Filing for Social Security Disability Income Benefits and Group Long-Term Disability Benefits

If you become ill or injured and experience a disability that keeps you from performing your job duties, the financial burden can be great. However, there are options for seeking an income in these situations. One is claiming disability benefits through the Social Security Administration (“SSA”) also known as Social Security Disability Income (“SSDI”). Another is filing a claim with your disability insurer concerning a policy you have through an employer-sponsored group disability insurance plan.

You can file these claims simultaneously to maximize your disability benefits. It is a good idea to understand how SSDI and long-term disability claims may impact each other.

Qualifying for SSDI versus Group Long-Term Disability Claims

SSDI is a Social Security benefit. To qualify for this benefit, you must have earned enough work credits in jobs that qualify as work under the SSA. You can earn up to four credits a year and usually need 40 total credits to qualify for this benefit. Half of those credits must have been earned 10 years before your claim.

The SSA also has policies regarding a qualifying disability. SSA only pays SSDI claims related to total disability, and the definitions are fairly stringent.

A group long-term disability claim on the other hand is one that you file with an employer-sponsored short-term or long-term group disability policy. Typically, to qualify for these benefits, you must be a policyholder who was actively working full-time and meet the definition of disability under the insurance plan. In many cases, long-term disability insurance plans have disability requirements that are less strict than those of the SSA. For example, most group long-term disability policies pay disability benefits in the first two years of disability if you are unable to perform the substantial duties of your occupation. To qualify for SSDI, you must be unable to engage in any substantial gainful activity due to a medically determinable physical or mental impairment that is expected to last at least 12 months or result in death. This means you cannot perform your previous work and your condition must prevent you from adjusting to other forms of work that exist in significant numbers in the national economy.

If Your SSI Disability Application Is Denied, Does It Impact Your Group Long-Term Disability Claim?

Generally, a denial by the SSA does not negatively impact a claim with your long-term disability insurance plan. This is because the SSA has requirements for SSDI that may not be relevant to your insurance plan.

For example, consider a hypothetical situation wherein someone has returned to the workforce after a seven-year hiatus. That person may not have the work credits necessary to qualify for SSDI. However, if they have purchased an ERISA disability insurance policy through their employer, their lack of work credits would not be relevant to payouts under that plan.

If You Get SSDI, Can It Impact Your Claim For Group Long-Term Disability Benefits?

Conversely, if you are successful in receiving an award of SSDI benefits, this can have a significant impact on your long-term disability claim—particularly if you have to bring the matter to court.

Many long-term disability plans contain clauses that allow the disability insurer or plan administrator to reduce benefits dollar-for-dollar by amounts paid out by the SSA for SSDI benefits. This means that if you qualify for SSDI benefits, it will likely reduce, dollar-for-dollar, how much you are paid under your long-term disability policy. It is important to review your long-term disability policy to determine what types of offsets are allowed.

Moreover, if the SSA approves your claim for SSDI benefits, you may be able to buttress your arguments to a court or to a disability insurer, particularly if there is a finding in your favor by an administrative law judge. This is because the SSA has a very strict definition of disability and only pays benefits when it deems you are unable to engage in any substantial gainful activity. It is likely that if you meet the SSA requirements for a disability benefit that you also meet the requirements for a claim under a long-term disability insurance policy, especially where the standard is disability from your “own occupation.”

Courts may favorably consider an award of SSDI benefits as part of the evidence proving your disability when an insurance company has wrongly denied your claim under a long-term disability insurance policy. In some of these cases, the courts have pointed to the existence of an award of SSDI benefits as proof of disability and ruled against the insurance company that wrongfully denied your claim.

However, an award of SSDI benefits does not automatically mean you will win any court battle against your disability insurance company. The courts consider SSDI benefits as a material fact within the context of all other facts in the case.

Hire an Long-Term Disability Insurance Attorney to Help With Your Case

Ultimately, the main takeaway here is that disability insurance claims can be complex. Add in the relationship between SSDI benefits and your long-term disability benefits, and the situation becomes even more complex. It often is a good idea to work with an experienced legal team when dealing with these claims, as a disability insurance lawyer helps you understand your options and what outcomes to expect.

A disability lawyer also works on your side and to support your interests, which is not what you can expect from your insurance company. Unfortunately, insurance companies have other stakeholders to appease, including executive leadership and shareholders. That means there is always a balancing act between paying claims and addressing cost-saving measures that benefit the business’s bottom line and the dividends paid to shareholders.

If your insurance company has arbitrarily denied your claim, consider hiring an experienced legal team to help you fight for the benefits you are entitled to. Contact McKennon Law Group PC to get a free consultation.

Understanding How Pre-Existing Conditions Exclusions in Disability Policies Can Affect A Claim For Disability Benefits

Short- term disability and long-term disability insurance policies are designed to provide peace of mind about your future. If you are injured or become ill to such a degree that you are unable to do your job, disability insurance can help you maintain financial stability.

However, insurance companies commonly deny disability claims based on policy exclusions. After all, the insurance provider exists to make money as a business, and finding ways to avoid paying disability benefits helps their bottom line. Because of this, you may find your claim is denied for any number of reasons, including improper reasons and reasons that are allowable under your policy. One common exclusion found in most disability policies that may allow an insurance company to legitimately deny your claim is the pre-existing condition exclusion.

What Is A Pre-Existing Condition?

A pre-existing condition is defined in a disability policy and typically is defined as any injury, illness, or other health-related condition that was diagnosed and/or treated at a time prior to the policy issuance or the date disability coverage began which later caused you to become disabled. Insurance companies will often establish what is called a “look back period” to determine whether a pre-existing condition existed during that time period. Typically, the disability must occur within twelve months after coverage began in order for an insurer to rely on the exclusion.

For example, say a policy defines the look-back period as 90 days prior to the date coverage began under a disability policy. If the insured is treated for or diagnosed with any injury or illness during that 90-day period and that condition in some way caused a disability, it may be considered a pre-existing condition. It should be noted that the insurance company will interpret “treated” or “diagnosed” as broadly as possible to include even conditions discussed only in passing with your doctor during a visit.

Consider this hypothetical situation: Within the 90-day period before purchasing a disability insurance policy, you are treated by your medical providers three times. First, you are treated for an ongoing heart condition. Next, you are treated for a new complaint of back pain and diagnosed with a slipped disc. Finally, you are treated for strep throat.

Later, you make a disability claim due to a back pain issue that leaves you unable to work. Because you were diagnosed with that slipped disc during the look-back period, your claim might be denied due to a pre-existing condition.

Why Insurance Companies Include Pre-Existing Conditions

Insurance companies include pre-existing condition exclusions in their policies to alleviate risks that people will or may seek coverage under a policy soon after a disability policy is issued or coverage begins. Insurance is not designed to pay for things that have already happened, but to protect you from possible future losses.

How Disability Insurers Use Pre-Existing Condition Clauses Inappropriately

Insurance companies can misuse pre-existing condition exclusions to deny disability claims in a few ways:

• Stretching the definition of pre-existing condition: Sometimes, insurers might argue that a seemingly unrelated past condition is somehow connected to the current disability. For instance, if someone with a history of anxiety files a claim for back pain, the insurer might try to link the two, even if there is no medical basis for it.
• Misinterpreting the “look-back period”: This is the timeframe before your policy’s effective date that insurers examine to identify pre-existing conditions. They might extend this period beyond what is allowed by the policy.

• Exaggerating the severity of past conditions: Even if a relevant past condition existed, the insurer might downplay how well-controlled it was before the disability, exaggerating its role in the current situation.
• Failing to consider all evidence: Insurers might focus solely on medical records that support their denial and overlook evidence that suggests that the medical condition is not subject to the exclusion.

Here are some signs that an insurer might be improperly using the pre-existing condition exclusion:

• The denial letter is vague about why the condition is considered pre-existing.
• The insurer relies on weak evidence to connect a past condition to the current disability.
• The insurer ignores your doctor’s opinion on the limitations caused by your disability.

In a recent case our office handled and which was decided under the Employee Retirement Income Security Act (“ERISA”), the Central District of California concluded that a long-term disability (“LTD”) policy’s pre-existing condition exclusion did not apply after the insurer initially denied a claim for benefits based on the exclusion. The insurance company determined that the claimant was disabled but that his disability was caused by pre-existing conditions. The claimant had previously been treated for anxiety and depression and had been able to continue working with those conditions. He had not been treated for his existing anxiety and depression for some time and at the time he made his LTD claim his condition had become substantially more severe than the common anxiety and depression he had previously experienced; he had developed a new onset of psychosis that left him unable to work.

The court determined that the claim was not excluded from coverage because the insurance company could not sufficiently demonstrate that the claimant’s pre-existing condition substantially contributed to his disability. This case highlights the notion that insurance companies improperly invoke exclusions, including a pre-existing condition exclusion, to deny claims. An insurance company telling you that your claim is barred because of an exclusion does not necessarily make it true.

Get Help From an Experienced Legal Team to Fight Insurance Companies

Fighting insurance companies to protect your rights and assert your valid disability claim can be daunting. It may feel like it is you against a giant corporation—and it often is. However, the right legal team can mean the difference between being paid your claim and not being paid.

At the McKennon Law Group PC, we work with clients to understand their needs and insurance policies, especially disability insurance policies. Then we fight to overcome challenges in your claims process, dispute bad-faith insurance claims decisions, and negotiate settlements with insurance companies. If you or someone you love is dealing with a disability insurance denial or claims holdup, call us for a free consultation.