Long Term Disability Insurance Application and Pen


Arnett & Arnett, PC July 6, 2022

According to the Bureau of Labor Statistics (BLS), about 40 percent of U.S. employers, both public and private, offer long-term disability (LTD) policies. These policies may vary in how a disability is defined and how long benefits will be paid, and it provides compensation when the policyholder is unable to work because of a disability.

Private insurers also offer LTD policies to employees when there are no workplace options available. A major difference between the two types of policies – employer-sponsored and private – lies in the appeals process when the policyholder goes to challenge a denial or termination. Employer-sponsored plans are covered by a federal law known as the Employee Retirement Income Security Act (ERISA), while private policies are not.

Either way, the insurance companies underwriting the policies are for-profit institutions, meaning they are out to protect the bottom line. It’s not unusual for more than half of all initial claims to be denied, and even if benefits are allowed, the insurer will take steps – and avail themselves of clauses in your policy – to terminate your benefits down the road.

How do you appeal a denial or termination? The process is under an ERISA-covered plan. Plans from private insurance companies may pose varying requirements.

If you’ve been denied a claim for benefits under your LTD policy, or later been terminated, in Chandler, Arizona, contact the long-term disability attorneys at Arnett & Arnett, PC. We have more than four decades’ experience fighting the insurance companies to secure the benefits denied to LTD policyholders. We also proudly serve clients in Phoenix, Tucson, Flagstaff, and throughout Arizona.

Common Reasons for an LTD Denial

A major reason for denials, which must be in the notice sent to you rejecting your claim, is the lack of sufficient medical evidence. If you just fill out the claim form supplied by the insurance company, that will often be deemed insufficient. You must accompany the form with a statement by your physician detailing your disability and the reasons it prevents you from working. Text results, MRIs, and X-Rays should also be included.

Another reason can be late filing. Your policy will state that you must report your disability in a prompt manner dating from the time you first experienced it. Still, another reason is the disability springs from a pre-existing condition. Your policy may have a clause announcing that it will not cover any disability arising from a condition you had prior to obtaining the policy, or it may give a time under which pre-existing conditions will not be covered.

Termination of Benefits After Initial Approval

If you’re already receiving benefits, insurance companies will monitor your condition, again with an eye to the bottom line. If they can reduce or eliminate your compensation, that helps reduce what insurers call their “exposure” to liability.

Many policies will have a provision that differentiates between your “own occupation” and “any occupation.”

This means after 24 months, you will no longer be paid for your inability to perform the duties of your former occupation, but you must seek employment under any occupation you’re capable of performing. Say you previously were a warehouse worker lifting heavy boxes all day, and your back went out, so you could no longer do that. In 24 months, your insurer will require you to find a job where your back is not the issue – sitting behind a desk and operating a computer, for instance.

Insurers also are notorious for hiring investigators to tail you in public. If these investigators can photograph or videotape you undertaking tasks inconsistent with your stated disability – going shopping and bringing home heavy boxes, for instance – they can use that to terminate your benefits. They will also snoop around your social media. If you post a video of dancing at a friend’s party, that might be enough to challenge or end your benefits.

Another reason could be that you failed to submit to an independent medical examination (IME), which your insurer required to substantiate your claim. The IME will be conducted by a physician or medical group named by the insurance. Still, another reason is that you failed to continue your treatment regimen. For instance, you stopped seeing your doctor or attending physical therapy.

Appealing a Denial or Termination

The notice sent to you denying or terminating your coverage will state the reasons for the action. You then must study your policy to determine the process and timeline for appealing the decision. When you appeal, you will need to “stack the evidence,” which means providing as much medical and vocational documentation as you possibly can.

This includes not only physician statements and test results but also statements and results from vocational counselors and physical therapists. Testamentary letters from family and friends describing your disability are vital too.

With ERISA-back plans, you must submit an appeal before filing a lawsuit, sometimes even two. With private policies, though it may be possible to directly take matters to court, it is still advisable to file an appeal first.

ERISA may sound like it’s employee-friendly, but it has clauses protecting the insurers, the primary of which is that, should you go to trial, you cannot introduce new evidence. Only what you’ve submitted before the trial will be considered by the judge. That’s why you must stack the evidence. 

Though lawsuits against private insurance policies – those not sponsored by the employer – may not have this restriction against new trial evidence, it’s still a good idea to stack the evidence before going to trial.

Getting Experienced Legal Guidance

Some insurers are more prone to denying every claim if they can find a reason, while others will adhere to more ethical standards. Still, once you file a disability claim, you can be sure the insurer will probe deeply and challenge you on every aspect of your claim.

Your best bet is to have an experienced LTD attorney on your side from the beginning. If you’re in Chandler or Phoenix, Tucson, Flagstaff, or anywhere else in Arizona, rely on the seasoned attorneys at Arnett & Arnett, PC. We have previous experience working for the big insurance companies, so we know all their tricks and tactics and can counter them. Contact us immediately if you need to file a claim or submit an appeal.