Employer-provided long-term disability (LTD) policies are governed by a federal law known as ERISA, the Employee Retirement Income Security Act. Under ERISA, disability applications are evaluated by claims administrators usually working for your insurance company. Due to the inherent conflict of interest, claims administrators routinely deny deserving claims even where the evidence of disability appears to be clear.
Claims administrators deny disability applications for an endless number of reasons, both legitimate and illegitimate. Understanding why claims are denied will help you present the best case possible at the administrative level and in federal court. Here are some of the most common reasons for denial.
Insufficient Medical Evidence
Having supportive medical records, including the following, is key to winning LTD benefits.
Regular medical treatment. It's nearly impossible to prevail in a long-term disability case without going for regular medical treatment. Your insurer will expect you to make visits to your primary care physician and appropriate specialists at regular intervals. If you suffer from a psychiatric condition such as depression or anxiety, you should be seeing a mental health provider, preferably a psychiatrist or psychologist, at least monthly. If you have a physical impairment, you should be visiting the doctor regularly and your doctor should be giving you objective tests, including x-rays, MRIs, or CT scans, whenever possible.
Missing medical records. Occasionally disability claims are denied due to insufficient medical evidence just because the insurance company has failed to obtain all your medical records. Ask your disability carrier for a list of the records it has requested and those it has received. If records are missing, make sure that your insurer requests the appropriate records. Some persistence may be required.
Doctor's statement. Perhaps the single most important factor in proving your disability is the opinion of your treating physician. You or your attorney should ask your doctor to provide a detailed opinion as to your work-related medical limitations. Do not rely on the forms from your insurance company, as these are often designed to elicit responses that will support a denial. Have your doctor write a letter that details exactly how your impairment limits your work abilities. If your treating doctor refuses to support your case, find a doctor who will.
Failure to Meet the Policy's Definition of Disability
Check your policy's summary plan description for the precise definition of disability to see if you can meet it. Under an "own occupation" LTD policy, you are disabled if you're medically unable to carry out the duties of your particular occupation. An "any occupation" policy defines disability more narrowly: the inability to perform the duties of any job. Some LTD plans transition from "own occupation" to "any occupation" after a certain length of time, usually 24 months.
Also check your policy's summary plan description for any excluded conditions. Medical impairments related to substance abuse or pre-existing conditions are typically excluded from coverage. Individuals whose conditions are based on subjective complaints rather than objective testing (such as depression, fibromyalgia, or chronic fatigue syndrome) may be limited to 24 months of benefits. (For more information, see Nolo's article on understanding your LTD policy.)
Video Surveillance Inconsistent with Disability Claim
If you're in the process of filing an LTD claim or are already receiving LTD benefits, be aware that your insurance company may ask investigators to follow you and take video surveillance. If investigators record you performing activities that are inconsistent with your allegations of disability, your claim could be denied -- or your previously awarded benefits could be terminated.
In some cases, video recordings are used to justify a disability denial even where the videotape does not actually prove you aren't disabled. For example, individuals with fibromyalgia often report having "good days and bad days" with regards to pain. If a surveillance team "catches" such an individual performing light yard work, this evidence could be used to justify a denial, even if the video was taken on a "good day."
The best advice for dealing with the threat of video surveillance is to act in accordance with your doctor's restrictions. If your physician has advised you to walk with a cane and avoid lifting more than five pounds, don't shovel the snow in your driveway or bring heavy bags of groceries in from your car. Doing so could place your health and your disability benefits in jeopardy.
Take special note of any deadlines when filing and appealing your claim. Most individual plans and all group plans governed by ERISA give you 180 days to appeal an initial denial, and you should use this time to hire an LTD attorney who will help gather medical records and other documentation to "stack the administrative record" with favorable evidence. If you miss the 180-day deadline, you won't be allowed to sue your insurer in federal court because you have failed to exhaust your administrative appeals. Look for your filing deadline on the notice of denial from your insurance company, and file your appeal as soon as you can.
Similarly, be sure to submit all medical evidence as soon as possible in the appeals process. Under ERISA law, federal courts are limited to considering only the evidence contained in the administrative record, so don't wait until federal court to present medical records, doctor's reports, third-party statements, or any other evidence helpful to your case. If evidence hasn't been submitted to your insurance company, it almost certainly won't be allowed in federal court.