In 2014, DCS, Inc. turned down several cases when it became obvious all insureds wanted to do was pick fights with their disability insurers. Given today’s ability to research and obtain information on the Internet, it isn’t surprising that insureds and claimants wind up “putting the cuffs on” and refuse to take them off even when it isn’t necessary to go into the ring.
Disability policies are legal contracts between two entities – an insured and an insurer. ERISA folks are “certificate holders” of employee group Plans between employers and Plan Administrators. All parties to a contract have specific duties, responsibilities and accountability written in the contract itself. When both parties abide by provisions set forth in the contract they are said to be in compliance with policy provisions.
Nearly all disability policies require insurers to pay benefits if the “proof of claim” submitted meets the definition of disability as it is defined in the policy. Insurance companies have (in about half of the states) complete discretionary authority to decide what is and what isn’t proof of claim and what the policy means.
Still, insurers are required to pay benefits when, due to medical or mental disability, insureds are unable to work. This may be a bit over simplified, but insurers have contractual responsibilities to pay benefits – disability benefits, COLA, retirement contributions, and other benefit riders contained within policy contracts. On those occasions when insurers pay benefits, they are in compliance with their obligation under the policy.
After spending countless hours on the Internet researching every negative discussion regarding disability insurance, some insureds and claimants actually look for reasons to remain in conflict with their insurers. Here’s a good example.
Mr. S. has been receiving disability benefits from Unum for the last 10 years. Although he continues to work part-time the nature of his business was such that it made sense not to report monthly P&L information to Unum, and at the time Unum accepted yearly tax returns to average and true up benefits actually paid. I spoke to Mr. S. many years ago and refused to take his case because he wanted to find reasons to argue with Unum even when the company appeared to be bending over backwards to accommodate his business and how he reported income.
DCS received an unexpected call from Mr. S. this week once again looking to hire a consultant to assist him with his Unum conflicts. Current issues centered on the fact that Unum is withholding his benefit because it now requests monthly P&Ls in order to compare “apples to apples” and pay him accurately. Mr. S. told me, “I’m going to retain counsel and sue Unum for changing its mind and making me send in monthly financial information. They want tax information too, and I’m not sending it!”
I declined the case again. First of all, Unum has the right to change its mind and request financial information in different formats if it can defend via the policy that it makes reasonable sense and will result in the payment of accurate benefits. Actually, Unum’s request is consistent with its new “crackdown” on forcing all insureds to submit monthly P&Ls. It DOES make sense to request monthly P&Ls since benefits are paid on a monthly basis.
It is also reasonable for any insurance company to request annual tax returns from insureds who are receiving “residual” benefits. This is an argument Mr. S. probably won’t win. Before I let Mr. S. end the conversation I advised him that the shortest distance to conflict resolution in this case is to provide Unum with monthly P&Ls and annual tax returns. If he doesn’t do that, Unum will not pay him until he does.
Unfortunately, I didn’t get a sense from Mr. S. that he intended to take my advice. He wanted a fight with Unum even though the claims handler informed him in writing the company didn’t have a problem paying his claim as long as he submitted monthly P&Ls. Mr. S. is bringing on a conflict that in reality shouldn’t exist.
Most deliberate conflicts with disability insurers stem from the idea, “I have to DO something in order to get paid.” Actually, there are times when the best thing to DO is NOTHING. In fact, insureds and claimants who contact and/or write insurers on a frequent basis create red flags bringing on the lion’s share of investigative “risk activity.” One of my most often used comments to insureds is: “If it isn’t broken, don’t try to fix it.”
Some insureds continuously engage in what I call, “bringing up the who done its.” As one insured told me recently, “Ten years ago, Met Life accused me of not sending in my medical information on time, and then they did this……..and then they did that…..and that one claims handler was terrible….and they overturned the appeal and paid my claim….and then that nasty old claims handler…….”
Although conversations like this can go on for hours, my question was, “Is Met Life paying your claim?” “Well, yes”, the claimant replied, “Met Life has been paying my claim for over 12 years.” At the end of the conversation it was determined there was no real conflict at all, and the insured really didn’t need my help.
While I am the first to admit there are many occasions when insureds should “push back” to defend their disability claims, there is generally no reason why anyone should remain in constant conflict with his/her insurer. The difficult part for insureds is determining which conflicts can be won, and those that can’t.
Finally, insureds and claimants should also consider the emotional stress and anxiety caused by constant conflict. It takes a lot of energy and physical stamina to continuously argue with an insurance company. In fact, over the years I have often said that managing disability claims is equal to having a secondary cause of disability. In many ways, DCS’ patterns of practice include advising claimants to “take a step back” and move forward professionally in an entirely different direction.
Those who read Lindanee’s Blog on a regular basis know that I will defend and advocate for any insured or claimant when there are accurate and reasonably supported issues of bad faith or unfair claims practices. At the same time, my first goal is to opt for conflict resolution so that at some point no further claim conflicts exist, and claimants continue to receive benefits under the terms of their policies and live in peace.
Ranting and continuously picking fights with disability insurers is not an acceptable way of managing disability claims. After a period of time insureds find themselves managing the conflict instead of their claims. It’s a merry-go-round insureds do not need when ill and unable to work.
If there are “issues” to be fought with disability insurers, the goal should always be to resolve conflicts in accordance with your rights under the terms of the policy contract.
Finally, insureds should carefully consider the high cost of conflict health wise and refrain from “picking” unnecessary fights with insurers when they are in fact meeting obligations under the contract policy or Plan.
The best way to manage disability claims is to resolve conflicts rather than constantly looking for ways to argue. As I said, “If it isn’t broken, don’t try to fix it.”