Disability Benefit Claims Law Blog : Disability Benefits Lawyer & Attorney : Dell & Schaefer : Disability Insurance Claims Law Blog

Karen Bloom was a partner and doctor specializing in physical medicine and rehabilitation at Rehabilitation Associates in Louisville, Kentucky. In 1999, she was diagnosed with Multiple Sclerosis (MS). In 2002, she decided to perform most of her work on an outpatient, rather than inpatient basis.

At the beginning of 2004, Dr. Bloom became unable to continue working full-time for Rehabilitation Associates because of her MS. She subsequently transitioned into part-time work and filed a claim in March 2004 for long-term disability benefits under the group policy provided by Hartford through her employer since 2002.

On September 21, 2004, Harford denied Dr. Bloom’s claim. In its denial, Hartford claimed that Dr. Bloom had a pre-existing condition, based on a date of disability of December 1, 2002. Through her attorney, Dr. Bloom appealed the denial. While admitting that she had a condition that existed prior to the effective date of the policy (October 2, 2002), Dr. Bloom’s position was that she became disabled after the 365-day elimination period had run, since she had claimed a date of disability in 2004, and thus was still entitled to coverage under the policy. Hartford’s position was that when Dr. Bloom transitioned from inpatient to outpatient work, she did so because of her MS, and thus had reduced hours in 2002 because of her condition.

Hartford contacted Dr. Bloom’s doctors, who agreed that she was disabled, but not until 2004. Despite the full support of her doctors, Hartford denied her appeal on July 8, 2005. In its denial letter it recited the same incorrect information it had relied upon in its previous denial. In response, Dr. Bloom filed suit in Federal Court. The federal court granted summary judgment in favor of Dr. Bloom after concluding that Hartford’s decision was arbitrary and capricious because it had relied on circumstantial evidence of her disability – work records and salary reports – rather than the medical records that existed between Hartford’s determined date of disability and Dr. Bloom’s claimed date of disability. Hartford appealed the trial court’s decision to the Sixth Circuit Court of Appeals.

On appeal, the decision to award benefits to Dr. Bloom was upheld. However, the court ordered that Hartford conduct the appropriate evaluation as to the true date of disability and to determine the amount of benefits owed to her.

From a practical standpoint, this case highlights two important points. One, it is vitally important to have an attorney involved in filing a claim as soon as possible. Had an attorney been involved at the outset at the filing of the claim, Dr. Bloom could perhaps have avoided leaving the door open for Hartford to deny her based on a pre-existing condition. Two, while Dr. Bloom won her case, because of the decision on appeal she is still subject to the whims of Hartford in picking a date of disability and determining the benefits that she is owed. Ultimately, she may have won the battle for entitlement to benefits, but lost the war, since Hartford still controls her date of disability and how much money she will receive under the disability policy.

See Bloom v. Hartford Ins. Co., No. 07-6374 (6th Cir. Jul. 21, 2009).

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Our client, a general surgeon for 25 years, was forced to stop performing surgery due to chronic degenerative cervical disc disease. Fortunately, our client had purchased a long-term disability policy from Paul Revere Insurance Company (acquired by Unum), during the early years of his career. The Unum long-term disability policy provides a monthly disability benefit in excess of $12,000 in the event our client is unable to perform the substantial and material duties of his occupation.

Disability insurance attorneys Dell & Schaefer were retained in order to advise our client of his contractual rights to long-term disability benefits and to assist with the submission of his application for benefits. Through a coordinated effort led by Attorney Gregory Dell, our client’s physicians, employer, and accountant provided all of the information necessary to submit the application for long-term disability benefits. Once the application was submitted, Unum requested to speak with our client, and that conference was attended by Attorney Gregory Dell and his client. Within 30 days of submitting the application for long-term disability benefits our client’s claim for long-term disability benefits was approved. Dell & Schaefer was able to assist our client in obtaining a quick approval for long- term disability benefits, as Dell & Schaefer has submitted disability applications on behalf of hundreds of disability claimants. Attorneys Dell & Schaefer continues to handle our client’s long-term disability claim on a monthly basis and Unum is required to direct all communications directly to our office.

Attorney Gregory Dell stated, “It is important to anticipate and be prepared to submit every relevant document the disability carrier may request, otherwise a claimant’s application process can take six months to a year to obtain a claim decision. After deposing the claim representatives and reviewing the internal claims handling manuals of every major long-term disability insurance company, my team of lawyers has a great understanding of exactly what the disability insurance companies need to see in order to approve a claim.”

Attorneys Dell & Schaefer represents disability claimants at all stages of their claim for long-term disability benefits. For additional information call 888-Say-Dell or visit www.diAttorney.com.
 

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Our client, a general dentist, purchased a long-term disability policy from Berkshire Life Insurance Company of America. The policy defined “disability” as the inability to perform the substantial and material duties of his regular occupation. Our client maintained a solo dental practice since 1995. After several years of practice, Dr. Q began experiencing back pain which made it difficult for him to bend over patients for long periods of time and perform most of his dental procedures. The pain continued to worsen as time went on. Dr. Q’s treating neurologist diagnosed Dr. Q with lumbar degenerative disk disease and associated radiculopathy. Eventually, the pain forced Dr. Q to put his practice up for sale and discontinue the practice of dentistry.

Knowing that the application process for long-term disability benefits could be complicated, Dr. Q contacted Dell and Schaefer to assist him in submitting his claim for long-term disability benefits. Attorneys Gregory Dell and Cesar Gavidia gathered all of the medical, financial, and occupational information necessary to submit Dr. Q’s claim for long-term disability benefits. Berkshire delayed payment of Dr. Q’s disability claim as Dr. Q. had began working in a new occupation as a dental professor. After field interviews with Berkshire and our client, Attorneys Dell & Schaefer were able to prove that the material duties necessary to be a professor are not similar to the material duties required to work as a solo general dentist. Once Berkshire accepted that Dr. Q could no longer practice dentistry on patients, they agreed to pay long-term disability to our clients. Berkshire agreed to pay benefits just prior to Attorneys Dell & Schaefer filing a lawsuit for their failure to pay. Attorneys Dell & Schaefer continue to maintain Dr. Q’s long-term disability claim with Berkshire on a monthly basis
 

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Our client was diagnosed with renal cell carcinoma of his left kidney in June of 2007. Under the provisions of his catastrophic illness policy, he was paid the lump sum benefit of $50,000 under the policy shortly thereafter. The terms of his policy stated that if he received no treatment for this cancer for at least a year, he could receive additional lump sum benefits if he developed another critical illness, such as a different type of cancer, a heart attack, or a stroke.

Over a year later, in September 2008, our client was diagnosed with renal cell carcinoma of his right kidney. His doctor stated that this diagnosis was a new, separate, primary cancer unrelated to his previous diagnosis of cancer in his left kidney. Accordingly, our client filed for benefits under his critical illness policy due to his new cancer diagnosis.

The insurance company denied coverage for the new diagnosis of cancer in his right kidney. The insurer argued that because our client attended follow-up visits and underwent scans to make sure his left kidney cancer had not recurred following surgery, he was ineligible for additional benefits for renal cell carcinoma under the policy.

Attorneys Dell & Schaefer obtained a copy of the insurance company’s claim file and all of our client’s medical records. An extensive Appeal letter was prepared and the insurance company was given 30 days to reverse their previous denial or a lawsuit would be filed.

After reviewing the Appeal letter prepared by Attorneys Gregory Dell and Robert Kerr, the insurance company reversed their prior denial and agreed to pay the $50,000 policy benefit to our client under a confidential settlement. Additionally, the insurance company agreed to keep the policy in force for any future additional catastrophic illnesses except renal cell carcinoma of the kidneys.

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Our client was a Territory Sales Specialist for a major medical supply company, responsible for sales spanning a large geographic area with incredibly high sales quotas. Physical requirements of her occupation required here to travel extensively, drive long distances on a day to day basis, carry samples and products that could weigh in excess of thirty pounds, and give presentations and demonstrations. Her job required her to have a strong understanding of all aspects of her company’s products, and keep current with all advancements in the field of medicine as it relates to her company’s products.

Our client had suffered from neck and back pain since she was involved in a car accident several years ago. Throughout the years she sought treatment, but remained focused on her career, pushing aside the discomfort she was experiencing. However, by 2008 the pain had become unbearable, and it was having a severe impact on her ability to perform her occupation. An MRI of her cervical spine revealed multiple disc bulges and an extrusion at the C6-7 level with evidence of narrowing and compression of the spinal cord, which caused radiating pain to her arms.

Our client filed a claim for disability benefits under her company’s long term disability policy with Prudential. During this time she was released from employment and no longer had adequate health insurance to treat regularly to treat her condition properly. At first Prudential provided benefits under reservation of rights pending more medical information. She attempted to keep up with all of Prudential’s requests, but soon became overwhelmed. In September of 2008, Prudential terminated her benefits, citing the “Proof of Claim” and “Appropriate Care” provisions contained in the policy.

No longer able to deal with the constant harassment from Prudential, she contacted the law firm of Attorneys Dell and Schaefer. Dell and Schaefer immediately contacted Prudential, requested all claim information and requested Prudential no longer contact our client. Through no fault of her own, due to her lack of adequate health insurance to cover the cost of treatments, a review of the medical records made it apparent that the course of treatment our client had been receiving would make it difficult to satisfy the “Proof of Claim” and “Appropriate Care” provisions under the policy. Armed with the limited information available, Dell and Schaefer filed an Appeal with Prudential.

Based upon the information presented and the arguments for disability benefits contained in the appeal, Prudential reversed their prior denial of long-term disability benefits and agreed to conduct further review for disability benefits for 2009. Steven Jessup, of Attorneys Dell & Schaefer was the lead attorney on the file and continues to manage the claim on a monthly basis.
 

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In 1989, The US Supreme Court declared that if ERISA plans contain language giving plan fiduciaries discretion to interpret the terms of the plans and to make benefit determinations, courts will generally yield to that discretion. As a result of this discretion, insurance companies were able to deny claims and there was very little that courts could do to reverse the decision of an insurance company. Throughout the past several years, many states have passed laws to ban discretionary clauses and the insurance industry has been fighting to keep the discretionary clauses. 

On March 18, 2009, the Sixth Circuit Court of Appeals affirmed a Michigan Statute promulgated in June 2007, which prohibited any insurance company or other entity from “issuing, advertising, or delivering to any person in the state of Michigan, including an employee benefit plan subject to ERISA, an underwritten policy or certificate that includes a discretionary clause.” See American Council of Life Insurers v. Ross, 558 F.3d 600( 6^th Cir. 2009).   Under the law in Michigan, disability insurance companies can no longer invest the plan administrator with unfettered discretionary authority to determine eligibility or to construe ambiguous terms of a plan. 

The elimination of the discretionary clause will entitle all disability claimants a De Novo review of their claim in Federal Court if their claim is denied by the disability insurance company. The elimination of discretionary clauses is a heavily litigated issue throughout the country and there are eight states (CA, CO, IL, ME, MI, MO, NJ, SD)   that have either ruled or have drafted laws that discretionary clauses are invalid. Utah has sought to significantly limit the impact of discretionary language.

Attorneys Dell & Schaefer are involved on a daily basis with challenging the validity of discretionary clauses in long-term disability policies.   We are continually lobbying Congress for a bill that will eliminate discretionary clauses in all employee benefit disability plans.

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More than sixteen years ago, shortly after starting his dental practice, Dr. Johnson (name has been changed for privacy purposes) bought a disability insurance policy to protect his income in case of an illness or injury that prevented him from completely or partially working in his chosen profession. Over the years, Dr. Johnson’s practice grew substantially and so did his annual income. As such, Dr. Johnson’s insurance carrier made several offers to increase his monthly disability benefit in case of total disability. Each time, Dr. Johnson gladly accepted the increase in premium payments for the added protection.

Dr. Johnson’s dental practice consisted mainly of bridge and crown work, root canals, extractions, and general dentistry. Unfortunately, several years ago, Dr. Johnson began to experience stiffness and pain that radiated through his right arm and shoulder. At first, he dismissed the pain as overuse and applied home remedies. However, over time the pain became more severe, more frequent, and lingering longer. Dr. Johnson sought treatment from a rheumatologist and was subsequently diagnosed with osteoarthritis. Dr. Johnson continued to treat patients. 

However, his pain, now excruciating after only two hours of use, forced him to change his practice significantly. He had to forego crown and bridge work, root canals, and more difficult extractions.

After almost a year of cutting back, Dr. Johnson read the long-term disability income policy he bought so many years earlier. Dr. Johnson’s policy read,

“You are considered Totally Disabled, if due to injury or illness, you are unable to perform the Substantial and Material Duties of your Regular Occupation and are under the Regular care of a Physician. . . . You are considered Residually (Partially) Disabled if due to injury or illness, you are unable to perform one of the material and substantial duties of your regular occupation, have at least a 20% loss of earned income, and are under the regular care of a physician.” 

Dr. Johnson decided to apply for disability income benefits.  Shortly after he mailed his application for disability benefits to his disability insurance company, Dr. Johnson received a telephone call from the disability company. The claims analyst asked Dr. Johnson several questions regarding his condition and his continued treatment of patients. The insurance company requested additional documentation and indicated that their investigation might take several weeks. However, after only two and a half weeks, the insurance carrier sent Dr. Johnson a correspondence that read “We conducted a thorough investigation into your claim for disability income benefits and we are pleased to inform you that you are eligible to receive benefits under the terms of your disability income contract. As you are still working in your profession, you will receive partial disability benefits as long as you remain disabled and continue to suffer at least a 20% loss of earned monthly income.” Dr. Johnson was pleased by this news. Many of his colleagues had difficult experiences with their disability insurance companies when attempting to collect from their disability income policies. 

Dr. Johnson was required to provide the disability insurance company with monthly profit and loss statements. During several months he received no benefit, as in those months he did not sustain at least a 20% loss of earned income. Dr. Johnson subsequently hired another dentist to perform procedures that he could no longer safely perform. This resulted in fewer and fewer months in which Dr. Johnson was “eligible” to collect his disability income benefit. After two years of qualifying for disability benefits, Dr. Johnson’s disability insurance company approached him to request a buy-out of his disability income policy. The disability company offered him $100,000.00 for the surrender of his disability policy. Dr. Johnson found this offer fair as in most months he was collecting little or nothing in partial disability benefits. However, before signing the agreement, Dr. Johnson wanted an attorney to review the disability buyout agreement and advise him of his rights. That is when Dr. Johnson contacted Attorneys Dell & Schaefer.

After speaking with Dr. Johnson and reading his contract it became clear to Attorneys Dell & Schaefer that not only was the offer unconscionably low but that Dr. Johnson had fallen victim to what seems to be a common practice among many insurance carriers - advising an individual that he is partially disabled when under the terms of his contract he is totally disabled. When we explained our concerns to Dr. Johnson he was hesitant and stated, “I am still working. I’m not totally disabled.” Like so many others, Dr. Johnson was convinced that total disability meant the complete inability to engage in his occupation. This erroneous assumption was given credence by the insurance carrier’s simple statement, “As you are still working in your profession you will receive partial disbility benefits...”  Dr. Johnson’s incorrect interpretation of his disability policy was created by two years of similar statements from his disability insurance company and eventually a seemingly gracious offer to buyout an all but useless policy for the sum of $100,000.00. 

It was reasonable for Dr. Johnson to arrive at such a conclusion. Social Security provides disability benefits to individuals for the complete inability to engage in any gainful occupation, not to mention the fact that Dr. Johnson’s policy does provide for partial disability benefits. However, this was not a Social Security claim, but rather a long-term disability policy. As we explained to Dr. Johnson, under the terms of his disability policy, total disability means the inability to perform the “substantial and material” duties of his occupation as they were just prior to his illness. Dr. Johnson’s substantial and material duties as a dentist prior to his disability consisted of root canals, extractions, simple and complex, consultations, and many cosmetic procedures. However, Dr. Johnson’s post-disability duties consisted mainly of some simple extractions and consultations. He was simply unable to perform all of the substantial and material duties of his occupation and thus was totally disabled under the terms of his long-term disability policy. Most significantly, Dr. Johnson had been paying premiums for over a decade for this protection.

After our initial consultation, Dr. Johnson turned down the disability insurance company’s offer to buy out his policy and retained Attorney’s Dell & Schaefer to assert his rights to total disability income benefits under the terms of his contract. Attorney’s Dell & Schaefer were able to secure Dr. Johnson total disability benefits, un-paid back benefits totaling almost $200,000.00, interest on his back benefits, and attorney fees. Ultimately, we negotiated a lump-sum buyout of Dr. Johnson’s long-term disability policy, one well in excess of the meager $100,000.00 the disability insurance company once attempted to settle his claim for.

Unfortunately, Dr. Johnson’s story is not uncommon. Many disability policies provide that an individual with a partial disability will only be paid through the age of 65, while an individual on total disability benefits will be paid for the duration of the individual’s life. Moreover, partial disability benefits are based on the percentage of earned income lost. Thus, unlike total disability benefits, if the individual does not suffer a loss, benefits are not paid. Finally, in the event of a buyout of a long-term disability policy, an individual would be more apt to surrender his or her contract for less if the individual’s disability were deemed partial rather than total. Insurance companies save themselves millions of dollars each year by such practices. They lead claimants to believe that because they are working, they are only entitled to partial disability benefits and then entice them to surrender their contracts and all rights to their claim, for an unreasonably low price. Fortunately, for Dr. Johnson, he was able to realize the disability insurance company’s deception prior to surrendering his rights.

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