Disability insurance benefits can protect you and your family from financial hardship by insuring a portion of your income for so long as you remain out of work due to an injury or illness. The disability benefits process can be complicated, particularly if your claim is denied or your benefits are prematurely terminated, so it is essential that you understand your rights and obligations in order to maintain the viability of your claim.
What Is a Disability Benefits Appeal?
If your disability insurance benefits claim is denied or terminated, you will likely need to submit an appeal to the insurance company and/or plan administrator. The appeal must be submitted before you can file a lawsuit in court, and there are strict timing deadlines that apply.
If you work for a private-sector employer that offers disability benefits as part of your compensation package, your benefits are likely governed by the federal benefits law called the Employee Retirement Income Security Act of 1974 (ERISA). On the other hand, if you work for a government or church-related /entity, your benefits are most likely exempted from ERISA coverage. If you purchased your own insurance, your benefits are governed by state bad faith insurance laws.
Because most people receive disability insurance through a private sector employer, most disability insurance claims are subject to ERISA. The United States Department of Labor (DOL) oversees the ERISA benefits claims process. The DOL has passed strict regulations governing the application process and establishing an internal appeal procedure for claims that are denied or later terminated. See 29 C.F.R. § 2560.503-1. The DOL claims regulations provide the minimum standards and timeframes for processing benefit claims, so you should also check the terms of your specific plan.
If you purchased your own disability insurance, or your employer is a church or government organization exempt from ERISA coverage, the disability plan administrator and/or insurer are not bound by the DOL claims regulations, but will very often still follow similar procedures.
The DOL claims regulations also provide different timeframes, deadlines, and procedures for different types of benefit appeals. If your claim involves another kind of benefit (such as a retirement plan, life insurance, or healthcare benefits), then you should check the regulations and your plan to determine the proper deadlines and procedures for your appeal.
If you apply for disability insurance benefits – including short-term disability (STD) and long-term disability (LTD) benefits – and your claim is denied or later terminated, you will ordinarily have at least 180 calendar days from the date you receive the denial notice to submit your internal appeal. See 29 C.F.R. § 2560.503-1(h)(3)(i) & (4).
How Long Does It Take to Get a Decision on Your Disability Benefits Appeal?
The DOL claims regulations govern not only how long you have to submit your disability benefits appeal, but also how long the insurance company and/or plan administrator has to render a decision on your appeal. After the insurer and/or administrator receives your appeal, a decision must be rendered within 45 calendar days. One additional 45 day extension can be requested if “special circumstances” exist. See 29 C.F.R. § 2560.503-1(i)(3)(i). That means you should typically receive a decision on your appeal within 90 days.
What Can You Do to Optimize Your Chances of Success on Appeal?
Every disability benefits claim involves different plan terms, and distinct medical and vocational factors that need to be considered. Nonetheless, there are certain things to always keep in mind when preparing a disability benefits appeal. First, you or your legal representative should begin by requesting a copy of the administrator’s complete claim file, along with a complete copy of the operative plan documents. Second, you must make sure that you submit all the medical, diagnostic, and other treatment records that have not already been produced and/or included in the claim file. This is absolutely critical because, if your appeal is denied, most jurisdictions will not permit you to introduce any new evidence once you get into court.
It is also important to remember that a diagnosis in and of itself does not constitute a disability. Relatedly, the lack of a precise diagnosis while you are still undergoing a medical work-up does not mean your constellation of symptoms is not severe enough to prevent you from working. As a result, you must provide the administrator with documentation outlining your specific restrictions and limitations, which can then be compared to your occupational duties and/or any other relevant vocational standard in your plan. That evidence can be provided through your doctors’ completion of functional capacity questionnaires and/or objective evaluations such as a functional capacity evaluation (FCE) or a neurocognitive assessment.
What Happens if You Are Asked to Provide More Information During the Appeal Process?
While your appeal is being reviewed, the insurance company and/or administrator may request supplemental evidence, or send you questions to answer about your medical condition, treatment history, and occupational duties. They may also reach out to your treating providers to discuss your condition. It is essential that you respond to these requests promptly, and to the extent possible, in writing.
In addition, new regulations passed by the DOL require that you be provided with any adverse evidence collected by the plan administrator during the appeal review process, and mandate that you have the opportunity to respond to such before a final decision is made. See 29 C.F.R. § 2560.503-1(h)(4)(i) & (ii). It is imperative that you and your doctors rebut this evidence as thoroughly as possible, as it could be your last opportunity to challenge the benefits determination outside of court. You also do not want to allow the insurance company or its doctors to get the last word. During this rebuttal period, the standard timeframes, and deadlines for deciding disability benefit appeals are paused.
What Happens if You Lose Your Disability Insurance Benefits Appeal?
If your disability benefits appeal is denied, you can pursue additional avenues of relief. Your plan may provide a second mandatory or voluntary level of appeal, which may be governed by different deadlines. You must check your specific plan, along with the appeal denial letter, to confirm whether additional internal levels of appeal are available to you.
Once you have exhausted your internal appeals, you can sue the insurance company and/or plan administrator in court. If your disability benefits claim is subject to ERISA, then your case would typically be brought in federal court as a claim for benefits due under ERISA § 502(a)(1)(B) (29 U.S.C. § 1132(a)(1)(B)). If your claim is not governed by ERISA – either because you work for a church or government entity, or you bought the insurance on your own – you can bring a breach of contract claim. There may also be damages available for insurance bad faith.
Do You Need an Attorney to Submit a Disability Insurance Benefits Appeal?
While you do not need legal counsel to pursue an internal appeal of your disability benefits claim denial, hiring the right benefits attorney to represent you will maximize your chances of success. Experienced legal counsel can assist you in getting your benefits reinstated, so you hopefully never need to go to court. The disability benefits attorneys at DeBofsky Law, Ltd. can advise you through every step of the appeal process, educate you on the specific terms of your plan, and familiarize you with the business practices of the large insurance companies. That way, you can protect your finances and focus on improving your health.