suggested that a field representative’s interview be arranged by video conference. In such cases, we believe the claimant who has to undertake the risk would be on solid ground in requesting a reasonable postponement, an alternative method of conducting the evaluation (via remote video conference, telephone call, etc.), and/or conditional approval of the disability claim. If you require legal assistance responding to a field office visit or an IME, FCE or NPE, our attorneys can help.
What if my Long Term Disability Claim was Recently Denied or Terminated, and I have an Appeal Deadline Approaching? If your short or long term disability claim was terminated, and you are still within the time period for filing an appeal, now may be an important time to request a significant extension of time to prepare your appeal and to seek out legal assistance. An ERISA appeal can be very complex, and require the development of medical, vocational, and corroborative evidence (see our ERISA Appeal Tips). It may be impossible to efficiently and comprehensively do so with the current coronavirus restrictions that have been implemented throughout the country. If you are currently facing an appeal deadline, you should consider promptly requesting a significant extension of time (as noted above, at least 60 to 90 days to avoid having to make repeated requests), to allow additional time to work with your doctors and consultants to develop a comprehensive appeal. If you require legal assistance to prepare your ERISA disability appeal, please contact our office.
What if I am Currently Receiving Disability Benefits but My Former Employer Goes out of Business? Or What if I Lose my Employee-on-Leave Status because of Lay-offs? If you are currently receiving disability benefits through your employer’s short or long-term disability plan (or already on a disability leave), and if your employer’s disability plan is insured by an insurance company, in most cases the intervening bankruptcy or closing of the employer’s business (or a change in your official employment status) will not negatively affect your entitlement to disability benefits. While the closing of the business is likely to result in the termination of the short or long term disability policy issued to the employer, your claim began while the insurance was still in force and effect and, therefore, your claim started while the insurance still covered you. The short or long-term disability insurance company should still continue to be liable for your claim as long as you otherwise satisfy the definition of disability, up to the applicable maximum benefit period.
In the vast majority of cases, long-term disability benefits are insured. However, some are self-funded and many short-term disability plans are self-funded (self-funded short-term disability plans are often referred to as “salary continuation plans”). Self-funded means that benefits are not insured, but are paid directly by the employer out of its own funds (see our discussion of ERISA self-funded plans). In such self-funded plans, the effect of the employer closing its business (or laying off the employee while on disability leave) may be the loss of the benefits. However, this is not inevitable. If you find that your short or long-term disability benefits are being terminated because of the closure of your employer’s business or because your job was eliminated while you were on a disability leave, this is an important time to talk to lawyer, as you may still have enforceable rights regarding the loss of these benefits — whether under ERISA, employment law, or bankruptcy law. If you require legal assistance to respond to the termination of your disability benefits, please contact our attorneys.
Please Note: It is always important to clearly document any agreement with your insurance company to extend a deadline. A short letter or email, confirming the extension and the new deadline, should always be sent in to the insurer. Keep copies of the correspondence and consider sending via fax, certified mail or some other method where delivery can be readily confirmed. And also consider following up by telephone to confirm receipt and that the new deadline has been logged in to your claim file.
Chris Wieber is a New York-based long term disability claim lawyer with nearly 30 years’ experience handling claims arising under employer-sponsored short and long term disability plans governed by ERISA (the Employee Retirement Income Security Act).