Archive for the ‘Claims Process’ Category

Most employees who are covered under an employer’s group ERISA disability Plan are unfamiliar with Plan provisions and what the Plans actually provide versus what they take away. While employers have a way of selling their benefit packages as “free disability coverage”, an examination of the details point to a very different product.

To begin, Employer ERISA Plans have more adverse provisions than they have favorable ones. Group insurer Plans are formulated to give insurers an interest in not paying claims. Think about it….the same insurer who pays claims also makes decisions as to whether claims should be paid at all. In combination with the fact that profit is realized by NOT paying claims, from claimants’ perspectives, the risk of not getting paid at all is pretty high.

In addition, employer Plans contain adverse provisions from the beginning….24 month own occupation and mental health limitations, limitations for payable benefits as a percentage of pre-disability income, offset or reductions in benefits provisions, restrictions on time limits for providing “proof of claim”, and maximum duration limitations. In addition, ERISA Plans have a federal jurisdiction that excludes bad faith litigation in state courts.

On top of the written failed contractual product, the federal government allows “discretionary authority” giving insurers sole authority to adjudicate the Plan and decide for itself who gets paid and who doesn’t. As if the deck wasn’t stacked enough before, discretionary authority seals the deal to insurance corporate profitability at the employee’s expense.

After the fact, when claims are denied, attorneys often contribute to the problem by charging fees to maximum duration that reduce benefits received to less than 30% of pre-disability earnings. That is, if claimants can find an attorney who will take an ERISA case at all.

What is unfortunate is that claimants often depend on their Employer’s Plan for sole income during periods of disability. While ill, employees are forced into an administrative nightmare of constant paperwork, phone calls, and various requests that often worsen medical conditions, such as stress, anxiety and pain. Claimants are forced to deal with insurance companies, that only care about meeting financial objectives within a certain time period.

Employer provided group disability insurance should never be relied upon long-term to meet 100% of financial needs. It can be terminated instantaneously by the insurer, and clearly is uncertain and unreliable. Litigating ERISA claims is often regarded as an un-winnable process.

Those who have employer-provided Plans should obtain a copy of the Certificate Booklet and read it thoroughly. Know in advance of a disability what you are entitled to and what the insurance company can take away.

ERISA Plans do not represent secure, reliable income and should not be relied upon for family resources. It’s like playing a game of Texas Hold’em when the other guy is holding all the wild cards.

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Guardian seems to be staying in the news lately as the company’s focus on “credibility investigation” reaches over-the-top levels. While no one disputes the right of any insurance company to fully investigate claims, Guardian’s practices exceed investigation levels that would normally be required to determine insureds are “unable to perform their own occupations.”

A good case in point is the insured who was injured as a result of an automobile accident several years ago and who recently claimed disability due to various shoulder muscle tears etc. According to the information I have Guardian’s investigators actually hunt down the driver of the “other car” who promptly said, “the accident was no more than a fender bender and no one got hurt.”

Seems to me the “at fault” driver might have a conflict of interest in reporting a “no one’s hurt” accident, but I have to wonder why Guardian took this line of investigation. If the insured’s medical information certifies the insured’s inability to perform as a dentist today, then what would it matter what the driver of the other car reported?

Guardian also tends to interview ex-spouses, a deliberate attempt to sully insureds’ reputations and credibility. Investigators “show-up” to interview peer workers, or accost them in parking lots with requests for written statements. There does not appear to be any logical reason to investigate the way Guardian does, and in my opinion, it crosses the line of prudent, normal and customary disability claim review.

Guardian’s investigations always seem to focus on credibility in lieu of whether or not insureds meet the definitions of disability in their policies. The company performs complex financial calculations regarding “residual” disability even when insureds are not residually disabled. Misrepresentations of policy provisions are immediately apparent, with little expectation of Guardian reversing its position.

Guardian’s claim investigations obviously have set priorities to investigate to deny rather than investigate to pay. This is the primary difference between fair and equitable insurers and those who seek to discredit insureds at all costs. DMS, Disability Management Services, is also a company who often investigates “credibility” in addition to contract provisional standards.

I can’t tell you what’s happened to Guardian in the last several years, but it’s all been downhill. Professionals looking for private disability and business protection coverage should look more toward Northwestern Mutual products and avoid Guardian’s insane investigations.


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Have you ever wondered how Unum and other insurers seem to find out things? Not only are insurance companies hacking into Facebook, Twitter and LinkedIn accounts, but they seem to have other ways of finding out information about you and your claim. Insurers all stick together regardless of whether their actions are ethical, legal, or not.

Recently, an insured who was injured in an accident received a third-party settlement in which was written a non-disclosure statement. Suddenly, he gets a letter from Unum demanding repayment because his policy offsets “third-party settlements.” Apparently, Unum was sent a copy of the insured’s settlement check either by Traveler’s or State Farm.

In my mind a non-disclosure statement actually means non-disclosure. My guess is that since Unum knew about the insured’s injury they probably contacted both Traveler’s and State Farm and asked to be copied on any settlement. Or, Unum could just have contacted the insurers and asked for information. I’m not discounting other “investigative” means Unum has either, but either way, non-disclosure is still non-disclosure.

It’s not that the insured wanted to hide anything either. But, Unum found out about the settlement quickly which means it already had “information and search” available to it. Upon further investigation it was discovered Traveler’s or State Farm sent Unum a copy of the settlement check. They would not have done this if Unum hadn’t inquired or had an inquiry set up.

Other leaks often come from predictable sources such as ex-spouses with axes to grind, or neighbors when Rover winds up too often on their side of the fence. Today, it seems as though everyone is looking for wrongdoing even when there isn’t any.

Insureds can find themselves in trouble when other family, friends and former co-workers see them loading cases of soda in your trunk and call the Social Security Administration to make a report. (This actually happened.) Today, SSA does have the means to conduct surveillance and place any recipient under investigation.

Unum insists on obtaining SSDI files when claimant are not under any obligation to provide them. There is an information war going on between insurers and insureds because insurance companies believe everyone is filing claims for secondary gain and not keeping them informed.

Insureds and claimants should consider that there isn’t any information out there that can’t be had – legally or illegally. After all, investigators aren’t supposed to peep in your windows but they still do – they just communicate the information verbally and never put anything illegal in writing.

Don’t be surprised when insurers pop up with information you thought was unobtainable. Anything is possible in today’s insurance environment.




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If I were a Guardian/Berkshire insured I would be very concerned and vigilant concerning the company’s interpretation of its policy provisions.

In the last two years I’ve had the opportunity to review several claim situations where Guardian’s claims reps deliberately misrepresented policy provisions in order gain profit advantage at the insured’s expense.

Company reps appear to be engaging in claims practices that are out-of-contract leading me to believe reps are acting on behalf of management directives rather than reading actual contracts. At least one attorney reported to me that she had to petition the state department of insurance to intervene when Guardian refused to pay a claim because the attorney had her client sign a limited Authorization. The DOI agreed with the attorney, but it took nearly 6 months to clear up the issue.

It has also been reported to DCS, Inc. that Guardian’s reps are extremely hostile on the phone when actions are challenged, even to the point of hanging up on the insured. I have personally experienced the same hostility with Guardian which actually does not serve the company well. Insureds who are patient enough to deal at all with Guardian on the phone should opt instead for written communications only.

I know of at least two Guardian claims where the company insists on deducting prior business losses that “do not result from disability” from the PMI calculation. The Guardian scam is to conjure calculate a percentage of prior business losses and apply it to the Prior Monthly Income calculation (PMI) so that in carrying non-existent business losses forward insureds are penalized for future losses that do not exist.

I also previously reported Guardian’s “over-the-top” investigation schemes that exceed standards of investigation normally assumed to be necessary for disability claims investigations. Whatever it is that changed the company’s popular status in the disability insurance industry from 2nd behind Northwestern Mutual to a notable “bad faith” insurer is now obvious to most professionals looking to buy disability protection.

Unfortunately, I would not recommend Guardian’s disability policies to any professional given the company’s current erratic patterns of enforcing policy provisions to favor future business losses that do not exist.

The company is no longer reputable as a seller of disability protection because it no longer adjudicates claims in “good faith and fair dealing.”

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Most disability claims submitted to US insurers are filed by insureds and claimants who do not have a clear or accurate understanding of their policies or Plans.

Although I receive many calls from people who are already “in trouble” with their claims, in most instances there is always a “weak link” that acts like a beacon signaling a claim denial is on its way.

Here is a list of the most common “weak links” contributing to disability claim denials all over the country. If you are managing your claim yourself and can identify at least two of the items below, your claim could be in jeopardy.

  • Lack of clarity, specificity and completeness of medical reporting.
  • Lack of distinction between “primary” and “secondary” diagnoses, or documentation of co-morbid impairments.
  • Treating physicians fail to support continuing form completion and become “not good at it” at time goes on, or tells you to find another doctor.
  • Primary diagnosis of any type of connective tissue disease such as Fibromyalgia, or infectious disease such as Lyme or Chronic Fatigue Syndrome that is not specifically managed in accordance with CDC criteria, or Plan language, or medically supported to counter insurer claims of “self-report.”
  • Insured or claimant continually bombards insurers with long-winded justifications and phone calls defending claim. OVER SPEAKING claim on a regular basis.
  • Using web portal email with insurance tracking software attached.
  • Constant dialog on social media, Facebook, Twitter, LinkedIn, etc. Opening the door to insurance scrutiny and access to personal electronic data. Failure to shut down social media.
  • Insured or claimant communicates by phone or web portal and provides information to insurers that can be used against them.
  • Insureds or claimants who are academically well credentialed who believe they “are in the know” and can manage their claims without specific knowledge or experience with insurance.
  • You have an attorney charging you exorbitant fees to “manage”, but isn’t really doing anything until the claim is denied.
  • Continuing to exceed medical restrictions and limitations and consider surveillance as inconsequential because, “I don’t do anything wrong.”
  • Frequent requests for field visits, and IMEs without proper insured management and preparation. Red flags are obvious, but ignored.
  • Surveillance reports defended with statements such as, “I have good days and bad days”, or “I suffered for a week afterward.”
  • Lack of continual supplementation of Administrative Record. (ERISA claims)
  • DI “own occupation” claims without specific percentage allegations in Job Description detailing material and substantial duties.
  • Insured or claimant is at the benchmark for having limited work capacity but physician fails to specify work and time limitations, or fails to document return to work is temporary as part of a work hardening program.

Although the above list of claim “weak links” is by no means all-inclusive, it does point out what may be brewing on the horizon for claim targeting and termination. Every disability claim has a weak link and it should be identified and addressed.

And by the way, I haven’t necessarily written this post to encourage business, but if you can identify any number of weak links to your claim then perhaps it’s time to hire a consultant with a really good set of pliers.


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Although in the past Lindanee’s Blog lauded the fairness and even-handed claims process of Northwestern Mutual, recent sources indicate the company is progressing into a more typical “private disability chaos” as it attempts to merge its life and disability departments.

Recent reports of frequent changing of claims handlers in combination with paper shuffling, losing paperwork etc. makes life very difficult for insureds who are managing claims themselves.

EMSI, a company hired by NWM to obtain patient notes and other medical information, has become a real problem. Frequent requests to sign Authorizations, going so far as to continuously phone claimants for the same, is disturbing to insureds desperately trying to provide what’s needed.

EMSI just doesn’t give up, and yet requests to NWM’s claims handlers to by-pass EMSI and obtain information themselves is denied because, “this is the way our company wants us to do things.” Chaos is chaos regardless.

I’m actually very disappointed to hear that the aristocrat of disability claims is in such a mess. Let’s hope the company’s disorganization is temporary and it improves after the internal reorganization.

In my experience, though, when insurers fall from grace, it’s usually permanent.

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MetLife’s TPA (Third-Party Administrator) services for The Lincoln National Life Insurance Company’s IDI products follows more unnecessary “investigative” procedures than any other insurer I am aware of. Although no one questions the right of any insurance company to fully investigate claims, investigating purely for the sake of investigating seems to me to be a bit ridiculous.

Recently, a total and permanent disability 2016 claim came to my attention wherein MetLife began demanding tax returns all the way back to 2012. When questioned as to why the company was looking that far back the claims handler said, “We’re trying to establish a PMI (prior monthly income) figure for “Residual” disability.”

“Why do you want to do that”, I replied, “there is no “residual” disability with this claim at all?”

“Well, if this insured goes back to work we’ll be prepared with a calculated PMI.”

This still doesn’t make sense to me. Given the extent of information insurance companies require that IS relevant, it seems a waste of time to continue to investigate issues that have absolutely nothing to do with the unique circumstances of the claim at hand.

Although Mass Mutual and Guardian often do the same thing, it seems unusual that a company as negligent as Met Life requires such investigations. Although MetLife’s core product is group disability, it seems odd that calculations of PMI top the list of priorities for a total disability IDI claim.

To make matters worse, MetLife actually placed the claim under Reservation of Rights for failure to provide old tax returns. Again, very odd in that the tax returns, submitted or not, had no persuasive weight on the claim decision to pay or not pay. This makes one wonder whether MetLife picked this conflict on purpose in order to place the claim on ROR status.

Frankly, I don’t think MetLife’s claims handlers are that smart; and, are most likely blindly driven  by internal management directives to do things a certain way. It could also be true the claims handler was “fishing” down the rabbit hole hoping to find other reasons not to pay the claim.

Regardless, using costly resources to chase claim white rabbits delays payment decisions to insureds looking to receive benefit checks. From insureds’ point of views “tic toc…tic toc”, the payment of benefits is a priority, not continually feeding insurance companies information that is not relevant to their claims.

I’ve no doubt the decision to pay under Reservation of Rights was due to the end of 1st Qtr. results and profitability reporting. Still, if I were a MetLife stockholder I would be concerned that the company engages in investigations for no reason at all.

The good news is that insurance companies who go down the rabbit hole looking for  irrelevant information to deny claims generally don’t come up with anything at all except added costs for “colossal wastes of time.”

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