Long Term Disability Applicants Must Apply for Social Security Disability Benefits
UNUM, the nation’s largest disability insurance company, routinely requires long-term disability applicants to apply for Social Security Disability benefits, regardless of whether the applicant is really entitled to Social Security benefits. Why do they do that? Because most long-term disability policies have a provision that allows them to reduce your long-term disability benefits by the amount of any Social Security disability benefits you may receive. If you do not apply, companies like UNUM take the position that you are getting Social Security benefits, and will automatically reduce your long-term disability benefits.
UNUM processed “almost 4000 disability claims in 2007, and paid out more than 4 Billion dollars in benefits.” Obviously, they want to do anything they can to reduce the payout.
Routinely requiring long-term disability applicant to apply for Social Security benefits, even though the insurance company knows they are not eligible, wastes valuable resources of the Social Security Administration, and helps create a large backlog in the processing of valid Social Security disability claims.
A federal jury in Boston found that requiring “able-bodied people to apply for Social Security could sometimes constitute fraud.” In an AARP bulletin by Mary Williams Walsh, it was noted that the lawsuit “was filed under a federal whistleblower statute that allows private citizens to sue on behalf of government programs if they believe they have evidence of fraud.” You can read Ms. Walsh’s article on how UNUM was found to be guilty of Social Security fraud here: http://bulletin.AARP.org/states/ny/articles/disability_insurer
UNUM, of course, plans to appeal! Maybe UNUM will get to experience, just like the UNUM policy holders who have their long-term disability claims wrongfully denied, how unfair the appeal process can be. I think the saying goes, “What’s good for the goose, is good for the gander.”
If you have any questions about applying for Social Security disability benefits and the interaction with your long-term disability claim, contact Florida based long-term disability/ERISA lawyer, Nancy Cavey.