Tag Archives: do

Out of Contract Demands: When You Can Tell Your Disability Insurer “No”

Every disability insurance policy is a contract. With this contract come certain rights and obligations on the part of the disability insurance company and on the part of the policyholder. The insurer promises to pay you disability benefits and you promise to fulfill certain conditions. One of the most important things to remember about this contractual relationship is that if it’s not in your policy, you don’t have to do it.

Often, disability insurers will ask a person filing for benefits to do certain things or provide certain information in order to qualify for benefits. What every policyholder needs to realize is that the disability insurer cannot force you to do something that is not outlined in your policy. There are many examples of disability insurance companies’ demands that may not be required under the terms of the policy, such as:

• That you see a certain type of doctor

• That you undergo surgery for your disabling condition

• That you get a particular treatment or therapy

• That you provide your Social Security or workers’ compensation claim file

• That you attend a certain type of examination

• That you complete detailed descriptions of your daily activities

• That you allow a private investigator into your home

The bottom line is that a policyholder filing for disability insurance benefits should know what their policy requires and what it doesn’t. The best way to be sure an insurer doesn’t get away with making extra-contractual demands is to have a disability insurance attorney review your policy and advocate with the company for your rights.

Obtaining an Arizona Disability License Plate or Arizona Disability Placard

In Arizona, drivers with disabilities may be eligible to receive a license plate with a disability symbol—at no extra fee—or a disability placard allowing them to park in spaces reserved with the International Symbol of Access.

Arizona Motor Vehicle Division form application #96-01014 must be completed and signed by a physician or hospital administrator. In order to receive the disability plate or placard, the applicant must have at least one of several disabling conditions, including the inability to walk 200 feet without rest, inability to walk without assistance, lung disease, or severely limited ability to walk due to an arthritic, neurological or orthopedic condition. Further details are available at the Arizona Motor Vehicle Division’s website.

A disability plate is assigned to one vehicle and remains valid for as long as the medical condition continues. The applicant must be an owner on the title of the vehicle.

A disability placard is assigned to the applicant, for use in any vehicle, and may not be transferred to, or used by, another person.

Great Disability Insurance Cases of the 19th Century: Sawyer v. U.S. Casualty Co.

This post is the first in a series exploring great (i.e. interesting) disability insurance cases of the nineteenth century. Though disability insurance may seem like a modern invention, it originated as early as 1850 in the United States, and 1845 in the United Kingdom. These early cases are not only entertaining to read, but also offer insights into how the field of law developed. It is sad—though not surprising—to see some of the same insurer tactics being used more than a century later.

Today’s great disability insurance case of the nineteenth century is one of the earliest disability insurance cases reported in the United States. Sawyer v. United States Casualty Co., 8 Am. Law Reg. (n.s.) 233 (Super Ct. Mass. 1869), decided in 1869, was a victory for the plaintiff (the insured), and the start of an entire body of law—disability insurance law. (An earlier disability insurance case, from 1867, held that an insured suffering a hernia was not disabled since he could wear a truss, and is decidedly too dull to discuss here.).

The insured in Sawyer, George W. Sawyer, was a farmer in Worcester, Massachusetts. He was unloading corn from his wagon when he fell, striking his back into the corner of the wagon. After his injury, he was unable to perform many of his prior farm tasks, being restricted only to light work in the barn which did not require lifting. Nor could he work more than half a day at those few tasks he could accomplish. Sawyer hired a man to perform the work which he was no longer able to perform, and his son helped out on occasion.

Sawyer had the foresight to have purchased a disability insurance policy, which paid ten dollars per week if he was “absolutely and totally [disabled] from the prosecution of his usual employment.” The question was whether his abilities qualified as total disability under the terms of the policy. Sawyer argued that if he was “wholly incapable of doing his ordinary and usual work,” then it did not matter that he was still capable of doing some of his duties. The insurer argued that if Sawyer was still capable of doing some of his farm duties, then he was not totally disabled.

The judge instructed the jury: “The mere fact that a man cannot do a whole day’s work, or that by a day’s work he cannot accomplish so much as before the accident, is not sufficient to entitle him to recover, but he must satisfy you that for a time, by reason of his accident, he is deprived of the power to do to any extent substantially all the kinds of labor which constituted his usual employment.” The judge explained by way of example that if a farmer was left with only the ability to milk his cows but not to perform the other usual farm work, then he would be totally disabled and entitled to recover. But if the farmer was still able to perform all of his usual work, even if he was no longer able to perform extraordinarily difficult labor which he may have sometimes done in the past, then he was not totally disabled under the policy and could not recover.

In modern language, the judge set the standard as whether the insured was unable to perform all of the substantial duties of his occupation, regardless of whether he could still perform some of his duties.

The jury found for the plaintiff (the insured). Thus, George W. Sawyer was entitled to his ten dollars per week for the maximum duration of his policy, which was twenty-six weeks.

Though today’s disability insurance policies, particularly those for physicians, provide for much higher benefits, the battles remain similar. Insurers regularly contest whether an insured is totally disabled within the meaning of the policy, and try to misclassify an insured’s occupational duties so as to claim that the insured is still capable of performing the duties of his occupation.

We will be continuing this series with other interesting nineteenth-century cases, so check back frequently for other great cases in disability insurance history.

Pop Culture, and a Broader Debate Regarding Disability

With Lady Gaga’s recent Sydney concert featuring her performing in a wheelchair, the question circulating the news is whether she “went too far” and was offensive to those whose physical disabilities require the use of wheelchairs. As Jesse Billauer, founder of the Life Rolls On foundation, told one news organization, “[The disabled], like me, unfortunately, don’t use a wheelchair for shock value.”

Disability groups are divided on whether Gaga’s performance was hurtful, though the outcry has largely been from the influential Billauer as well as the Roman Reed Foundation. The Reed Foundation, which promotes spinal cord injury research, told Gaga via Twitter: “how about using your celebrity status 2 try 2 get us out of wheelchairs. Instead of cruising one. Cool?!” On the other hand, wheelchair user Stella Young commented that, “As wheelchair users we celebrate our chairs in all sorts of ways all the time. If Lady Gaga wants in on that action, more power to her. She did, after all, have quite the mobility issue dressed as a mermaid.” Young continues to say that Gaga wasn’t portraying or mimicking people with disabilities, and she fails to see a statement about disability in Gaga’s actions.

Most disability groups, however, have expressed few concerns regarding Gaga’s stunt. Sue Egan, the executive officer of Physical Disability Australia, told the Sydney Morning Herald that “We’re not that precious about this type of thing. If she used a wheelchair to embellish her act, well as long as she didn’t take it too lightly and it would seem the audience weren’t concerned about it.” Ms. Young told the Herald that “I think that people are overly sensitive and overly cautious about representing disability and I don’t think we should be. If Lady Gaga wants to make statements about disability then she should, because she makes statements about all manner of things.”

Those who were offended may take comfort in the fact that Gaga was egged following her performance.

Read more: http://www.huffingtonpost.com/2011/07/13/lady-gaga-wheelchair-egged-sydney-concert_n_897200.html

Payson Roundup Publishes Article Encouraging Disability Insurance

The Payson Roundup has published an article advising Payson-area retirees as to the personal insurance that their grandchildren should purchase as they begin their careers. Tom Russell, the article’s author, astutely points out that a person is eight times more likely to suffer a disability lasting more than three months than a premature death, and notes that disability causes half of all home foreclosures in the United States. Russell recommends an own-occupation policy, as it provides benefits if the insured is unable to perform his own occupation rather than requiring that the insured be unable to perform any occupation anywhere. We have previously discussed the need for own-occupation policies in greater detail, as it is of great importance should you need to file a claim on your disability insurance policy.

Read the article in the Payson Roundup:


Unum Reports Minimal Exposure to European Debt Crisis

Unum, one of the largest providers of disability insurance, has reported that its investment portfolio has no exposure to Greek banks, which are currently in disastrous financial shape. The insurer has taken a conservative approach, investing primarily in corporate bonds, and as a result, Moody’s Investors Service has given Unum a third-place rating. While other insurers, such as Aflac, have taken heavy losses in their investment portfolios due to the ongoing European debt crisis, Unum is proud to announce that beginning in 2003, the company has placed particular emphasis on investments with predictable returns. As Unum’s senior vice president for investor relations told the Chattanooga Times Free Press, “We make steady, predictable payments, so we want a steady, predictable cash flow.” Unfortunately Unum’s payments to disabled doctors are anything but steady and predictable, as the insurer has a track record of unfairly denying claims.

Read: Unum Sidesteps Crisis

Ninth Circuit Opens Third-Party Insurers to ERISA Liability

On June 22, the Ninth Circuit Court of Appeals ruled for the first time that the Employee Retirement Income Security Act (ERISA) permits beneficiaries to sue third-party insurers. Previously, employees participating in an ERISA (employer-sponsored) disability insurance plan could sue only the plan administrator or the plan itself.

Laura Cyr had received a $85,000 salary before becoming disabled. She subsequently sued her employer for gender discrimination and won a retroactive adjustment of her salary to $155,000. When Reliance Standard—who was the insurer but not the plan administrator—refused to approve a similar increase in her disability benefits, Laura sued to enforce her rights. In Cyr v. Reliance Standard Life Insurance Company, the Circuit Court found that although Reliance Standard was not the plan administrator, appropriate circumstances existed to permit Laura’s lawsuit. Laura Cyr is now authorized to have her day in court to recover her benefits and enforce her rights.

A Case Study in Benefit Denial

We frequently emphasize how important it is to consult with a disability insurance law firm before filing a claim. But what about at the moment when you realize that you’re too sick to work? It is vitally important to consult with an attorney specializing in disability law as soon as possible. A recent case in which the insured was denied benefits illustrates the importance of consulting with an attorney from the very beginning of your illness. There are often clauses in your policy which require up-front strategic planning to preserve your claim. In the case discussed here, the insured found himself possibly covered by two plans but ultimately unable to collect from either.

Paul McKay was employed beginning in 1999 as an attorney at U.S. Xpress, which provided a long-term disability plan to its employees. Prior to January 1, 2004, this plan was provided by Unum. On that date, U.S. Xpress switched disability insurance providers to Reliance. Insurance coverage was supposed to be uninterrupted with employees retaining continuous disability insurance, and in fact it was. But McKay fell between the cracks due to disparate language in the policies.

During his employment, McKay developed significant cervical spine problems, and he eventually underwent surgery in June 2003. Unfortunately between September through December 2003, his condition continued to worsen. At that point he had severe cervical and lumbar disc disease, was frequently absent, and his medication made mental concentration more difficult. His last day of work at the office was December 19, 2003. He intended to work from home during January 2004, but there was no evidence that he was able to do so. U.S. Xpress continued paying McKay his usual salary until January 16 and then fired him on January 19, 2004.

McKay filed a claim with Unum (the insurer prior to January 1, 2004) for disability benefits, contending that he was disabled under the policy. Unum denied the claim. The court affirmed the denial. The problem for McKay was that his Unum policy contained a clause requiring a 20% loss in monthly earnings as a qualifying condition for disability benefits. Unum successfully argued that through December 31, 2003, McKay had not had any loss of earnings as U.S. Xpress had in fact paid him his full salary into January 2004. McKay argued that he may have received his salary but he was incapable of earning it. The court followed the plain language of the policy and regardless of whether McKay earned his keep in December, found no loss and ruled that he was ineligible for benefits.

Reasonably enough, McKay rationalized that if Unum wouldn’t cover him, then he must be covered by Reliance (who took over on January 1). He filed a claim with Reliance, only to discover that Reliance’s policy had two important but often-overlooked requirements: To be eligible for insurance without the usual 60-day waiting period (which would have started coverage on March 1), McKay had to be “actively at work” as of January 1 and his disability had to begin on or after January 1. Reliance denied the claim, asserting that McKay wasn’t “actively at work” because he was not working full-time (at least 33 hours per week) as of January 1. Recall that McKay had attempted to establish his eligibility under Unum by arguing that he had suffered a loss in earnings in December because after December 19 he wasn’t actually earning—just receiving—his salary. McKay’s statements, which had been made in support of his Unum claim, were outrageously used by Reliance to deny him benefits under Reliance’s plan.

The injustice gets worse. As a second reason for denying the claim, Reliance argued that since McKay had asserted a December disability date to Unum, had left the office after December 19, and had since received Social Security disability benefits based on a December 2003 disability date, McKay’s disability began before January 1. Thus, he was ineligible for benefits under Reliance’s plan. The court agreed with Reliance’s reasoning.

On appeal, the Circuit Court affirmed the lower court’s rulings. The Court noted that “McKay argues that because U.S. Xpress maintained uninterrupted LTD insurance coverage during the time period in which he sustained his disability, he must be covered by one of the two policies. McKay’s argument, while somewhat logical, is incorrect. Whether he is covered by either Unum or Reliance, or both, turns on the terms of each policy.” (emphasis added). And so it ends. Paul McKay, who was always “covered” by long-term disability insurance, turned out to not be covered at all. He receives no benefits from either policy, thanks to a coincidence of timing. Each insurer used his statements to the other to deny coverage, leaving him in a no-win scenario.

What can be done differently? Paul McKay should have immediately consulted a disability insurance attorney as soon as he suspected that he might become too ill to work. The attorney could have examined the policies and the upcoming switch in coverage and worked with Paul to develop a strategy to preserve his claim, such as resigning in December and immediately applying for benefits. This case underscores the importance of coordinated planning with an experienced disability insurance attorney.

Disabled-Friendly Apartments in Tempe & Glendale

Gorman & Co, a Wisconsin-based developer, has recently opened a fully accessible apartment complex near downtown Glendale, Arizona. Currently there are only three apartment complexes in the metro Phoenix area which are fully accessible to the physically handicapped. Gorman has plans for two additional complexes in Phoenix and Tempe. These complexes offer features such as keyless entry, higher toilets, and wider doorways. For those suffering from a physical disability, affordable access to such housing is critical.

Read more: http://www.azcentral.com/arizonarepublic/business/articles/2011/06/17/20110617phoenix-arizona-apartments-aimed-disabled.html

Even Athletes Need Disability Insurance

Many physicians have long been aware of the need to buy disability insurance to protect their income from a disabling injury, but physicians are not the only group needing high-dollar insurance policies. Everyone is at risk of a disabling injury. According to statistics, one-third of all Americans between ages 35 and 65 will become disabled for more than ninety days. Athletes are no exception to the norm, though we usually don’t think of Tiger Woods or Alex Rodriguez as owning disability insurance. For the wealthiest athletes, who can earn a living off of endorsements or other business ventures, disability insurance is probably unnecessary. But for most, it is an often-overlooked yet vitally important safety net.

Consider the June 2003 motorcycle crash of Jay Williams, a promising 2002 NBA draftee who suddenly found himself with a mangled leg, hundreds of thousands of dollars in medical expenses, and, because of a certain motorcycle-riding clause in his contract, suddenly out of a salary. The Chicago Bulls charitably bought out Williams for $3 million, but eight years later, he remains unable to return to the game.

Professional athletes all too commonly fail to realize that disability insurance protects their income as much as it protects the income of a doctor or attorney. It’s no surprise that a recent article suggested disability insurance as one of the first things a new professional athlete should buy. Some prepare even before they turn pro: Shaquille O’Neal played at Louisiana State University while covered under a $2.7 million dollar policy. In fact, one of the NCAA’s lesser known programs is its group disability insurance through which exceptional student-athletes can purchase protection against disabling injuries or sickness. Each year, about 75 top athletes buy insurance through the NCAA program.

There are more similarities than differences between the NCAA’s disability insurance policy and physicians’ disability insurance policies. The NCAA caps its benefits at a maximum of $5 million for first-round NFL draft picks and men’s basketball players, a figure roughly equivalent to the lifetime earnings of many physicians (though the NCAA pays the entire benefit over a fixed 30-month period). And like physicians’ policies, the key question is what constitutes a disability? Continue reading Even Athletes Need Disability Insurance