Too Sick to Work? They Disagree
In the February 10, 2010 edition of SmartMoney Magazine, Brad Reagan writes:
Once employees go on disability, critics say, insurers today are more likely to require hour-long chats on the phone, hound patients for medical updates and push them back to work as soon as possible—often clashing with doctors who think the workers need more recovery time. “These claims are now managed, whereas they used to just be monitored. It can be very intrusive,” says Terry Smith, a principal in Mercer’s health and benefits practice.
To be sure, the disability battle is complex . . . . In 2004 and 2005, insurer Unum Group agreed to pay $24 million in fines to various state regulators over its handling of disability claims. In addition, the company agreed to review previously denied claims between 1997 and 2004—and ultimately reversed 42% of them in the patient’s favor.
. . . In 2004 and 2005, insurer Unum Group agreed to pay $24 million in fines to various state regulators over its handling of disability claims. In addition, the company agreed to review previously denied claims between 1997 and 2004—and ultimately reversed 42% of them in the patient’s favor.
Disability Benefits Terminated Due to Facebook Photos
The Canadian Broadcasting Corporation has reported that Nathalie Blanchard, who had been on long-term disability leave from her job at IBM due to depression, had her benefit payments terminated after she posted photographs of herself on Facebook that depicted her vacationing, having fun at Chippendale’s and enjoying her birthday party. Her insurer, Manulife, confirms that it uses Facebook as a tool for investigating its insureds. Ms. Blanchard contends that her doctor advised her to engage in fun activities to combat depression. The story is a reminder to insureds to be aware of insurance company surveillance. The CBC’s full article can be read here: http://www.cbc.ca/news/canada/montreal/depressed-woman-loses-benefits-over-facebook-photos-1.861843
New York Times Exposes Biased and Incompetent “Independent Medical Examiners”
A New York Times article published March 31, 2009, exposes the biases and lack of competency of certain “independent medical examiners” used to deny disability claims. The article is available here.
ABC News: Man With MS Fights for Long-Term Disability Insurance
Good Morning America recently featured a story about an accountant from Florida, Chris Tucker, who had been diagnosed with Multiple Sclerosis by 11 doctors, having difficulty collecting his long-term disability insurance benefits from Standard Insurance Company because Standard’s doctor – who had never even met Mr. Tucker — did not believe there was sufficient evidence to support the MS diagnosis.
Chris Cuomo of Good Morning America investigates the story, and the issues surrounding doctors on insurance company payrolls, in the ABC News article below.
https://abcnews.go.com/GMA/TheLaw/gma-answers-man-ms-fights-long-term-disability/story?id=6689847
$60 Million Verdict Against Unum and Paul Revere
In Merrick v. Paul Revere, a Nevada jury returned a bad faith disability verdict against Unum and Paul Revere in the amount of $60 million. The prior jury had returned a verdict of $11.65 million, but Unum appealed and a new trial was ordered. The second trial focused on the proper punishment for Unum and Paul Revere, based on an alleged longstanding scheme to improperly deny and terminate legitimate disability claims. Like Nevada, many states (including Arizona, California, Pennsylvania, Florida, New Mexico, Montana and Vermont) have viable “bad faith” laws that allow claimants to sue in court for extra-contractual damages, including punitive damages.
AAJ Names Ten Worst Insurers
The American Association for Justice (AAJ) recently released the report The Ten Worst Insurance Companies in America. The AAJ reached its conclusions after a comprehensive investigation of insurers’ legal and financial filings.
Read the entire report here: https://www.justice.org/ten-worst-insurance-companies-america.
Cigna Denies Breast Cancer Survivor Disability Benefits
A Good Morning America (GMA) episode has caused some commotion within the disability insurance industry. GMA recently aired the story of a breast cancer survivor, Susan Kristoff, who was wrongfully denied disability benefits by Cigna Group Insurance, her disability insurance company. Even though Susan was diagnosed with stage 4 metastatic breast cancer by her doctor, who also said she could no longer work, Cigna refused to honor Susan’s disability claim. The GMA story tells how Susan went from battling breast cancer to battling her disability insurance company for her disability benefits.
After the episode aired, GMA began receiving numerous e-mails from disabled people across the country that were also unfairly denied disability benefits by Cigna and other disability insurance companies. The stories are eye-opening. One disability insurance lawyer in the article said the numerous e-mails was more evidence of disability insurers’ bad faith in administering claims: “The insurance companies know if they deny and deny claims that many of the claimants will never pursue their claims.”
More details from the story can be found here: http://abcnews.go.com/GMA/story?id=5257491&page=1#.T_tOGfWmqZR
California Insurance Commissioner Labels Unum
an “Outlaw” Insurer as the California Department of Insurance Fines Unum $8 Million
When the insurance commissioners of 48 states agreed to a $15 million multi-state settlement last year against Unum, California Insurance Commissioner John Garamendi rejected the settlement, stating that it did not go far enough to protect California insureds. This week, the California State Department of Insurance instead fined Unum $8 million, the largest settlement in the agency’s history, with Garamendi calling Unum an “outlaw company” that harmed consumers by denying their disability claims.
This company engaged in a strategy to increase its bottom line at the expense of its customers. — California Insurance Commissioner John Garamendi
State regulators determined that UnumProvident misinterpreted job classifications, improperly overruled doctors’ opinions and knowingly used incorrect insurance definitions to avoid payment of disability benefits owed to insureds.
While the multi-state settlement required Unum to reopen 215,000 claims and pay a fine of $15 million, the $8 million California settlement includes a third-party review by insurance experts, limits the discretion insurers have to interpret policy language and establishes a model policy that Unum and other disability insurers will be required to adhere to in California.
Federal Court Affidavit of Former Unum Employee
A sworn affidavit by a former UnumProvident employee in a 2004 case in the United States District Court for the District of Maine (Case No. 2:2004cv-00001) provides interesting insight into some of the tactics used by Unum. Daniel Donatelli’s affidavit appears below.
UNITED STATES DISTRICT COURT
DISTRICT OF MAINE
Daniel Donatelli, Plaintiff vs. UNUMPROVIDENT CORP., Defendant
Civil No. 04-1-P-S
AFFIDAVIT OF DANIEL DONATELLI
NOW COMES Daniel Donatelli and hereby states as follows under oath:
- My name is Daniel Donatelli. I am 18 years of age or older and believe in the obligation of an oath. The facts stated below in this affidavit are based on my personal knowledge.
- I was hired by Unum as a Disability Benefit Specialist to process long term disability claims. Disability Benefit Specialists at Unum had authority to make decisions on claims.
- After Unum’s merger with Provident, I became a customer care specialist and later was transferred to the Cardiac Psych Unit. Customer Care Specialists at UnumProvident did not have authority to make decisions on claims including approval, denial, and settlement. Our role became primarily processing and not managing.
- I did not begin working in the Cancer Unit until after February 25, 2002.
- While working in the cancer unit, Dennis Hersom told me that I would not survive a performance management program regardless of any improvement that I made with my work performance. Therefore, I resigned.
- While working in the Cardiac Unit and the Cancer Unit, I had some ethical and moral concerns regarding claims not being paid properly due to the pressure to meet quotas for closing claims.
- While I was at Unum, Unum provided insurance policies for employee sponsored plans, union or employee organization sponsored plans, employer sponsored plans, church plans, government plans, and many individual disability policy contracts.
- There was at least one individual Customer Care Specialist in my Cardiac Psych Unit, as well as an individual in my Cancer Unit, that was responsible for handling claims under individual disability insurance policies issued by Unum.
- I understood that all of these policies were subject to the same claims handling process and procedures. When I expressed concern about how the claims were handled, I was expressing concern for all claims and not just those on my caseload.
- I personally handled processed claims under church plans (for example, priests) and government/school plans (for example, teachers).
- Advance pay and closure was a way of closing claims based on a hypothetical ramp up of hours that was established by a customer care specialist or a vocational rehabilitation consultant. It was also based on an opinion from a UnumProvident doctor who made a determination of what the claimant was capable of doing. I believe that the advance pay and closure procedure is illegal because it could result in a claimant being subjected to higher scrutiny by UnumProvident if the claimant reopened his or her claim for benefits after a period of advancement has lapsed. Because the claimant had no right of appeal, and the claimant was not notified in advance, the claimant would be subject to higher scrutiny thereby misleading the client into agreeing to take an advance pay and close. Continue reading “Federal Court Affidavit of Former Unum Employee”
Disability Insurance and the Doctor:
Will You Be Able to Collect?
Attorney Ed Comitz’s article,“Disability Insurance and the Doctor: Will You Be Able to Collect?”, was published in the May/June 2003 issue of AzMed, the publication of the Arizona Medical Association.
The article focuses on own-occupation policies marketed to physicians, the disability insurance claim process, key policy definitions, the hurdles experienced by disabled physicians (including mental health limitations/exclusions), reasons claims are denied, Arizona insurance law (including elements of bad faith and punitive damages for wrongful claim denials).
