Do the Right ThingI don’t think it would be unfair for me to say that most disability insurers have failed miserably in finding ways to pay claims fairly AND make a profit. In my opinion, the top four worst insurers in America – Unum, Prudential, CIGNA, and Aetna all strategize internal procedures designed to terminate legitimate, payable claims in order to show profits. This means that while it is nearly impossible for insurers to do the right thing, profits are made by doing the wrong thing every time.

If this were not so, there wouldn’t be so many claimants left without benefits after insurance internal medical reviews, IMEs, field visits, round tables, vocational reviews, and surveillance. In fact, very few insureds and claimants are happy with the disability claims process the way it is, and most employers regard disability insurance as an employee benefit’s worst evil.

Like all American publicly traded corporations, disability insurers are in the business of providing profits to stockholders looking to make money on their investment portfolios. Disability corporations won’t stay solvent very long without strong shows of solid growth and increasing profitability.

What stockholders often do not realize is that thousands of American workers are thrown under the train so that cents on the dollar per share can be paid to stockholders of record. Like the corporations they buy into, perhaps stockholders DO know, but don’t give a damn.

The inability of insurance management to come up with internal protocols that pay legitimate claims but denies claims that should be denied is an economic problem for us all since thousands of Americans are left financially broken, but medically unable to return to work in some capacity.

In today’s claim environment any insurer can “stack the deck” against claimants and create the illusion they are not disabled when in fact they really are. What happens to former insureds and claimants who now must rely on their respective states for Medicaid, food stamps, and welfare?

Clearly, the system of disability claims review is broken and should be fixed by a new generation of creative executive management with innovative perspectives. Although I’m definitely not a fan of Ralph Mahoney’s, I concede he adopted one of Unum’s most successful “return to work programs” that met both Unum’s profitability targets and assisted claimants to return to productive work.

Unum, for example, is missing the profitability boat by not focusing return to work efforts immediately when claims are initially submitted for STD. Instead of forcing claims handlers to update patient notes every two weeks in a stop-start, stop-start payment process, these same reps can be retrained to work with employers to place claimants back on the job using Unum’s group rehab and work accommodation contract provisions.

If I were a member of Unum’s executive management, I’d begin by creating a detailed marketing plan whereby the company’s group products in STD/LTD can be marketed to employers as a “work benefit program” whereby the company coordinates occupational and medical needs to return workers to their jobs within reasonable recovery periods. Since nearly all Unum group policies contain rehab, work accommodations and work incentive benefit programs, capitalizing on these efforts could prove profitable.

In fact, I can’t think of a single claim in the last 5 years (any insurer) that documents any effort whatsoever on the part of insurers to assist, and/or work with insureds and claimants to return them to accommodated work schedules. With some negotiation with employers, “work hardening programs” combined with the payment of work incentive benefits could return up to 30% of claimants to work both part or full-time.

It has always been my experience that those claimants who request rehab assistance are turned down and claims are denied once a medical release is obtained to participate in the programs designed to help them. Obviously, insurers are more inclined to deny claims outright than to put time and money into rehabilitation programs.

Disability insurers like Unum, Prudential, CIGNA, Aetna, The Hartford, and Reliance Standard actually shoot themselves in the foot by pushing all claimants toward SSDI, a more permanent disability arrangement. Assuming nearly every insured who tells me, “I’d go back to work if I could” is not just giving lip service to return to work optimism, it seems reasonable to me that with a little help and negotiation with physicians and employers, it may be possible for insureds to do just that.

Still, disability insurers completely ignore the more obvious claim review strategy of “return to work programs” allowing proven profitable claim strategies to remain untapped. Unfortunately, instead of putting money into training, and work incentive negotiation skills insurers take the more egregious route to devise strategies proving claimants are able to work when they cannot.

Return to work programs and incentives can also prove to be profitable to claimants who medically might be able to return to work with workplace and job accommodations. Work incentive benefit programs allow claimants (under certain circumstances) to keep both RTW earnings and disability benefits for a period of 12 months. In combination with formal rehab programs and work hardening over time, some claimants could be paid “residual disability benefits” indefinitely while working part-time.

The important information insureds and claimants need to know is that more often than not positive provisions of group disability are often ignored by insurers who are looking to deny claims outright. Claimants looking to return to work always have the right to request return to work assistance particularly involving provisions written into group Plans whether insurers are interested or not.

Therefore, while disability management continues to take the easy and unprofitable route to compensate stockholders a few cents on the dollar, new generations of innovative management lie in the wings waiting to redesign claims review processes into a more profitable means of returning insureds and claimants to work.

Although official return to work programs and initiatives created by new generations of talented management are not rocket science, they may very well be way ahead of their time.

Financial AccountingEmail from one of our clients forwarded the following information to us……. as of 12/5/2014

Unum Group (UNM)
Was Downgraded to B from B+
This is the INVESTMENT rating, designed to measure the risk and reward of owning the investment itself. So please do not confuse it with our FINANCIAL STRENGTH Rating which would evaluate the financial safety of the company overall.

The new rating is B. This means that the stock has a good track record for balancing performance with risk. Compared to other stocks, it has achieved above-average returns given the level of risk in its underlying investments. While the risk-adjusted performance of any stock is subject to change, we believe that this stock has proven to be a good investment in the recent past.

Any downgrade, no matter how small, is a negative sign. This one brings your institution one step closer to warranting a change on your part. So we recommend you stay on the alert for any further downgrades. But right now, it does not warrant any new action on your part.

As always, we will continue to monitor this company for you. And we’ll let you know as soon as there’s any further change.

That’s it for now. We’ll be in touch again as soon as there’s a rating change in any of the companies you’ve placed on your Watchlist.

Best wishes,

The Weiss Watchdog Team

Christmas GrinchUnum’s investigative teams are ho-ho-hoing neighborhoods keeping insureds and clients under surveillance for the holiday season. With less than three weeks left to the end of the year, there’s no doubt Unum’s claims managers are keeping reps frenzied looking for last-minute denials.

In addition, Unum investigators aren’t fooling anyone by sneaking around trying to “catch” insureds carrying in Christmas presents to put under the tree. Like the Christmas Grinch, Unum’s goals are to terminate as many claims as possible stealing Christmas from families for year-end profit.

One of the most popular overused ruses used by Unum investigators is the old “I have to deliver a package to you” line. On those occasions when surveillance investigators aren’t sure you’re at home (or can’t locate you), a phone call is made to your residence and a VM is left letting you know there is someone who would like to deliver a package. Claimants report afterward there is no package delivery, but someone mysteriously knocks at their door scaring them to death.

Ten years ago Unum’s investigators used the same ruse; and, it’s somewhat disappointing to note that in a decade there has been no Unum think tank conjuring up better investigative tricks. Still, insureds and claimants should be aware of Unum’s “we’ve got a package for ya” ruse and blow the cover of any investigator sitting across the street with a camera.

Surveillance investigators do not like to be caught spying and generally crunch down in their seats hiding behind blackened windows to avoid detection. What are they afraid insureds will do, print fliers and nail them to every post in the town? Now that’s a thought!

Several years ago, I reported a Unum investigator to the New York City police for using a fake license plate. The over worked police officer yelled into the phone, “Lady, do you know how many illegal plates there are in the New York City?” “Probably too many”, I told him, and hung up.

Some time ago an insured called to tell me he was receiving Hartford disability because he could no longer function as an ER physician. One night upon hearing a loud ruckus below his balcony he watched as Hartford’s investigator pretended he ran his bicycle into a tree and broke his arm. Screaming and writhing in pain, the investigator saw the insured watching from the balcony and continued to beckon for help.

Recognizing the ruse, the insured yelled that he would call 911 for an ambulance. At that point, the investigator picked up his bicycle and threw it into a suddenly appearing van and took off. No broken arm here, but a very cleverly played surveillance drama intended to encourage the insured into rushing to the aid of an accident victim. Do insurance companies really think these tricks work? Luckily, this surveillance didn’t.

Insurance trickery and out-and-out sneakiness often causes claimants to become angry and look for payback. In my early days as a consultant one of my clients phoned to tell me of a surveillance in progress and, “I’m going to get even”, he said angrily before he suddenly hung up.

Later, he called to tell me after locating ol’ grandma’s wheelchair from the cellar, he had his kids wheel him out onto the driveway where after several feet he promptly fell out of wheelchair in pain. Next, after 15 minutes of his kids trying to get him back in the chair, one of his daughters brought him a set of crutches, which of course collapsed and caused him to fall again. From what I could gather this client performed quite a drama for the Unum surveillance team.

Of course, I don’t support his kind of exaggeration because it’s not truthful, but the story does make a good point that surveillance is not considered credible unless it’s secret. Although not supported by me, it certainly is understandable when insureds just get fed up and create their own drama in response!

In any event, Unum’s investigatory Grinch is out there trying to steal your Christmas with surveillance ruse and trickery. Smart insureds are aware of the ongoing possibility of surveillance and manage it accordingly.

Don’t let Unum’s bad Grinch steal your Christmas joy and celebration with surveillance. If I remember the story correctly, the Grinch doesn’t win in the end, and a bah-humbug to Unum anyway!

Friday Q & A

Q&AWhat are Unum’s LTD survivor benefits?

Questions like this can be easily answered by reading your group policy. Most of Unum’s policies contain “Surviving Spouse” provisions either paying the estate or spouse/children three times the gross monthly benefit. This is a one time benefit and is not payable in the future.

Although policies actually say “three months gross benefit” Unum will, of course, recapture any offset repayments and other monies owed before writing the check to the surviving spouse/domestic partner/estate. In addition, spouses will also receive any fractional benefit amount owed up to the time of death of the insured. The death certificate must be provided to Unum as proof the insured is deceased.

How long does it take Unum to pay 100% of my benefit when workman’s’ comp stops paying me?

Once Unum is provided with a pay stub indicating “final payment” or the worker’s comp settlement indicating cessation of benefit, Unum should begin paying full benefit as of the next check. I don’t recommend allowing Unum to go beyond the next benefit period without asking why you aren’t receiving full benefits. This also applies to SSDI dependents who turn 18 and other offsets that are removed. In the past Unum was right on time removing offsets and paying full benefits, but in the last year or so the company has become extremely lax in its ability to do things on time. We recommend that insureds and claimants follow-up with Unum on a frequent basis until full benefits (and any retroactive underpayments) are paid.

Does Unum prosecute insurance fraud?

Yes they do. Also, please keep in mind that as a licensed consultant I am required to report insurance fraud as well. DCS, Inc. continues to recommend truth and honesty in all our dealings with insureds and claimants. Beyond that, insurance fraud is a felony and can be prosecuted as such. Insureds and claimants should be truthful and honest in all their dealings with insurance companies.

My Unum check is already late. What do I do?

Call customer service and ask when your check will be released. Do not get into any verbal discussions with the claims handler if you’ve requested all communications in writing. I’ve learned that the best way to alleviate claimant stress is to call Unum Customer Service and say, “When can I expect to receive my check.” In most instances Unum checks are late because claims handlers take holiday PTO leave and “forget” to approve benefits due while they are gone. It’s OK to call though and make a simple inquiry as to when the check will be received.

My Unum STD was recently denied. It doesn’t seem reasonable that short-term disability is rejected. Any thoughts, Linda?

You are absolutely correct in that it does not seem reasonable to deny STD particularly when there is no financial reserve (or minimal) associated with STD. However, Unum and other insurers, particularly Prudential, look to the future and have patterns of practice of denying STD within 2-3 weeks of the maximum duration so that claimants fail to meet the LTD Elimination Period. Unum denies STD because of an internal “frame of mind” that earlier a claim can be denied, the easier it is.”

My opinion is that insurers deny STD to avoid incurring the more expensive liability of LTD that follows. The best thing for insureds to do is make absolutely sure physicians are providing updated medical notes on a regular basis such as every two weeks. The most common reason insurers deny STD is due to lack of frequent submissions of patient notes.

In any event, there’s no doubt but that insurers have quite a few internal protocols to avoid paying LTD. Unfortunately, denying STD is considered the best way to do it.

Hand in the Cookie JarI received several phone calls from insureds asking the one hundred-dollar question I hear so often. “How can the insurance company deny my benefits when my physicians certify I am totally disabled?” The culprit is “discretionary authority” and it is the primary reason why I write multiple posts recommending insureds and claimants not depend on private disability insurance for financial protection long-term. Still, many insureds just don’t get it.

“Discretionary authority” is given to insurers by the states to interpret policy language and make decisions concerning who gets paid and who doesn’t. Although discretionary authority has been pooh-poohed by the National Association of Insurance Commissioners for many years only 20 states have either passed laws or department insurance regulations which abolish discretionary clauses. These states are CA, CT, HI, ID, IL, IN, KY, ME*, MD MI, MN, NJ, NY, OR, SD, TX, UT, VT, WA and WY. (*As I understand it, ME banned discretionary authority for health policies only. Makes sense since Unum has a large facility here. There are reports that as of November 2014 seven more states have also banned discretionary authority.)

Notice that the remaining states that still support discretionary authority are mostly those from the deep south such as FL, SC, NC, GA, LA, or PA, OH and NY. Apparently, NY was ready to ban discretionary authority some years ago but changed its mind after the dust settled on the Unum multi-state settlement and Elliott Spitzer left office as Attorney General. (I’m hoping by now New York has banned discretionary authority, but it’s unclear to me whether the information I have is accurate.)

“Discretionary authority”  allows insurers to keep their hands in the cookie jar with a conflict of interest as both reviewers and payers of claims. Recognizing that disability insurers earn profit by NOT paying claims they are free to “stack the deck” and decide anything they want in order to bolster profitability at the expense of those they sell policies to.

Although discretionary authority is generally associated with ERISA polices, it has been pointed out to me by Unum on several occasions that the policy language contained in Individual Disability policies such as, “proof acceptable to Us” is also a statement of discretionary authority. The difference is that discretionary authority in ERISA policies allows judges to render “arbitrary and capricious” decisions holding insurers accountable for violations of fiduciary duties. DI policies have no presumed fiduciary duties other than to act in “good faith and fair dealing.”

So where are we? Disability insurers (Plan Administrators) have the right to interpret the policy and decide for themselves who gets paid and who doesn’t. Simple. In states where discretionary authority still exists, insurers can create internal strategies and protocols “stacking the deck” against claimants and there isn’t a darned thing insureds can do about it, but hope to win in litigation. That is, of course, if their monthly benefit is high enough ($5,000+) to attract attorneys to their case.

Although disability contracts are called “contracts of adhesion” because claimants and insureds have no control over provisional coverage; and are supposed to be given special deference in litigation, they rarely are won by even the most skillful of attorneys. Again, discretionary authority allows disability insurers to make decisions adverse to claimants and get away with it with the full support and approval of the states that haven’t taken any steps toward banning the practice.

In my opinion, insureds and claimants need to sit back and think about this for a moment and really understand what I am trying to explain. 

You are given group STD/LTD coverage from your employer and have no say in what kind of coverage it is. You are not a party to the actual Plan and are only provided with an “SPD” (Summary Plan Description of benefits) and a Certificate Booklet. When a claim is submitted, the insurance company has complete authority to decide, regardless of the reports from your physicians, whether you will get paid or not. The only accountability your insurer has is to allege it provided an objective administrative review that was not arbitrary or capricious.

For Individual Disability, medical proof provided must be “proof acceptable to Us”, or DI insureds won’t get paid either.

For ERISA claimants, arbitrary means “subject to individual will, judgment or whim without restriction in the exercise of power”; capricious means “subject to, led by, or indicative of a sudden odd notion, unpredictable change or direction.” Thus, when Unum pays a claim for 10 years and then suddenly denies it, Unum’s actions could be said to be capricious. Thus, an arbitrary and capricious action could hypothetically be one in which a disability insurer unreasonably exercises its absolute power to deny claims by changing its primary plan direction in an unpredictable and sudden manner.

Although the National Association of Insurance Commissioners banned discretionary authority as unfair conflict of interest, the NAIC has no authority to compel any state or entity to enact its Model Acts. The NAIC may set standards, but these same standards are unenforceable.

I’m wondering at this point whether it’s wise for the American working class to put all their eggs in the group LTD basket relying on disability benefits for sole support long-term. Insurers literally have their hands in the cookie jar by selling group coverage they never intend to pay on.

Terms such as discretionary authority and arbitrary and capricious make up thousands of pages of legal commentary citing case decisions and opinions as to what it means. I prefer to leave that to lawyers who write scholarly articles about ERISA and discretionary authority, but refuse to litigate claims in their own practices [because there’s no money in it].

Bottom line? Discretionary authority isn’t fair and certainly isn’t “good faith and fair dealing.” It deprives insureds and claimants of fair and equitable review without conflict of interest or bias. Remember, disability insurers may decide for themselves how their policies should be interpreted, and who gets paid and who doesn’t.

Therefore, when asking the question, “How can my insurer deny my claim when my physician supports disability?”, claimants and insureds need to remember the hand in the cookie jar that both sells disability policies and decides who gets paid.

Since insurance profit is earned by NOT paying claims and minimizing risk, claimants never get a fair deal when insurers bolster profit by deciding for themselves what claims to pay and those to deny.

Disability insurance isn’t a fair playing field and those depending on private disability coverage need to realize that with all the insurer hands in the cookie jars, there are no cookies left for them. Placing full confidence in group disability insurance may turn out to be a very unwise decision.

FMLAEmployees who are recently disabled often have a difficult time understanding how FMLA integrates with private disability, STD and absence from work. Contributing to the confusion are employers with complicated benefit programs that are unclear about what FMLA means specifically to employees who are medically impaired. Unfortunately, claimants often attribute a great deal of importance to FMLA when in fact the law affords little protection beyond 12 weeks and those who transition to LTD.

To simplify, FMLA is “unpaid” leave available to employees if they have worked for their employers at least 12 months, at least 1, 250 hours over the past 12 months, and work at locations where the company employs 50 or more employees within 75 miles.

Therefore, employers must provide up to 12 weeks of unpaid leave each year for any of the following reasons:

  • For the birth and care of a newborn child;
  • For placement with the employee of a child for adoption or foster care;
  • To care of an immediate family member (spouse, child, or parent) with a serious health condition;
  • To take medical leave when the employee is unable to work because of a serious health condition.

Employees who apply for STD/LTD can be asked to complete separate paperwork for FMLA, but in most instances, FMLA applications are completed by employers with the exception of the medical sign-off by treating physicians. FMLA runs consecutive to STD for a period of 12 weeks and is UNPAID leave.

The significance of FMLA to those on STD is that employers are required to “hold” job positions and continue to pay employee benefits for a period of 12 weeks. At the end of the 12 week period, employers generally send out written notification to employees notifying them that if they are unable to return to work their employment will be terminated.

Although DCS continues to receive calls from claimants when they receive “termination letters” from their employers after 12 weeks, the inevitable  always happens when claimants transition to LTD and are unable to return to work. Employers are required to offer COBRA to employees although it is largely unaffordable to most.

FMLA leave can be either “intermittent ” or “reduced” leave. “Intermittent leave” is taken at different times since FMLA is not required to be taken consecutively. Therefore, employees who are in and out of work frequently within the year may take FMLA leave for short periods of time until 12 weeks have been exhausted. “Reduced leave” is applied to employees who return to work part-time. Many employers track FMLA leave by using 480 total FMLA hours (12 x 40 hours).

Employers have the right to “re-certify” medical disability every 30 days. What most employees may not realize is that if they are unable to return to work after 12 weeks, employers may recoup (in some cases) all payments made by the company to continue employer’s health coverage while they are on leave. DCS nearly avoided such a situation recently when an employer could have reduced STD payments by all health insurance paid for by the company.

Employers also have the right to require employees to take paid vacation and personal leave in conjunction with FMLA. Doing so does not extend the 12 week max for FMLA.

Employees may file FMLA complaints with the U.S. Department of Labor’s Wage and Hour Divisions alleging a violation, or may file a private lawsuit against their employers. The statute of limitation is two years from the last act the employee contends violated the law, or three years if the violation can be proved to be willful.

President Bush amended FMLA for the first time in 15 years by extending FMLA to 26 weeks for a “qualifying exigency” under the National Defense Authorization Act. A “qualifying  exigency” is defined as “providing assistance to families who must prepare for, and deal with, a service member’s deployment. FMLA is also extended to 26 week for next of kin caring for covered service members with serious injury or illness.

Employers now have more authority to determine how long they will “hold” positions before terminating employees. However, it is unwise for LTD claimants to assume employers will hold their jobs open indefinitely.

Federal law requires employers who terminate employees eventually to offer COBRA to employees. COBRA health insurance contains up to a 40% administrative cost to the employer that makes the insurance unaffordable for many. However, those who have private disability insurance can go to the Health Marketplace and purchase much cheaper health insurance until they become eligible for Medicare from SSDI awards.

There are also claimants who may misconstrue the Americans with Disabilities Act with FMLA. Under ADA, employers are required to provide “reasonable accommodation” to disabled employees, but leaves it up to employers to decide for themselves what is “reasonable or not.” In fact, ADA has a long list of “outs” employers can use to NOT provide reasonable accommodations and attorneys run as far away from ADA lawsuits as fast as they can.

Although employers seem to make a big deal out of FMLA its significance to those who cannot return to work after 12 weeks is minute.

All claimants should keep in mind that regardless of how supportive employers appear to be at first, eventually they need employees who are able to perform jobs as they are required to be performed by employees who essentially are on the job everyday. No employer will keep your job open indefinitely.

Daily Buzz


Unum Sending Nurses to Physician’s Offices? Yikes!

Reliable reports received from Unum insureds indicate the company may be sending nurses directly to treating physician offices for the purpose of interrogating them for information. Now that physicians are more “in the know” about Unum and are refusing to take phone calls, Unum has resorted to sending out RNs to conduct medical field visits.

This isn’t something entirely new for Unum. In the days when GENEX was used by Unum for many different reasons including medical triage of claims, vocational TSAs and medical review services, RNs did in fact visit physician’s offices unannounced to obtain records and conduct interviews.

The question, however, is whether it is appropriate for RNs to conduct medical interviews with board certified treating physicians to determine if patients/insureds are able to return to work. Although some physicians might know enough to toss them out, it seems logical that some physicians might also feel obligated to speak with them.

DCS is recommending to others that they speak with their physicians about the possibility of a medical insurance intruder and together decide how such situations are to be handled. Clearly, physicians have the right to charge fees for such interviews and services, but they also have the right to refuse any interaction with insurance representatives who “pop up” unexpectedly.

Both insureds and their physicians should have an agreed upon plan of action for such situations and my recommendation is to discuss it with your physician before a Unum RN arrives on his/her front step unannounced.

Year-end Targeting

2014 appears to be year in which all insurers are engaged in frenzied internal protocols and “focus days” to find claims they can deny by year-end. As most insureds are probably now aware they have been asked to provide updated information even when requests appear to be off normal schedules for updates.

The key to surviving these frenzied and chaotic claims reviews is for insureds and claimants to keep level heads and not panic. DCS is recommending to insureds that they provide only the information asked, and treat the requests for additional information as routine. Remember, the more YOU make out of situations and issues, the more insurers will do the same. If there is no particular reason to bring attention to your claim, insurers will not really pay attention.

Although deliberate targeting of claims is an unfair and often illegal process, insureds can manage additional requests for information without escalating the process.

Employer Harassment

Although most employers are initially sympathetic with employees who cannot work, there are still some that treat employees horribly when disability becomes an issue. Disabled employees who choose to remain at work part-time, or those who request work accommodations should keep journals and logs of employer incidents, meetings and conversations for the record.

Claims later filed with EEOC or state Human Rights Commissions are much better supported when logs documenting specific dates and meetings can be produced as evidence. Employers can very easily cross the line by discriminating against those who need on the  job help. It can take the form of mental harassment, threats of job termination, segregating from peers, and even physical abuse.

No employee should have to endure harassment by an employer and claims should be filed with the EEOC and Human Rights Commissions as soon as possible.


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