How do I avoid making mistakes in my LTD claim?
According to the Council for Disability Awareness, one out of 4 people currently in their 20s will be disabled before they retire. Most people think “It will never happen to me,” but the possibility of sustaining an injury or contracting an illness that prevents you from working always exists.
The average period of absence from work when a person becomes disabled is 34.6 months or almost three years. Some people can rely on savings to pay for expenses for a few months, but few can afford to live for years without income. Disability insurance can provide much needed income during this time, but consumers should be aware of the benefits and restrictions of any policy they purchase.
Short term disability insurance (STD) pays a percentage of your salary if you become temporarily disabled.
Examples of conditions that short term disability insurance covers are pregnancy, back injuries, and digestive disorders. Benefits last between three and six months and have a “cap,” a maximum benefit per month, as well as a limit on the time you can receive benefits.
If you have been denied disability don’t give up! Contact a Disability lawyer at 512-454-4000 for a free consultation and get the benefits you deserve.
Long term disability insurance (LTD) typically pays between 50-60% of your salary and benefits continue until you return to work, or for the number of years stated in the policy.
Some insurance policies will cover an employee until they are 65. If the applicant has a short term plan, LTD will take effect when STD benefits run out; otherwise, there is a 3-6 month waiting period before benefits begin. Both STD and LTD policies are usually part of an employee benefit plan, but can be purchased by an individual. If the policy is paid for with pre-tax dollars, as in an employer based group plan, benefits will be subject to income tax. If the plan is purchased by an individual with after tax dollars, benefits will not be taxed.
While an LTD policy purchased by an individual is governed by state law, employer sponsored LTD plans are usually governed by ERISA (Employee Retirement Income Security Act), a federal law that was enacted to protect employee rights to benefits.
ERISA disputes can be drawn out as ERISA requires a claimant to exhaust all their administrative remedies before filing a federal lawsuit. ERISA claims are very different from typical insurance claim. These claims are governed by federal law, and disputes are litigated in federal court. Policy holders who have ERISA claims would be well-advised to hire an experienced, ERISA attorney, should they be denied.
Policy holders whose claim has been denied have 180 days to appeal.
In ERISA claims, the appeal process is crucial. It may be the only opportunity to ensure the record contains the evidence necessary to win the case in court. In most instances, the court record cannot be supplemented after the appeal process ends. After the appeal is filed, the insurer then has up to 90 days to consider the appeal. If an appeal is denied, the claimant’s only remaining option to pursue benefits is to file suit.
If you are approved for LTD benefits, the insurer will require you to file for Social Security Disability Income as well and offset any amount received from Social Security against the LTD payment.
Regardless of whether an LTD is under an employer sponsored plan or purchased individually, there are several things to watch out for in any disability claim.
Know the insurer’s precise definition of “disabled” or “partially disabled.”
Typically, “totally disabled” means unable to perform duties of your occupation due to illness or injury; “partially disabled” may provide benefits if you can no longer work at an occupation, but can work full or part-time at another job.
Understand the policy’s requirements and limitations.
Most employer-sponsored plans require the claimant to be working full-time at the onset of illness or injury. Full time usually means 30-35 hours per week; check the policy for its definition of “full time.” There may be exclusions for pre-existing diseases (illness or injury diagnosed and/or treated within a period before the policy benefits begin). Some LTD policies exclude particular accidents or diseases and many include a 24-month limitation on disabilities caused in part by drug abuse, alcoholism, mental or nervous conditions.
Know the time limits that apply for eligibility in the policy.
Most insurers have time limits on the waiting period, notice of claim, providing proof of loss, exhausting administrative remedies and filing suit. If possible, file the claim while you are still working. If you quit, the employer or insurer may claim you are no longer covered by the plan.
Work closely with your treating physicians and keep accurate records.
It is imperative to provide strong evidence for proof of disability. Get regular treatment from medical provider(s) experienced in your condition or illness and continue treatments while receiving benefits. Make sure medical providers are charting all symptoms and restrictions, including those not totally disabling by themselves. Each impairment has an impact on your disability, even those that existed before the disabling condition.
Be prepared to provide documentation to insurers throughout the claim process.
All phone conversations and other communications with the insurer should be documented in writing. Any documents and correspondence sent by mail should be sent certified mail, return receipt requested.
Most claimants will not need an attorney to file a LTD claim. Many claimants may never need an attorney’s assistance. If you are denied, however, you need an attorney. Do not be tempted to send a perfunctory appeal in the hope your benefits will be restored quickly. A denial in an ERISA case is a serious and complex matter. A claimant who has been denied should consult an experience ERISA attorney, like the attorneys at Bemis, Roach & Reed, before taking any further steps. Call 512-454-4000 for help today.
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