Navigating the disability benefit claim process can be overwhelming, and the challenges don’t necessarily end once your initial disability claim is approved. Understanding when and why an insurer can terminate your disability benefits can be confusing. Learning the most common ways an insurance company can use to terminate your claim, can make this process easier.
When and How an Insurer Could Terminate Disability Benefits
1. Can Your Disability Benefits Be Taken Away?
The short answer is “Yes.” An approval of long-term or short-term disability benefits is not a guarantee of continued payments under the policy. Disability insurers can use a multitude of reasons to terminate disability benefits after approval. That is why it is so important to read your disability policy, and timely answer any request for information the insurer may send; including, updated medical records, claim forms, and any other requests that align with your policy.
2. How Insurers Decide to Terminate Your Disability Benefits?
Insurers periodically review every claim for disability benefits in order to determine if the claimant continues to meet the definition of disability under the policy. These reviews may occur on a monthly, semi-monthly, or yearly basis. During their review, the insurer may request updated medical records, updated claim forms, a status of your social security disability claim (if applicable), or any other documents required under the policy. Providing the insurer with as much information as possible that establishes your continued disability will help the insurance company review your claim and provide enough evidence to receive continued benefits. However, sometimes no matter what you provide to the insurance company, they may still terminate your disability benefits. That is why it is so important to continue to receive medical treatment and document your symptoms.
Unlike the Social Security Administration, which is prohibited by statute from terminating Social Security disability benefits in the absence of medical improvement, disability insurance companies operate under no similar constraint. However, courts may consider the previous payment of benefits in deciding whether the denial of benefits was reasonable. Recently, in Roehr v. Sun Life Assur. Co. of Canada, the Eighth Circuit Court of Appeals overturned a denial of benefits to an anesthesiologist suffering from tremors, ruling that Sun Life abused its discretion when it terminated the doctor’s claim after 10 years of payments without first establishing that his condition had improved. Roehr v. Sun Life Assur. Co. of Canada, 21 F.4th 519 (8th Cir. 2021). The Roehr decision relied heavily on an earlier Eighth Circuit case, McOsker v. Paul Revere Life Insurance Company, which held that although an insurer is not bound by its initial decision to approve benefits, insurers must significantly consider the previous decision when reviewing a claimant’s continued disability. 279 F.3d 586, 589 (8th Cir. 2002); see also Leger v. Tribune Company Long Term Disability Benefit Plan, 557 F.3d 823, 833 (7th Cir. 2009) (“[T]he previous payment of benefits is just one ‘circumstance,’ i.e., factor, to be considered in the court’s review process; it does not create a presumptive burden for the plan to overcome.”).
The biggest take away for claimants from the rulings in the Appellate Court is to keep documenting the signs and symptoms of your ongoing disability, even after an approval of benefits have been obtained.
3. Reasons for Terminating Long-Term Disability Insurance Payments
Insurance companies can use a variety of reasons to stop payment of your disability benefits Some of the most common reasons for termination of disability benefits include:
1. Benefit Limitations for certain conditions.
Most policies impose limits on how long the insurer will have to pay benefits for certain conditions, including mental, nervous or psychological conditions, alcohol or drug addiction, or conditions with self-reported symptoms such as chronic fatigue syndrome or migraines. These limitations can be as short as 24 months or as long as 5 years, depending on your policy. Check your policy to verify how long the insurer will pay disability benefits for certain conditions.
2. Not receiving proper medical care or treatment for your disabling condition.
Insurers can stop your short-term or long-term disability payments if you fail to receive regular medical treatments as required under the policy. In many circumstances the insurer will send forms for your physician to complete certifying your disability and inability to return to work.
3. Conducting medical reviews of your claim.
Insurers typically have nurses and physicians on staff that will review your medical records to determine if your disabling conditions continues to be supported by “objective” medical evidence. It is also common for the insurer to send your file out for an “independent” peer review. During this process the insurer will send out your medical file to a service that employs medical doctors or nurses to review the records and provide an opinion on your physical capacity to return to work. The physicians or nurses reviewing your file, rely on the medical records and updated claim forms to determine your capacity to return to work. Therefore, it is very important to provide the insurer with any medical records and documentation that continues to support your disabling condition.
Depending on your policy, the insurer may also be able to send you for an “independent medical examination.” The insurer will find a doctor (ideally someone that is familiar with your disabling condition) and send you for a medical examination, at the insurers expense. The information contained in the medical report form this physician is reviewed in order to determine if you continue to meet the definition of disability under your policy.
4. Participating in activities that are contrary to continued disability.
Insurers can conduct surveillance of your activities in order to determine if you continue to meet the definition of disability under your policy. Surveillance can include monitoring your social media accounts looking for posts of vacations, volunteer efforts, or other activities that are contrary to your stated disability. While we recommend limiting or canceling your social media accounts, or at the very least setting the highest possible security settings on your accounts. Surveillance can also include sending out a private investigator to record your activities. This may include taking pictures or video of you driving a car, gardening, or carrying groceries. Depending on your disabling condition, the insurer may use the private investigators report as evidence that you have the capacity to return to work.
5. Reaching the end of the “own occupation” definition of disability.
Many polices definition of disability will change after, generally, 24 months of benefits. When your claim is initially approved, the insurer has agreed that you can not work in your “own” or “regular” occupation. However, after the 24-month period the definition of disability may change from “own” occupation to “any” occupation. Therefore, if the insurer determines that you are able to return to work in a different occupation that aligns with your education, background, and a percentage of your previous income, the insurer can terminate your benefits. Check your policy to determine how long the “own” occupation period definition of disability applies.
What to Do if Your Disability Benefits Are Terminated and Your Condition Has Not Improved?
Act fast. Many disability insurance policies include procedures that a claimant must follow to appeal a denial or termination of disability benefits. If your policy is governed by the Employment Retirement Income Security Act of 1974 (ERISA), you may be limited to filing an administrative appeal with the insurance company within 180-days of the date on the denial letter. Many policies will require the claimant file an administrative appeal prior to filing suit in Federal Court.
A consultation with an experience an ERISA or disability attorney at on our team can help you navigate this very complex process. We can help you understand the reasons the insurer has terminated your short-term or long-term disability claim, and your options for filing an appeal.
Navigating the disability benefit claim process can be overwhelming and doesn’t end with an approval of your benefits. Understanding the best way to navigate the process and protect yourself in case of a denial can help.