Carrot and StickCarrots for the month of August go out to Mass Mutual and Guardian for engaging in fair and equitable file reviews and maintaining good professional relationships with outside third parties such as consultants and attorneys. DCS, Inc.’s contact with these insurers has been extremely positive. I hope the trend continues, but for the most part, both Mass Mutual and Guardian appear to “do their jobs” while at the same time respecting the fact insureds and claimants are ill. Although the Guardian continues to aggressively risk manage claims at times, there is no indication of deliberate targeting for profit. Remaining honest in a dishonest industry isn’t easy, but hats off the Mass Mutual and Guardian claim specialists for making the effort.

Another carrot is awarded to Met Life, who in recent times recognized their failed attempts at customer service, and have outsourced business to customer service representatives in India. Admitting what you don’t do well is the first step to improvement and DCS, Inc. supports insurers who attempt to “fix” mistakes. Congrats, Met Life….we hope you continue that trend.

DCS, Inc. also awards a carrot to Northwestern Mutual – a company considered the “king” of private disability insurance. DCS, Inc. appreciates the manner in which NWM conducts its business, works with third-parties, and makes fair decisions. Our hats off to NWM claims specialists who are clearly professionals and who are great to work with.

Unum Group continues to be in first place for a DCS, Inc. stick award for disagreeable claim specialists who seem to be sending out written communications containing threats of claim terminations, strong-armed attempts to obtain signed SSDI Authorizations for files, and general poor claims management. Nasty, and threatening Unum claims specialists are usually the result of increased management pressure and stress to deny more claims. There is absolutely no reason for Unum Group as a company to have letter templates of such a negative nature as to cause insureds and claimants to fear when there is no reason to do so. Unum’s letters are unreasonably threatening, contentious, and negative, no doubt deliberate to cause insureds to cooperate with its demands regardless of what they are. Consistently sending out letters that are obviously negative and adverse is a poor way of doing business and lend to Unum’s already poor public reputation.

Prudential is also given a second place stick award for engaging in claims review practices that are unfair and misrepresented by internal RN medical reviews. The company is second only to Unum Group with its egregious claims practices of misrepresenting policy provisions, relying on RN medical reviews, and unfair claim denials.

Employers should consider very carefully all of their options and engage due diligence when selecting Plan providers of group benefits.

Finally, CIGNA is given a small twig for somewhat attempting to abide by the multi-state settlement agreement, but not informing all employees of the necessity of doing so. It’s unclear whether all CIGNA employees are aware of the new claims process requirements.


IndiaAs my readers may be well aware Lindanee’s Blog has often compared Met Life’s customer service to “The Walking Dead” since it was so difficult to have any meaningful contact with claims handlers and managers. In fact, my experience with Met Life’s customer service is contacting corporate relations in order to get a call back from group disability.

Recently, a client complained she was contacted by a woman from Met Life who left a message she couldn’t understand. I returned the call and reached Met Life’s customer service representative in India. When I asked about Met Life’s outsourcing its phone calls so far away the representative responded, “Yes, Met Life participates in a global partnership of business.”

This response is almost word for word what I heard from an anti-virus software rep I contacted several years ago also from India. My experience at that time was a disaster, and after concluding I wasn’t getting anywhere, hung up.

However, I have to admit the “global” Met Life representative I spoke to was very polite, answered all my questions, and resolved the problem I called about. Although providing good customer service wasn’t a strong point for Met Life, outsourcing its customer service might be a good thing after all. One problem may be that English-speaking insureds could have a problem understanding dialects and accents from those abroad. Initially, my client said, “I had trouble understanding what she was saying.”

Although politically I don’t favor sending American jobs to global sources, employing insurance customer service representatives overseas may not be a bad idea if it continues to improve Met Life’s ability to have contact with insureds and claimants. In my opinion, Met Life’s customer service was so poor, anything could have been an improvement.

Nevertheless, my current experience with Met Life’s “global resources” was positive and I’m happy with the communication of information provided to me. We’ll have to keep an open mind moving forward and hope the improvement is long-lasting and a step in the right direction.

Friday Q & A

Q&A1How long is SSDI good for?

SSDI will last until either SSA denies benefits, or it converts to SSR at your normal retirement age. SSDI also ends if you return to work and earn more than $1,020 per month, or your SSDI work program ends.

How many claims can I have at one time with First Unum?

You can only have one claim at a time ongoing, but you can receive benefits under more than one policy. Insureds who have more than one diagnoses are said to be “co-morbidly impaired” and all impairments contribute to one claimed disability.

Will I still get SSDI lump sum while waiting on SSI installment?

I think you might be really confused. SSI is social welfare and only those who meet specific income and asset guidelines can receive it. Those who are disabled and meet the qualifications at the time they apply for SSDI, will begin to receive SSI as an emergency welfare payment while SSA evaluates their application for SSDI. Once SSDI is approved, SSI stops, and SSDI is paid retroactively to the original date of disability. It is likely SSA will deduct monies previously paid for SSI.

What exactly is a “red flag”?

A red flag is a type of warning signal recognized by disability claims handlers resulting in aggressive or increased risk management activities to determine if the insured is honest or not. There is a very good post on this blog called, “A Primer on Disability Red Flags” and you may want to search for it and read it. Anytime information appears to be inconsistent, inaccurate or out of the ordinary, a red flag “tips off” the claims handler to investigate. Insured should try not to create “red flags” because the investigations that follow can be a real pain.

My Unum claims handler told me I could “alter” my SSDI award letter and that’s why they want to obtain my SSDI file on its own. What’s up with that?

It’s hard for me to believe that any insured or claimant would be stupid enough to forge his/her SSDI award letter. Doing so is a federal crime not to mention insurance fraud. In my opinion, the intent of the threat is more likely to scare insureds and claimants into signing CL-1155 Authorization so that Unum can obtain the file. What is pretty obvious here is that Unum is most likely profiting from the information contained in SSDI files and may be stressing out the claims handlers to make sure they obtain it. Accusing insureds and claimants of potentially forging SSDI award letters is clearly insurance paranoia.

DisneylandOne of Unum’s old employee incentives is to send their best and finest to Disneyland for a three-day, all expense paid trip to Disneyland. It’s called “ASPIRE, and according to a reliable source Unum employees still covet the prized award for “beyond the call of duty” service to the company.

To be considered, employees need to have received “Exceeds” performance reviews and have contributed to both the company and the community in some way. In reality, those who have close relationships with managers and generally make them look good are given the opportunity to go. Each year management sends 5-10 employees to enjoy themselves in a child’s paradise. I think there’s a message in that.

Before the merger Jim Orr III awarded a yearly “Chairman’s Award” for which everyone received an expensive clock and a monetary award of $2,500. It was a long drawn out selection process of nominations, voting and finally selection of the one Unum employee that well represented the company. The award was officially given in grandiose style by the CEO at a formal dinner.

After the merger, however, employees were, and are still rewarded with ASPIRE conferences in Florida, a child’s paradise of three days in the sun. The average age of a Unum employee I’m told is 20-25 since the company prefers to hire employees right out of college. This is indeed puzzling to me since most Unum claims handlers appear not to have both oars in the water. It may mean, however, that “younger” is not necessarily better since newbies generally lack maturity and experience of older workers.

Personally, I really never paid attention to ASPIRE. It was pretty clear to me I already worked for Mickey Mouse and Daffy and I never had a desire to meet them in person in Florida. After all, there’s only so much of Disneyland in Maine one lead claims specialist can stand.

Nevertheless, Unum’s ASPIRE program provides incentives to employees who excel at their jobs, and you can’t at least say the company doesn’t try hard to please. Unum also encourages attendance at summer cookouts, and boat trips to lobster dinners on the islands, as well as its own versions of “Hawaiian Shirt Days.”

In fact, Unum’s culture is accurately portrayed in the movie “Office Space”, particularly the birthday cake scene depicting employees standing around looking bored singing off-key “Happy Birthdays” to managers no one liked. I suppose it’s all in corporate fun to make-believe your company cares about you.

Today, as an outside consultant on the other side of fence, I’d ASPIRE for fair and objective claims review and giving insureds a fair shake with their Unum claims. I learned very quickly as a Unum employee that there is no free lunch at Unum, and insureds generally wind up paying the piper.

Risk ManagementA recent popular belief among insureds and claimants is, “Gee, I knew I wouldn’t have any trouble with my insurer because my doctors completely supported my disability.”  Or, “I’m a CFO and member of the board, I know what’s going on!”

Really? Unfortunately, the disability claims process is an equal opportunity misnomer where even the best educated and credentialed are thrown under the train. An insured is an insured regardless of his/her educational background.

The truth is, insurance companies are permitted to “fully investigate” claims in order to minimize the risk of paying out greater than the underwriting liability usually determined to be 60%.  In other words, if premium is based on a pay out rate of 60%, management must keep the number of claims paid at the same percentage.

In order to manage risk, insurers are permitted to conduct investigations to ensure claims paid are legitimate. In addition, in order to make windfall profits, disability insurers also invent internal claim review protocols with the intent of denying claims that legitimately should be paid. The concept of insurance no longer involves insureds paying premium to cover risk of disability, but paying premium to self-insure and assume the risk of getting paid at all.

Therefore, insurers are permitted to investigate claims and decide for themselves (discretionary authority) who should or who should not be paid.

Actions that are considered normal and customary to the investigative process are the following:

  1. Basic review of policy provisions to determine whether insureds and claimants are eligible for benefits under the contract terms.
  2. Requests for all patient notes and medical records from all treating physicians who have been consulted for the claimed disability within the last 12 months. Pre-existing investigations usually request up to 2 years of patient notes.
  3. The conduct of internal medical reviews by qualified insurance-paid medical directors with specialties related to the claimed disability.
  4. Requests to employers for occupational, financial and date of hire information.
  5. Requests for personal and business tax returns for DI insureds, or those who continue to work part-time and file residual claims.
  6. Surveillance and activities checks. (Requests for credit reports and Internet snooping.)
  7. Independent Medical Evaluations and Functional Capacities Evaluations.
  8. Requests for continuing updates of both medical and individual progress reports.
  9. Requests for field visits if contractually required.
  10. Requests for signed HIPPA approved Authorizations that are broad in scope.
  11. Requests for signed Payment Option Forms that are reasonable.
  12. Requests for SSDI medical and award information with the discretion of the claimant to release such information.
  13. Reducing benefits to $0 to recover lump-sum SSDI repayments when claimants refuse to pay back the money.
  14. Offers of settlement that are fair valuations of the policies  and benefits concerned.

Insurance actions NOT considered to be reasonable, or part of the normal and investigative process are:

  1. Harassing and/or vexatious calls to obtain the same medical, vocational, or financial information over and over again.
  2. Medical note requests from treating physicians that have nothing to do with the claimed disability, i.e. gynecologists, optometrists, fertility clinic notes, family planning, dermatologists etc.
  3. Tax return requests for total disability insureds who are not residually working.
  4. Frequent phone calls to insureds’ homes with voice mail messages often threatening claim denial.
  5. Surveillance activities deliberately designed to instill fear, intimidate, threaten, or trespass on private property.
  6. Coercing insureds to sign adverse Payment Option Forms under threat of termination of claim. (Coercing insureds to sign POF forms giving voluntary liens to insurance companies is not an appropriate act.)
  7. Forcing insureds and claimants to allow the release of SSDI file information (Form 831) without explaining what the form will be used for and why the insurer is requesting this form in particular.
  8. “Doctor shopping” by requesting multiple IMEs to evaluate co-morbid claims without considering the effects of “whole body” disability.
  9. Failure of the insurance company to have a claims review process in place that lends itself to the fair and objective evaluation of claims.
  10. Offer of settlement and then retaliatory actions when settlement is refused. “Low ball” or unfair settlement offers.
  11. Over critical, harassing or unreasonable claims specialists.
  12. IME physicians who are rude, hurtful, dirty, or who provide unclean examining rooms and facilities.

In most instances insureds should make an effort to determine what are normal and customary actions in the claims process and what aren’t. DCS, Inc. receives many calls from insureds after they have read every derogatory post concerning the claims process on the Internet and become panicked about their own claims.

“My insurer is contacting all of my physicians for medical information!”, a caller tells me on the phone in a very shaky voice. “What should I do?”

“Is your insurer paying you?,” I ask.


“If your claim isn’t broken, don’t try to fix it. Requesting medical information periodically is a normal part of the claims process.”

It’s important for insureds and claimants to keep in mind that disability insurance is NOT an entitlement and insurers have full investigative authority to determine whether claims should be paid or not. “Claim investigation” per se will be on-going for as long as the insurance company has liability for claims. There are no claim safety zones, and there is never a time when insurers will entirely give-up “risk managing” claims.

Unfortunately, receiving continued disability benefits is an unsettling and often frustrating experience for those who have no idea what’s normal and expected and what isn’t. Updating claim information is a normal part of the claim review process and there is no need to panic when contacted by insurers for updates. Stay calm, and fill out the paperwork as requested.

Friday Q & A

Q&AWhen do Unum disability checks usually come?

This question is a real misnomer since every Unum insured or claimant has a different “benefit payment period” Benefit periods begin after the elimination period. For example, an insured with a 90-day EP and a date of disability of January 1, 2014 would have a 1st benefit payment date of April 2, 2014 – May 1, 2014. Benefits begin on the 91st day and are generally paid retroactively; therefore Unum may release the check 5 days in advance such as April 25th. Benefit payment periods are found on pay stubs.

Those who are working part-time should report earnings the same time each month in order to receive checks regularly. Benefit payment dates are important indicators of whether or not all periods are paid correctly. We recommend keeping all Unum pay stubs and making note of any “unpaid” or interrupted pay periods.

Why doesn’t my insurer owe me the future value of my policy when offering a lump sum settlement?

This is perhaps the biggest mistake insureds and claimants make when considering insurance lump sum settlement offers. Most will arrive at a figure mathematically by considering their age and multiplying benefit amount times periods left to age 65.  Doing this produces a figure called “future value”, or what the policy would be worth at age 65. However, the value of any disability policy today is NOT future value but present value.

As a former college associate professor of accounting I always found the concept of “NPV or net present value” difficult to teach. The concept explains that if you invest $1 today at a certain interest rate, you will have more money in the future. This is often referred to as the “time value of money” and the difference between present and future value is compounded interest.

Insurance companies will begin with future value and then “discount” or remove the interest using a discount percentage rate to arrive at a figure called present value. This is the value of your policy today. However, insurers never pay 100% of net present value but only a percentage somewhere between 50-75%.  How much of an indicator present value really represents in questionable since most insurers will not pay out lump sums greater than 80% of the claim financial reserve.

As most you may recall from prior posts, financial reserves are monies “reserved” to pay future liabilities of claims. If insurers can’t make at least a 20% profit via a financial reserve gain, they generally won’t offer a settlement. The guessing game for insureds and claimants is to try to pinpoint how close lump sum offers are to the actual claim reserve. Most insurers consider claim reserves to be proprietary and confidential and won’t tell you what they are.

In any event, no insurer will pay, or should pay future value for a lump sum settlement since the value of the policy is present value, not future value. In theory, insureds should be able to take the offered lump sum amount, invest it at the given discount rate, to receive future value at age 65. The problem is, given the current state of our economy and interest rates at less than 1%, realizing 100% of the true future value is impossible.

Again, I realize the concept of present value might be difficult to grasp, but the value of any disability policy is present value, not future value.

SlinkySeveral years ago it was reported to me that a DCS, Inc. investigator found the following comment on one of Unum’s manager Facebook pages, “Claimants are like slinkys they don’t have much value, but you still like to see one tumble-down the stairs once in a while.”

This one comment by someone who was/is in a supervisory position in Unum’s claims department epitomizes the company’s disrespectful perception and attitudes towards those it sells policies to.

Unum’s popular presumption that all insureds are crooks and malingerers is more common than one might think, but unrealistic. Although general statistics may show approximately up to 20% of disability claims filed each year are fraudulent, by and large most individuals who file disability claims are honest. Why then, does the notion of deception continue to prevail at Unum?

One of Unum’s pre-merger Presidents said, “We pay the claims we should pay and not a penny more!” Another Vice President of claims, Mary Fuller, directed all claims handlers NOT to inform claimants of their ERISA rights on the phone.  Ralph Mohney, a Paul Revere head hunter, created the “hungry vulture award” given to claims handlers who denied the most claims. (Unum had another name for the same prize, “Shareholder Value Awards.”) A Unum executive in the claims area, Cathy Liston, told her managers, “Go down there and tell them to deny more claims!”

No wonder Unum’s managers think of insureds and claimants as slinkys with no value. Unum Life Insurance and subsequently Unum Group operate by managing financial reserves that presumes the excess of claims denied over those paid. Unum is by no means the only insurer operating on stereotypes of dishonesty.

The Hartford, for example, increased its private investigators from 16 to 60 and employ some of the most aggressive surveillance and activity checks I’ve seen in a long time. Other insurers parrot those practices and have also increased Internet surveillance with specialized technology experts.

Insurance articles elsewhere suggest the increase in claims investigation stems from a bad economy and the trend of insureds to file claims for disability secondary gain. While I admit this statement has merit, I doubt the American “bad economy” caused an increase in fraudulent claims from 20% to everybody. Besides, Unum’s aggressive risk management of claims began much earlier after the company’s demutualization in the mid 1980″s. “Going public” hasn’t been kind to Union Mutual resulting in the negative consequences that transpired subsequent to changes in organizational structure.

Although Jim Orr III, Unum’s then CEO, attempted to change internal attitudes via the 1998 People Goals, take over henchmen like Harold Chandler and Ralph Mohney further reinforced company wide negative attitudes that all insureds and claimants file deceptive disability claims and therefore the lion’s share of investigative resources should be in aggressive risk management. Internal medical protocols subscribing to the idea that Fibromyalgia and Chronic Fatigue were all “in their head” began to emerge as well as manipulations of financial reserve, ERDs, roundtables, and searching for the “biggest bang for the buck.”

These executive management philosophies in combination with Unum’s cultist corporate culture encourages “slinky” comments by claim managers and claims specialists. “Thinking outside the box” isn’t something employees are encouraged to do at Unum, and unfortunately initiative and creativity are shunned as anti-establishment and contrary to Unum’s goals and objectives. Employees who can’t “keep their mouths shut” are quickly ostracized, humiliated and terminated.

The good news is that Unum’s insureds and claimants are much more knowledgeable and aware than they were a decade ago and can recognize bad faith when they see it. It is disappointing though for claimants to have to work so hard to receive benefits they are already entitled to.

A good example is Unum’s relatively new “snoop dog” Internet surveillance department that in most cases sniffs out old, inaccurate information Unum holds against insureds for what seems like an unreasonable amount of time. The burden to prove the inaccuracy of Unum’s poop-digging is transferred to insureds and claimants who must show the information is “simply not true.” Although most intelligent people recognize the Internet is not an accurate source of information, Unum treats tidbits of information as gospel and continues to deny claims citing information obtained from Facebook, Linkedin, Twitter and private chat groups.

These activities are all part of the same negative philosophy that not only are claimants hiding information but that they also aren’t smart enough to keep it off the Net. (Unum may have a valid point here.)

Nevertheless, Unum insureds and claimants certainly aren’t slinks trying to extract income from Unum under false pretenses. Most people are honest about their medical inability to work and file legitimate claims.

It’s always been my experience in business that employee attitudes are derived from the top down. This is particularly true of Unum Group and its inability to find ways to pay claims fairly AND make a profit. Blaming insureds and claimants for Unum’e inept executive management isn’t fooling anyone. It’s just a company completely devoid of positive ideas.


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