Where do you start when your doctor says you're disabled?

After your doctor has told you that you are disabled and you shouldn’t work, the first thing you have to do is notify your employer. Most long term disability insurance policies have a notice provision that requires you to notify your employer within 20 – 30 days of the date of your disability. This is a pretty quick turn around. If you have a short-term disability policy, most of those policies require that you submit your claim within 30 days of the date of your disability. By sending the notice of your claim to your employer, the insurance company should then turn right around and send you all of the claims forms they require you fill out to submit your claim. 

Many of these insurance companies will use this date of disability as a marker going forward to determine when several deadlines start and stop. If your doctor says you are disabled on June 15, then you should send your employer written notice within 30 days of that you are now disabled and are physically unable to do your job. This date of disability also determines when you will become eligible for long term disability.

A typical long term disability policy will include an “elimination period” which is a waiting period during which you are not entitled to benefits. This time period is usually 90-180 days. During that time period, your insurer expects you to file a short-term disability claim that will cover those 3-6 months. Your proof of claim documents is typically required to be filed within 90 days of the end of your elimination period. So if your elimination period is 180 days, and your policy requires proof of claim to be submitted within 90 days of that, then your proof of claim has to be submitted 270 days from the date of your disability. 

This is why the date of your disability is such an important date. It is also why you cannot wait around to fill out these forms and submit supporting documentation.

Once you submit your claim forms to the insurance company, it has 45 days to decide your claim. If necessary, the insurance company can extend this time period by two 30 day periods by informing you of the circumstances surrounding the extension request. 

What do you do when you ERISA Disability Claim is Denied?

After a significant amount of work filing all of your documents within the correct time frame, the insurance company has now denied your claim. What do you do now? 

First, you need to know that now you have 180 days from the time your claim was denied to file your appeal. If you do not file your appeal, then the insurance company will treat your claim as late. This result is similar to a statute of limitations that bars you from any further recovery in a typical case. In other words, if you fail to file your appeal, then you will lose all rights you might have to long term disability benefits under that policy. 

Second, you need more information. Clearly, the insurance company thought that your proof of claim was insufficient to prove that you are disabled and unable to work. But why? Why did the insurance company find your proof insufficient? You need to ask, and the company is required to tell you. Then, you need to fill in the gaps in the proof by getting more medical records, vocational records, educational records, etc. This is usually your only opportunity to submit new evidence in support of your case. 180 is about 6 months. While that may seem like an eternity, it is really a really short period of time to obtain and submit all of the required evidence you need to win your claim. 

When you file your appeal of the insurance company’s denial, the insurance company again has 45 days to decide the case. The insurance company can extend this limitation by an additional 45 days as long as it provides some justification to the claimant for the circumstances surrounding the delay. 

Why is an ERISA Disability Appeal so complicated?

If you file on the last day of every period (which we never recommend) and the insurance company takes every possible day to deny your claim, then, practically your claim process can last between 555 days and 645 days. That is between 18 and 22 months total from the date of your disability. During that time frame, there are a lot of deadlines and things that have to happen. A lot of people tell me that it is too complicated to keep track of. 

Quite frankly, ERISA is a federal statute and every federal statutory scheme I’ve ever seen has been complicated. ERISA claims are no different. The interesting thing is that ERISA was designed to protect people like you from employers but the protections are so complicated that the average person is usually at a disadvantage without an attorney helping them. One federal judge put it this way: 

“The Court also recognizes that ERISA claimants may not have the advantage of legal advice or favorable referrals before the administrative process is complete, placing such claimants at a distinct disadvantage if discovery is not permitted on judicial review. For ERISA claimants not able or aware enough to hire legal counsel before the administrative process is complete, they likely enter into judicial review facing a loaded deck–a deck loaded with the expert opinions of those hired by the plan administrator and, with the possible exception of a treating physician or two, lacking the opinions of vocational or medical experts hired by the claimant. Further, if the plan vests discretion with the plan administrator, as almost all do, such claimants also face the hurdle of a discretionary standard of review.”  – Abromitis v. CNA, Reporter, 261 F. Supp. 2d 388 (F. Dist. Ct. W.D.N.C 2003).

Discovery is normal in most lawsuits where many questions and documents are exchanged between parties. Discovery is almost never permitted on judicial review in ERISA disability cases and, by the time you get to federal court, you’ve already lost at least twice. If you didn’t submit enough information to address every issue justifying the insurance companies original denial, then you will have no chance in court.

How do you create an ERISA disability appeal?

1. Figure out why you were denied?

Your insurance company owes you a fiduciary duty. A fiduciary duty is an obligation to act in a certain way toward a certain group of people. In the ERISA disability context, the plan administrator owes a fiduciary duty to all of the plan beneficiaries. You are a plan beneficiary.

That means you can ask your plan administrator, or any person acting for your plan administrator, why he or she denied your claim and they have to answer you. The insurance company is obligated to detail why they denied your claim. You need to know this before you draft your appeal document so that you know what was important to the insurance company. Now you can correct any misunderstandings that the insurance company has about you. 

2. Figure out your deadlines.

Deadlines are crucial. If you miss a deadline, then your case is essentially over. You have to figure out when all of these deadlines are and put them on a calendar. We’ll leave it at that. 

3. Gather all of the right information.

If you don’t have the right information to present to the insurance company on your insurance denial appeal, you will lose. Just because you submit mounds of information to the insurance company doesn’t mean you submitted all of the right information. You have to cover all of your bases to make sure the insurance company will have a reason to change their denial. Beyond that, you have to make sure that the insurance company cannot find any reason to further deny the benefits you are entitled to. 

Because you did step one, you already know what is important to the insurance company and you can address it. You need to gather expert opinions and medical records that support your disability and challenge the reasons why the insurance company denied your claim. You need to address every single issue the insurance company cited in its denial or any later explanation of the denial. This requires a detailed review of the denial letters and a detailed review of all of your medical records.

Often, when a patient leaves the doctors office, what the doctor says and then writes down in the record are two different things.  More often, the electronic medical record system has prefilled spots that the doctor doesn’t check, or uncheck, that creates some confusion in what the doctor’s opinion truly is. If there are some inconsistencies in the medical records, you need to find them and then ask your doctor for a written clarification of that issue to present to the insurance company. 

4. Put it all together in a persuasive appeal. 

The last thing you have to do is write a persuasive and comprehensive appeal letter. Depending on the nature of your disability and the number of providers you’ve seen, your letter will vary in length. However, it is not unusual for an appeal letter to consist of 20-30 pages worth of information along with numerous exhibits. The appeal has to be structured in a way that covers all of the important issues and leaves no stone unturned. If you lose this insurance appeal, your only recourse is to file suit in federal district court and that court will usually review the insurance company’s decision for an abuse of discretion. When putting together your appeal, the content must be presented in a way that any objective observer would feel like the insurance company’s denial was an abuse of discretion. You may ask, “what does ‘abuse of discrection’ actually mean?” Well, the 4th Circuit Court of Appeals described it here:

Where an ERISA administrator rejects a claim to benefits on the strength of substantial evidence, careful and coherent reasoning, faithful adherence to the letter of ERISA and the language in the plan, and a fair and searching process, there can be no abuse of discretion . . . .

Evans v. Eaton Corp. Long Term Disability Plan, 514 F.3d 315, 325-26 (4th Cir. 2008). In other words, getting your insurance company’s denial reversed in court will be difficult, unless you present the case in the best possible light. 

What are the rules governing ERISA disability appeals?

Your disability insurance policy—if it was provided by your employer—is governed by the Employee Retirement Income Security Act or ERISA. Just like many other federal statutes, ERISA is a sophisticated and nuanced series of statutes that work together to create rules that govern your appeal including timelines that are required. The Department of Labor has been delegated authority to create administrative rules that also have to be followed. These rules complement the statutes and implement the legal framework created by them. The rules, however, cannot exceed the scope of the statutes and cannot contradict them. According to the Department of Labor

The primary responsibility of fiduciaries is to run the plan solely in the interest of participants and beneficiaries and for the exclusive purpose of providing benefits and paying plan expenses. . . . In addition, they must follow the terms of plan documents to the extent that the plan terms are consistent with ERISA. 

The ERISA statutes and regulations say what the insurance plans are allowed to say. 

With that said, your insurance plan sets the rules for your appeal. Some insurance plans will require that you exhaust one administrative appeal before you are allowed to sue in federal district court. Other insurance plans will require that you exhaust two administrative appeals before you are allowed to sue in federal district court. Still then, other plans will require one administrative appeal and allow one more voluntary appeal. 

The federal statutes require that the plan provide you with an administrative appeal. Once you exhaust that appeal, you are permitted to go to a federal judge to ask him or her to reverse the decision of the plan administrator. Those cases are governed by the ERISA statutes and regulations themselves, and also the federal rules of civil procedure. 

What happens if the insurance company denies my ERISA disability appeal?

If your insurance company denies your appeal, your only recourse is to file a lawsuit in federal district court. Most ERISA long-term disability plans place the discretion to provide benefits in the plan administrator. If that is so, then the federal district court will review the administrative record, which is typically filed under seal, for an abuse of discretion. This is a very high burden for you while it is a very low burden for the insurance company.

This is why it is so important to do so much leg work at the beginning of your administrative appeal. Overcoming this obstacle is often daunting, but not impossible. 

The ERISA disability appeal process is not fair

The process can be time-consuming. Unfortunately, all litigation takes time. And there is no rule that requires the insurance company to pay for damages like foreclosures, default on credit cards, repossessions, etc. This process is not fair. It can be long, drawn-out, and it certainly doesn’t seem fair. And indeed, in many cases, it is not. So many people find themselves in a position where they cannot work because of a disability. If you cannot work, then how do you produce income to live? How do you pay for your house, food, transportation? 

Because the process is arduous and long, many people find that a disability ruins their ability to live their full lives. The process is not fair, but the end result usually is. At Osterbind Law, our hope is that you understand the process and learn to trust it.

Let us help you navigate these sophisticated legal complexities so that, at the end of the day, you conquer the obstacles keeping you from living your best life. 

Let Us Help! 

Give us a call, send us an email, we will find a way to help you!.