Social Security Disability Insurance

How Disability Insurance Elimination Periods, Limitation Provisions, and Exclusions Can Impact Your Short-Term Disability Claim – The Seven Key Terms You Must Know

Have you purchased a Short-Term Disability insurance policy through your employer, or does your employer provide you with self-fund Short-Term Disability benefits? An accident, injury, or sickness can prevent you from working, and you will need time to recover. These benefits will allow you to recover and pay your bills.

There is no uniform Short-Term Disability policy or plan, but there are some common provisions that you should know that can impact your right to benefits and what you might be paid. It is crucial that you understand the details of your Short-Term Disability policy or plan before you submit your application.

What Are the Seven Key Terms You Need to Know That Can Impact Your Short-Term Disability Benefits?

One – Disability

You must prove that you are disabled, as that term is defined in the policy or plan. You generally have to prove that you can’t perform your own occupation due to an illness or medical condition.

Two – Occupation

Generally, but not always, you have to prove that you can’t perform your occupation as you perform it for your employer. If your disability continues and you become eligible for Long-Term Disability benefits, the definition of disability will change. It is not always the same definition!

Three – Elimination Period

An elimination period is a waiting period that you must meet before you are entitled to your Short-Term Disability benefits. It requires that you be disabled, as that term is defined in your policy or plan, and that you satisfy that period of time before you can collect your benefits. It can be as short as seven days, or as long as thirty days. Read the fine print to find out how long your elimination period might be.

Four – Exclusions

Exclusion come in many flavors. The Short-Term Disability policy or plan can exclude certain medical conditions like mental illnesses, subjective medical conditions, pre-existing conditions, or the payment of benefits because of a workplace injury.

Five – Limitations

Many disability polices or plans limit how long you are entitled to benefits for medical conditions like mental illness, subjective medical conditions like Migraines, pain, dizziness, or certain listed medical conditions like Fibromyalgia.

Six – Offsets

What the right hand gives, the left hand takes away. Your Short-Term Disability benefits might be reduced by sick pay, vacation pay, workers’ compensation benefits, or even Social Security Disability benefits or state disability benefits. This is often a dollar-for-dollar reduction, and will impact how much your Short-Term Disability payment might be.

Seven – Deadlines

Many policies or plans require that you give notice of your claim, and file your claim in a certain period of time, or your claim is barred. Missing deadlines, including appeal deadlines for a denied or terminated claim, can be fatal to your claims and your benefits.

What You Should Do Before You Stop Work

Before you stop work and apply for Short-Term Disability benefits, you owe it to yourself to consult with an experienced ERISA Short-Term Disability attorney. You should understand not only your Short-Term Disability policy or plan, but any Long-Term Disability policy or plan, so you don’t make a mistake with either claim. What you don’t know can hurt you! Remember, the definition of disability is generally different in a Long-Term Disability policy or plan, benefits can be different, coverage can be different, and you probably have to file an application for Long-Term Disability benefits.

Just because your Short-Term Disability benefits were approved, doesn’t mean your Long-Term Disability benefits will be paid.

If you are looking to apply for Short or Long-Term Disability benefits, contact Cavey Law today.

Should a Disability Carrier Explain Why It Disagrees with a Social Security Disability Decision Awarding Benefits?

Many disability insurance policies or plans require that a disability applicant apply for Social Security Disability benefits. This allows the disability carrier or plan to reduce benefits by the receipt of Social Security Disability benefits the applicant, or their minor dependents, receive.

Disability carriers want their money back, but then they will turn around and use the Social Security Decision to deny benefits.

What Do Courts Say about Using the Social Security Decision to Deny or Terminate Benefits?

The 6th Circuit commented on this issue and said that “an ERISA plan administrator’s failure to address the Social Security Administration’s finding that the claimant was totally disabled is a factor that can render the denial of a Long-Term Disability claim arbitrary and capricious.” Glenn v. Met Life, 461 F.3d 660 (6th Cir. 2006).

Federal courts review an ERISA claim using either an arbitrary and capricious, or a de novo standard of review, which can make the difference between the court reversing the denial or termination, or holding the same. Courts have ruled that if a plan administrator encourages an applicant to apply for Social Security Disability, wherein the applicant financially benefits from the receipt of Social Security, and then fails to explain why it’s taking a position different from the Social Security Administration on the question of disability, the reviewing court should weigh this in favor of finding that the decision was arbitrary and capricious.

But what exactly must a disability carrier say in the denial or termination letter?

Unfortunately, plan administrators do not have to expressly distinguish a favorable Social Security Decision in denying benefits. They will often:

• say they have considered the Social Security decision,
• attempt to distinguish the Social Security decision because Social Security considers age, which is not a factor in most
• ERISA disability policies,
• argue that you did not sign a release that would let them get your Social Security Disability file,
• argue that the determination was made by Social Security years before the carrier decided to discontinue the plaintiff’s benefits, and / or
• that the subsequent medical information supports the basis of denial.

That can be good enough for some courts. In other words, the failure to consider a Social Security decision award is to be weighed in favor of a finding that the decision was arbitrary and capricious, not that such a decision is arbitrary and capricious, per se.

Unfortunately, disability carriers can have it both ways. They can use these Social Security decisions to offset the benefits, and then ignore the findings of Social Security in determining that you are no longer disabled.