Long COVID and Disability Insurance Claims
Part II

Our previous post looked at the symptoms and diagnosis of long COVID, which may lead to the need to file a disability insurance claim.  While long COVID can now be considered a disability under the Americans with Disability Act (ADA), your disability insurer may not recognize long COVID as a disabling condition (in fact, some newer policies are being issued with a “post-viral syndrome” limitation).

Part of the reason insurers have been successful in avoiding paying out claims based on long COVID is that there are no tests to diagnose post-COVID conditions.  According to the CDC[1], post COVID’s symptoms could be attributable to other health problems.  Further, results from blood tests, chest x-rays, and electrocardiograms may be normal. For example, many symptoms reported by long-haulers can mimic those of chronic fatigue syndrome, another condition that is notoriously hard to prove up, and one which may be subject to a subjective conditions limitation found in some disability insurance policies.

When filing a disability insurance claim for long COVID, it is important to have a supportive physician(s) who can document both symptoms and a diagnosis in medical records.  Your physician(s) will also likely need to submit ongoing paperwork to your insurer, to continue to document your condition, throughout the duration of your claim.  It may also be necessary to submit additional evidence backing up your claim.  This could include a functional capacity examination (FCE) or neuropsychological exam—both of which can be used to demonstrate any limitation you may be experiencing that prevents you from working in your profession.

If you are suffering from long COVID and feel that you might need to file a claim, please feel free to reach out to one of our attorneys directly.

These posts are for informative purposes only and should not be used as a substitute for consultation with and diagnosis by a medical professional. If you are experiencing any of the symptoms described above and have yet to consult with a doctor, do not use this resource to self-diagnose. Please contact your doctor immediately and schedule an appointment to be evaluated for your symptoms.

[1] Long COVID or Post-COVID Conditions, Center for Disease Control and Prevention, updated June 17, 2022

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Proof of Loss Requirements:
A Case Study

As part of the disability insurance claim process, your insurer will ask for various categories of proof of loss to support your disability claim. What happens if you fail to provide all of the requested information? In all likelihood, your claim will be denied.

This was the case in Lipsky v. Principal.[1] Lipsky, a licensed insurance agent, filed a claim for residual disability with his insurer, Principal. In reply, Principal asked for evidence demonstrating Proof of Loss, including claim forms, proof of loss of prior earnings, proof of current earnings, medical records and attendance at a interview with a Principal agent. In response, Lipsky submitted one of the claim forms, but none of the additional requested information. Principal went on to deny the claim and uphold its denial when Lipsky did not produce the remainder of the request.

Lipksy, for his part, claimed that had submitted enough evidence to establish his eligibility for residual disability. He also argued that Principal, under Nevada law, could not request specific form documentation. The Court found that Principal was within its rights to request specific information to establish proof of loss and that Lipsky had not provided sufficient information to make a claim under the policy.

The case highlights the importance of carefully reviewing your policy and all communication from your insurer to determine what evidence is required to establish a claim for benefits. An experienced disability insurance attorney can help you determine whether what your insurer is asking for is allowed under the terms of your policy.

If you feel that your claim has been targeted for not meeting proof of loss requirements, please feel free to contact one of our attorneys directly.

[1] Lipsky v. Principal Life Ins. Co., 2:05-CV-0967-RCJ-LRL, 2007 WL 9728677 (D. Nev. March 22, 2007).

Every claim is unique and the discussion above is only a limited summary of the court’s ruling in this case. If you are concerned that your insurer is using any of the tactics above to evaluate your claim, an experienced disability insurance attorney can help you assess the situation and determine what options, if any, are available.

 

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Statements in Policy Applications:
A Case Study

Insurers, such as Principal, may go to great lengths to rescind a policy.

Rescission is a legal principal where insurers can void a policy if there were any misstatements in a policy application. We typically see rescission claims based on the health questionnaire portion of an application, but rescission is not per se limited to misstatements regarding health status.

One such example is that of Nichols v. Principal.[1] Dr. Nichols, a dentist, purchased a policy from a broker she met while still in dental school. She completed the application in the broker’s office, including a telephone interview with Principal to complete the portion of her application regarding her current and past health history.  The policy was issued and delivered to a field office contact, who delivered the policy to the broker.  The broker’s office then obtained her signature on Part D of the Application (Agreement/Acknowledgement of Delivery). Part D included a statement verifying that Nichols had read all the questions and answers obtained during the telephone application interview.

Nichols was subsequently injured in a rock-climbing accident and filed a disability claim.  Principal rescinded Nichols’s policy, stating that she had made misstatements in her medical history and that there was misinformation on her application.  Nichols contested Principal’s claim, and also claimed that she had not received a copy of her application with the policy (as required under Oregon statute).

More specifically, Principal claimed that the policy did contain the application, and the broker claimed that the bound policy received from Principal had been mailed to Nichols. Nichols argued that she should be granted summary judgment, but the court determined there were issues of fact and set the case for trial.

This case highlights the importance of carefully reviewing all answers on your application for disability insurance carefully for accuracy, especially if this information was obtained and recorded via an interview with an insurer.

If your insurer has threatened to rescind your policy, please feel free to reach out to one of our attorneys directly.

[1] Nichols v. Principal Life Ins. Co., 3:19-cv-01047-BR, 2020 WL 3318000 (D. Or. June 18, 2020).

Every claim is unique and the discussion above is only a limited summary of the court’s ruling in this case. If you are concerned that your insurer is using any of the tactics above to evaluate your claim, an experienced disability insurance attorney can help you assess the situation and determine what options, if any, are available.

 

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Long COVID and Disability Insurance Claims
Part I

As more time passes in the pandemic, it is clear that people experience COVID differently.  While some may be clear of the virus within a few weeks, others who have been infected may go on to experience long COVID (also called long-haul COVID, post-COVID and post-acute COIVD).  Just like acute COVID, long COVID can cause a wide range of health issues that can last several weeks, months or even years.

According to the CDC[1], symptoms can vary person to person, but can include the following:

  • Feelings of tiredness or fatigue that interfere with daily life;
  • Post-exertional malaise
  • Fever
  • Respiratory and heart symptoms (chest pain, cough, difficulty breathing or shortness of breath)
  • Neurological symptoms (sleep problems, headache, dizziness, brain fog, depression or anxiety)
  • Digestive symptoms (diarrhea, stomach pain)
  • Joint or muscle pain
  • Rash
  • Changes in menstrual cycles

According to the Mayo Clinic[2], risk factors for long COVID include:

  • Having severe illness with COVID-19 (especially if hospitalized or needed intensive care)
  • Having certain pre-existing medical conditions
  • Having a condition that affected organs or tissues while sick with COVID-19 or afterwards
  • Are an adult

While these are identified risk factors, anyone who has had COVID-19 can have long-term effects—even those with mild illness or no symptoms.

Because long COVID can last a significant period of time, those with it may need to file a long-term disability claim; however, we’ve seen insurers balk at paying such claims.  Our next post will look at filing a disability insurance claim for long COVID in more detail.  If you have been diagnosed with long COVID and are considering filing a disability insurance claim, please feel free to reach out to one of our attorneys directly.

These posts are for informative purposes only and should not be used as a substitute for consultation with and diagnosis by a medical professional. If you are experiencing any of the symptoms described above and have yet to consult with a doctor, do not use this resource to self-diagnose. Please contact your doctor immediately and schedule an appointment to be evaluated for your symptoms.

[1] Long COVID or Post-COVID Conditions, Center for Disease Control and Prevention, updated June 17, 2022

[2] COVID-19: Long-term effects, Mayo Clinic, June 28, 2022

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Great-West Denies Doctor with Kidney-Failure
Due to Late Filing

As part of the Great-West ADA group disability policy, a disabled dentist whose disability claim has been denied may file a lawsuit against Great-West, but only after exhausting Great-West’s appeals process and receiving a final adverse claim decision on appeal.

Unfortunately, it’s often difficult for a dentist untrained in law or insurance to determine when Great-West’s “final decision” has been made; and, importantly, if a lawsuit is not thereafter timely filed within Great-West’s own proclaimed statute of limitations (which may be shorter than limitations periods under state law), the aggrieved dentist risks having his lawsuit thrown out as untimely.  In other words, Great-West can avoid paying a legitimate disability claim based on a contractual technicality.

This is what happened in the case of Parsley v. Great-West.[1]  Dr. Parsley was a dentist with end-stage kidney failure who filed a disability claim with Great-West.  After Great-West denied his claim for benefits, Dr. Parsley filed an appeal, which Great-West denied on March 1, 2014.  Dr. Parsley went on to correspond with Great-West, filing what he thought were additional, supplemental appeals—all of which were denied, with the last denial occurring on April 15, 2019.

Dr. Parsley then filed a lawsuit, hoping to collect benefits for his obviously disabling condition; however, he was unable to do so, and his lawsuit was thrown out by the court.

The Great-West policy states that no legal action may be started “more than three years after the date of the Company’s final decision on the appeal.”  At issue in Dr. Parsley’s case was whether Great-West’s final decision on appeal was in March 2014 or in April 2019.

Great-West argued that the final denial was in March 2014, and indicated that all of its subsequent replies to “claimed” follow-up appeals referred back to the “initial appeal denial,” which was Great-West’s final decision.  Therefore, despite the fact that Dr. Parsley believed he was acting in good faith, and Great-West was actually corresponding with him about the merits of his claim each time he wrote to the carrier, the Court ultimately found that Great-West’s “final” decision was in March 2014.

This case shows the importance of understanding the terms of your disability policy, including how, when and where a lawsuit must be filed, what limitations periods apply to the lawsuit, and what constitutes a final appeal and decision.  All too often disability insureds believe they are acting in good faith, supplying relevant information and trying to work things out, all the while their insurance company is lulling them into not following the rules of their contact.

An experienced disability insurance attorney, representing you from the outset of your claim, and who understands the particulars of your policy, can make sure that you take timely action so that you do not jeopardize your right to collect benefits.

If you have received a denial of your benefits and are considering appealing or filing a lawsuit, please feel free to reach out to one of our attorneys directly, before you unwittingly compromise your benefits.

[1] Parsley v. Great-West Life & Annuity Ins. Co., No. 22-60800-CIV-SINGHAL, 2002 WL 2341166 (S.D. Fla. June 29, 2022).

Every claim is unique and the discussion above is only a limited summary of the court’s ruling in this case. If you are concerned that your insurer is using any of the tactics above to evaluate your claim, an experienced disability insurance attorney can help you assess the situation and determine what options, if any, are available.

 

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Unum Study Shows Prevalence of Mental Health Concerns
in the Workplace

A recent research study conducted by Unum[1] shows that over half of U.S. workers felt mentally unwell in the last year. Experts indicated that health concerns and workplace pressures during the COVID-19 pandemic caused widespread mental health concerns that are expected to carry into the future.

Forty-two percent of the surveyed employees indicated that they needed to take time off work to deal with their mental health; however, almost one-third of workers reported lack of promotion of mental health resources or offerings by employers. In fact, 70% of employees suggested that there was room for improvement for their employers to reduce the stigma of mental health.  According to the study, when employees do seek help, 42% do so only in a crisis, versus seeking support proactively.

As we’ve written before, physicians and dentists can be uniquely susceptible to mental health conditions such as anxiety, depression, and panic disorders, as well as suffering from burnout. These types of claims can be notoriously difficult to prove up, especially given the often subjective nature of symptoms.

Further, even if a doctor is able to file a successful mental health claim, many policies include mental and nervous limitations, which put a cap on the length of time you are able to receive benefits (typically about 24 months).

If you are a professional considering filing a disability claim based on mental health conditions, feel free to reach out to one of our attorneys directly.

These posts are for informative purposes only and should not be used as a substitute for consultation with and diagnosis by a medical professional. If you are experiencing any of the symptoms described above and have yet to consult with a doctor, do not use this resource to self-diagnose. Please contact your doctor immediately and schedule an appointment to be evaluated for your symptoms.

[1] Over half of U.S. workers continue to feel mentally unwell and require time away from work, Unum, June 29, 2022.

 

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Will A Social Security Award
Help My Disability Insurance Claim?

Will being approved for Social Security Disability Insurance help your disability insurance claim?  Not necessarily, as the case of Bakos v. Unum[1] shows.  The case also highlights the importance of timeliness in filing.

Bakos was initially awarded disability benefits in December 2014, but Unum later told her she no longer met the Plan’s disability definition as of April 14, 2015.  Bakos appealed the decision and Unum upheld its termination on June 27, 2016.

Bakos also filed for Social Security Disability (SSDI) and, after an appeals process, was awarded full benefits on March 2, 2020.  Bakos then requested that Unum re-open the denial of her claim.  Unum declined to do so and Bakos filed suit.  However, Unum challenged the suit as being time-barred because her Plan had a three-year limitation period, which required Bakos to initiate an action challenging the denial on or before that date (in this case August 6, 2018).

The Court ultimately found for Unum, even though Bakos argued that she had never been notified of the three-year statute of limitations.  In part, the Court found that Bakos had not been diligent in investigating issues relevant to her claim, for example by requesting a copy of her Plan.

The Court also concluded even though Bakos believed her SSDI appeal decision vital to her appeal, she “points to no contractual provision showing why her SSDI result would have any material bearing on the timeliness of her Plan appeal.”

In the end, even though Bakos had an argument that she was disabled because of her SSDI award, Unum found a way to ignore this favorable finding.  The case illustrates how insurance companies will look for any means possible to deny a claim, regardless of whether there is bona fide evidence of disability.  An experienced disability insurance attorney can help navigate important requirements that may arise when a claim has been denied.

If you claim has been denied and you are wondering about next steps, please feel free to reach out to one of our attorneys directly.

[1] Bakos v. Unum Life Ins. Co., CV 121-058, 2022 WL 791922 (S.D. Ga. March 14, 2022).

Every claim is unique and the discussion above is only a limited summary of the court’s ruling in this case. If you are concerned that your insurer is using any of the tactics above to evaluate your claim, an experienced disability insurance attorney can help you assess the situation and determine what options, if any, are available.

 

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Am I Working In My Specialty?
A Case Study

Specialty-specific disability insurance policies allow you to collect benefits if you are no longer able to perform the duties of your specialty occupation (even if you are working in another medical or dental field).   We often get asked – will I be able to collect on my specialty-specific policy? Will my insurer fairly determine my specialty?

One illustrative case is that of Pak v. Guardian[1].  Dr. Pak, an anesthesiologist, sued Guardian after he was denied total disability benefits. Dr. Pak argued that his specialty was that of a pediatric anesthesiologist and that he was unable to perform the material and substantial duties of his occupation due to migraines and the accompanying symptoms. Guardian pointed to the policy’s plural definition of occupation and asserted a  “dual-occupation defense”, arguing that Dr. Pak had two occupations—anesthesiology and pediatric anesthesiology—and that he would only be totally disabled if he was disabled from both occupations.  In making this determination, in part, Guardian looked to Dr. Pak’s CPT codes.

Guardian argued, and the Court agreed, that just because Dr. Pak had a certification in pediatric anesthesiology, he had not necessarily limited himself to that occupation. The Court explained, “the provision does not state that a claimant’s specialty is automatically deemed their occupation. Viewing the provision in its entirety, it focuses on whether the claimant was restricted to that specialty.”

While Guardian’s analysis indicated that Dr. Pak’s CPT codes indicated that 93% of his pre-disability time and revenue was derived from general anesthesiology procedures, Dr. Pak argued that the CPT codes did not give the whole picture of his duties.  The Court determined that how much time Dr. Pak spent performing the work of a pediatric anesthesiologist (and what that work entailed) was a question best left to the jury.

This case highlights how difficult it can be to collect total disability benefits under a specialty-specific policy, even if you are board certified in a recognized specialty.  If you have a specialty-specific policy and are considering filing a disability insurance claim, please feel free to reach out to one of our attorneys directly.

[1] Pak v. Guardian Life Ins. Co., No. 21-cv-05032-WHO, 2022 WL 410947 (N.D. Cal. Feb. 10, 2022).

Every claim is unique and the discussion above is only a limited summary of the court’s ruling in this case. If you are concerned that your insurer is using any of the tactics above to evaluate your claim, an experienced disability insurance attorney can help you assess the situation and determine what options, if any, are available.

 

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Myasthenia Gravis

Myasthenia gravis is a chronic autoimmune, neuromuscular disease that leads to weakness and rapid fatigue in any of the muscles under voluntary control.  It is caused by a breakdown in the communication between the nerves and muscles.  Specifically, antibodies block, destroy, or alter the receptors for the neurotransmitter acetylcholine at the neuromuscular junction, preventing the muscle from contracting.

Myasthenia gravis is not hereditary or contagious.  It is more common in women younger than 40 and men older than 60.

Symptoms

Muscle weakness with myasthenia gravis worsens with periods of activity and improves after periods of rest.  While it can affect any of the muscles that are controlled voluntarily, certain muscle group are more commonly affected than other.  Common symptoms include:

  • Weakness of the eye muscle (ocular myasthenia)
  • Drooping of eyelid(s) (ptosis)
  • Blurred or double vision (diplopia)
  • Difficulty swallowing
  • Shortness of breath
  • Impaired speech (dysarthria)
  • Weakness in the arms, hands, fingers, legs, and neck

A myasthenic crisis can occur when the muscles that control breathing become weak to the point where a ventilator is required to assist with breathing. About 15 to 20 percent of people with myasthenia gravis will experience at least one myasthenic crisis.

Diagnosis
  • Neurological examination
  • Blood analysis (to look for the presence of abnormal antibodies)
  • Repetitive nerve stimulation
  • Single-fiber electromyography (EMG)
  • CT scan or MRI (to look for a tumor or abnormality on the thymus)
  • Pulmonary function tests
Treatment

While there is no cure for myasthenia gravis, a variety of treatment is available to help manage the symptoms.

Since the thymus gland controls immune function and may be associated with myasthenia gravis, one course of treatment is a thymectomy, with about 50% of individuals who undergo this procedure experiencing remissions.  Other treatments include:

  • Medications (cholinesterase inhibitors, corticosteroids, immunosuppressants)
  • Intravenous therapy (plasmapheresis, intravenous immunoglobulin, monoclonal antibody)

Because myasthenia gravis can improve with rest, and can go into periods of remission, it can be difficult to prove up to an insurance company even if it has impacted your ability to practice to the point you need to file a claim.  If you have been diagnosed with myasthenia gravis and feel you may no longer be able to safely practice, please feel free to reach out to one of our attorneys directly.

These posts are for informative purposes only and should not be used as a substitute for consultation with and diagnosis by a medical professional. If you are experiencing any of the symptoms described above and have yet to consult with a doctor, do not use this resource to self-diagnose. Please contact your doctor immediately and schedule an appointment to be evaluated for your symptoms

Sources

National Institute of Neurological Disorders and Stroke
Myasthenia Gravis Foundation of America
Mayo Clinic

 

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Limited Conditions Provisions:
A Case Study

Musculoskeletal conditions, including back pain, of all different types can be debilitating and seriously impede your ability to practice. However, newer disability policies may exclude or limit recovery for conditions such as carpal tunnel syndrome, arthritis, and diseases or disorders of the cervical, thoracic, or lumbosacral back and its surrounding soft tissue, or sprains or strains of joints or muscles. If your policy contains this type of exclusion, your benefits may be limited to a shorter payout. For example, 24 months, instead of to age 65 or lifetime benefits.

One such example of this situation is the case of Zall v. Standard.[1] Dr. Zall was the co-owner of a dental practice when he began experiencing pain and numbness in his neck and in his thumb, and two fingers in his right hand.  Symptoms of neck pain and numbness began in 2011 and he was evaluated by an orthopedic surgeon and an MRI showed disc herniation at C5-C6 that was contributing to severe foraminal narrowing.  In 2013 the same doctor found Dr. Zall’s symptoms consistent with a herniated disc and intermittent radiculopathy.  Dr. Zall shortly thereafter filed a claim with his insurer, Standard.

In Dr. Zall’s case, his policy contained an “other limited conditions” exclusion that limited recovery for musculoskeletal conditions. Benefits could only be secured if the claim was based on a herniated disc or radiculopathy verifiable with tests (EMGs and MRIs). Standard initially approved Dr. Zall’s claim; however, upon later review Standard determined that the “other limited conditions” exclusion did apply, and stopped paying benefits.

Standard argued that later medical records did not establish that Dr. Zall’s symptoms were any longer attributable to either radiculopathy or a herniated disc. They based this decision on reviews by opinions of four board-certified physicians they had had review the file.  The Court agreed with Standard, indicating that it was neither arbitrary or capricious for Standard to conclude that Dr. Zall’s disability was caused or contributed something else, such as carpal tunnel syndrome or degenerative disc disease.

If you are wondering whether your policy has an “other limited conditions” provision, and how it might affect your claim, please feel free to reach out to one of our attorneys directly.

[1] Zall v. Standard Ins. Co., 21-CV-19-slc, 2021 WL 6112638 (W.D. Wisc. Dec. 27, 2021).

Every claim is unique and the discussion above is only a limited summary of the court’s ruling in this case. If you are concerned that your insurer is using any of the tactics above to evaluate your claim, an experienced disability insurance attorney can help you assess the situation and determine what options, if any, are available.

 

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2020 Benchmark Trends

A recent study published by the Integrated Benefits Institute entitled “2020 Benchmarking Trends”[1] looks at trends in the short-term and long-term disability market.  The dataset included thirteen carriers and TPAs (third party administrators), 10.6 million claims, more than 100,000 employer policies and nearly 1,000 SIC (Standard Industrial Code) codes.

When it comes to long-term disability, the most prevalent conditions leading up to filing a claim is diseases of the musculoskeletal system and connective tissues (accounting for almost 27% of new 2020 LTD claims), followed by neoplasms and diseases of the nervous system.

The study further found that across all U.S. employers, new LTD claims year over year rose by approximately 30 percent (from 8.3 cases per 1,000 in 2019 to 11.3 cases per 1,000 in 2020).  Employees classified as Service Industry employees continued to be the highest contributor to new claims in the benchmarking data.  However, the service sector experienced a reduction in claims.  The study posits that this could be due to the fact that during the COVID pandemic these workers were classified as essential and subject to worker separations due to quarantines, shutdowns, revenue reductions and social distancing mandates, in addition to a general fear of being out in crowds/public.

COVID-19 also effected the results of the benchmark study.  In large part this was due to late CDC guidance on coding, inconsistent condition coding, and irregularly categorized coding. Specific potential COVID-19 related conditions falling into a specific ICD 10 chapter (diagnosis code range Z00-Z99) included ill-defined and unknown cause of mortality, and general symptoms and signs. This chapter had an increase in claim count (2,000) a substantial percentage increase (60%) and accounted for 2% of new claims.  The study surmises that this is where many COVID-10 related cases fall.

[1] Joseph Aller, DHA, MBA, CPA, 2020 Benchmarking Trends, Integrated Business Institute, January 2022.

 

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Legal v. Factual Disability:
A Case Study

Disability insurance insurers often make the distinction between factual and legal disability when evaluating professional’s disability claims.

Factual disability refers to the inability to practice caused by an injury or illness that prevents an individual from practicing in their occupation. Legal disability refers to circumstances where an individual is not legally permitted to continue to practice.  One example of this would be the suspension of a professional license.

Most policies exclude coverage in situations involving the revocation or loss of a license to practice. But what happens if you are both legally and factually disabled—would you still be able to collect on your policy?

One case that examined this very scenario is that of Pogue v. Principal.[1] In his claim for disability benefits with Principal, Dr. Pogue, a physician, indicated that he suffered a nervous breakdown on November 9, 2012 as well as anxiety, and a few other medical issues that prevented him from continuing to practice medicine.

Principal denied Dr. Pogue’s claim, stating that the policy specifically excluded “benefit for any Injury or Sickness which in whole or in part is caused by, contributed to by, or which results from the suspension, revocation, or surrender of [an insured’s] professional or occupational license or certification.”  Principal asserted Dr. Pogue was legally, not factually, disabled because the Tennessee Board of Medical Examiners had suspended Dr. Pogue’s medical license in November 2012.

In its denial letter, Principal acknowledged that Dr. Pogue had documented medical concerns prior to his license suspension, but claimed that it was not until he knew there was an ongoing investigation (that went on to result in the suspension of his medical license) that he actually stopped working.  Dr. Pogue attempted to argue that his license suspension was a voluntary surrender that he agreed to as part of his treatment plan, instead of a cause or contributing factor to his mental condition. However, the Court ultimately sided with Principal.

This case emphasizes the importance of knowing when you are unable to practice due to a physical or mental disability, and not pushing yourself past the point where it is unsafe to practice.  If you feel you might need to file a disability claim, please feel free to contact our attorneys directly to set up a consult.

Every claim is unique and the discussion above is only a limited summary of the court’s ruling in this case. If you are concerned that your insurer is using any of the tactics above to evaluate your claim, an experienced disability insurance attorney can help you assess the situation and determine what options, if any, are available.

[1] Pogue v. Principal Life Ins. Co., No. 3:14-CV-599-CHB, 2021 WL 3354605 (W.D. Ky. Aug. 2, 2021)

 

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Focal Dystonia

What is Focal Dystonia?

Dystonia is a movement disorder in which muscles contract involuntarily, causing repetitive or twisting movements; focal dystonia is where the conditions affects one part of the body only.  It may also be referred to as focal hand dystonia, focal task-specific dystonia, or occupational cramp/dystonia.

Typically, focal dystonia occurs during a specific action or activity (i.e. typing, playing an instrument, writing, manipulating a dental instrument) and worsens with stress, fatigue or anxiety.  While most of hand dystonia is isolated dystonia, it may occur in conjunction with early onset generalized dystonia (about 16% of primary focal hand dystonia spread proximally or contralaterally or become generalized within 8 years).

While focal dystonia can mimic symptoms of overuse injuries (e.g. carpal tunnel syndrome), it actually occurs as a result of changes to how the nerves communicate with the brain, not injuries to the nerves or hands.

What are the Symptoms of Focal Dystonia?

Symptoms, specifically in the hands, can include:

  • Early signs are often mild, occasional and linked to a specific activity (e.g. playing a musical instrument), and may only be noticeable after prolong exertion, stress or fatigue.
  • Involuntary muscle contractions, including in the fingers, hand, forearm and sometimes shoulder.
  • Fingers that clench or curl
  • Hands that freeze or stop moving
  • Fingers that shake
  • Physical disabilities that affect performance of everyday activities or specific tasks
  • Pain and fatigue (due to the constant contraction of muscles)
  • Tremor
  • Permanent malformations (if muscle spasms lead to the constriction of tendons)
  • Depression, anxiety and withdrawal
  • Median and ulnar nerve entrapments are common in dystonia patients
What Causes Focal Dystonia?

The exact cause isn’t known but it may involve altered nerve-cell communication in several regions in the brain, including the basal ganglia.  While the theory is that neurotransmitters are abnormal in people with dystonia, it doesn’t affect intelligence, ability to think or mental health issues.

It can also be a sign of another disease, including Parkinson’s, traumatic brain injury, stroke, brain tumor or disorders that develop in some individuals with cancer, infections, heavy metal poisoning, or reactions to certain medications.

How is Focal Dystonia Diagnosed?
  • Blood, urine or cerebrospinal fluid tests (to reveal signs of toxins or other conditions)
  • MRI or CT scan (to look for abnormalities in the brain such as tumors, lesions, or stroke)
  • EMG or EEG
  • Genetic testing (5-25% of those with focal dystonia have a family history)
What is the Treatment for Focal Dystonia?

Focal dystonia is typically treated by a neurologist who specializes in movement disorders and treatments can include:

  • Small changes to the way a task is carried out (e.g. writing with a thicker pen or holding a musical instrument differently)
  • Physical and occupational therapy
  • Medications
  • Surgery (including deep brain stimulation and selective denervation surgery)

Focal dystonia can interfere with an individual’s ability to work or carry out daily tasks. If you have been diagnosed with focal dystonia and are worried that it may be impeding your ability to continue to safely practice on patients, you should speak with an experienced disability insurance attorney.

These posts are for informative purposes only and should not be used as a substitute for consultation with and diagnosis by a medical professional. If you are experiencing any of the symptoms described above and have yet to consult with a doctor, do not use this resource to self-diagnose. Please contact your doctor immediately and schedule an appointment to be evaluated for your symptoms.

Sources:

Mayo Clinic
Diego Torres-Russotto, MD & Joel S. Perlmutter, MD, Focal Dystonias of the Hand and Upper Extremity, J Hand Surgy Am. 2008 Nov: 33(9): 1657-1658
Dystonia Medical Research Foundation
Healthline
National Institute of Neurological Disorders and Stroke
Medline Plus (National Library of Medicine)
Cedars-Sinai

 

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Ignoring Treating Providers:
A Case Study

We’ve regularly seen insurance companies, in particular Unum, go to great lengths to deny a claim. Tactics can include overemphasizing daily activities, ignoring treating providers, and relying on the opinions of doctors who have not examined the insured.

One example is the case of Chicco v. Unum[1]. Ms. Michelle Chicco worked as a tax accountant until debilitating back pain, as well as fatigue and weakness in her limbs, caused her to be unable to continue at her job. She filed a claim with Unum for long-term disability benefits, which was initially approved. Chicco received benefits for several months and then tried to return to work part-time; however, her symptoms began to worsen as she ramped up to full-time work. Unum reviewed her claim and determined that she was no longer considered disabled and could return to work full time. Chicco appealed this decision and, when Unum upheld the denial, she filed a lawsuit.

As part of their review, Unum obtained the opinion of several doctors who reviewed Chicco’s medical records but did not examine her directly.  Despite her own treating provider’s diagnosis of radiculopathy and fibromyalgia, one of Unum’s experts surmised that her minimal improvement after spinal injections was not consistent with radiculopathy and suggested that the pain was myofascial (and that this myofascial pain should not have prevented Chicco from working).

In response to this report, Chicco submitted an updated letter from her treating provider and an examination performed by a neurologist—who confirmed that her physical examinations were consistent with her reports of pain and fatigue, as well as diagnoses of fibromyalgia and radiculopathy. Despite this, Unum’s reviewing doctor upheld his original conclusion.

Here, Unum’s disregard for the medical records and opinions for physicians who had actually examined Chicco did not go unnoticed.  The Court found for Chicco, indicating that she has submitted both subjective and objective medical evidence of her condition, and inability to work. The Court also found it “significant” that none of Unum’s physicians personally examined Chicco, whereas every physician who had examined her had found her unable to perform her job duties.

In addition to these paper only reviews, Unum also argued that if Chicco’s pain was as severe as she claimed it was, she would have received more serious treatment and would not have been as active at home.  The Court dismissed this argument, explaining that Chicco, before she stopped working, was on an “escalating treatment regimen” including medication, physical therapy, and multiple spinal injections (and was later referred to a spine surgeon for a surgery consultation).  The Court also noted that Chicco reported that she was only able to engage briefly in light housekeeping and self-care tasks—which the Court found were consistent with the severity of her condition.

Too often we’ve seen Unum, and other disability insurance companies, ignore meaningful evidence submitted by claimants (including supporting evidence by treating physicians). If you feel that your insurer may be engaging in these types of tactics, please feel free to reach out to one of our attorneys directly.

Every claim is unique and the discussion above is only a limited summary of the court’s ruling in this case. If you are concerned that your insurer is using any of the tactics above to evaluate your claim, an experienced disability insurance attorney can help you assess the situation and determine what options, if any, are available.

[1] Chicco v. First Unum Life Ins. Co., 20cv10593 (DLC), 2022 WL 621985 (S.D. N.Y. March 3, 2022)

 

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Lyme Disease

Lyme disease is caused by bacteria (borrelia burgdorferi and Borrelia mayonii in the United States) that is spread via a bite from an infected tick.  The signs, symptoms, and progression of Lyme disease can vary from person to person, but usually appear in stages.

Early Stages (3 to 30 days after a tick bite)
  • A rash called erythema migrans (EM) occurs in 70 to 80% of infected people. The rash begins at the site of the tick bite and gradually expands
  • Fever
  • Chills
  • Headache and body aches
  • Fatigue
  • Neck stiffness
  • Swollen lymph nodes
Later Stages
  • Appearance of EM rash on other parts of the body
  • Arthritis with joint pain and swelling
  • Intermittent pain in tendons, muscles, joints and bones
  • Inflammation of the brain and spinal cord
  • Intermittent pain in tendons, muscles, joints and bones
  • Shooting pain, numbness or tingling in hands or feet
  • Episodes of dizziness or shortness of breath
  • Nerve pain
Other Symptoms

Serious but less common side effects include heart problems, eye inflammation, liver inflammation (hepatitis) and severe fatigue.

Diagnosis

Lyme disease can mimic other conditions and ticks can transmit disease other than Lyme disease, so diagnosis can be difficult.  Typically, your doctor will look at:

  • Symptoms
  • The likelihood of exposure to a tick
  • The likelihood of other potential illnesses
  • Laboratory tests that look for antibodies to the bacteria
Treatment

Treatment is a course of antibiotics.  Antibiotics work best when treatment is begun in the early stages of Lyme disease.

For some, even after treatment, symptoms (including muscle ache and fatigue) may persist.  This condition is known as post-treatment Lyme disease syndrome and the cause is unknown.  Unfortunately, treating with additional antibiotics doesn’t help.

Many symptoms of Lyme disease can impede the ability to safely practice and, especially if treatment fails to work, can potentially lead to the need to file a long term disability claim. If you have been diagnosed with Lyme disease and feel you may no longer be able to practice, feel free to reach out to one of our attorneys directly.

These posts are for informative purposes only and should not be used as a substitute for consultation with and diagnosis by a medical professional. If you are experiencing any of the symptoms described above and have yet to consult with a doctor, do not use this resource to self-diagnose. Please contact your doctor immediately and schedule an appointment to be evaluated for your symptoms

Sources:

CDC
Mayo Clinic
Medlineplus.gov

 

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Does Arizona Require My Disability Insurer
to Respond to My Letters?

Disability insurers often utilize the tactic of sending request after request for additional information for you to respond to.  But what happens if you have a question for your insurer? Does your insurer have to respond?

Although it may feel that you are simply sending a letter into the void, Arizona actually requires your insurance company to respond to you. Specifically, your insurer must acknowledge receipt of correspondence within ten days, unless payment is made within this period of time. See Ariz. Admin. Code § 20-6-801(E)(1).

Further, in Arizona, “an appropriate reply [must] be made within 10 working days on all other pertinent communications from a claimant which reasonable suggest that a response is expected.” Ariz. Admin. Code § 20-6-801(E)(3).

In our experience, insurance companies often drag their feet in making a claim decision, especially in high dollar claims filed by dentists, physicians and other professionals.  One way to ensure your case doesn’t end up on the back burner is to continue to engage with your insurance company.

If you have communicated with your insurance company, but aren’t receiving timely replies, please feel free to reach out to one of our attorneys directly.

 

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Atrial Fibrillation

Atrial fibrillation (also known as A-fib or AF) is an irregular, and often rapid, heart rate.  When atrial fibrillation occurs, the heart’s two upper chambers beat irregularly, out of sync with the two lower chambers. Some people will have atrial fibrillation between periods of normal heartbeats (also called intermittent or paroxysmal AF) while others have persistent AF.

Atrial fibrillation increases the risk of stroke five fold (causing about 1 in 7 strokes), and these strokes are often more severe than strokes with other underlying causes.

Symptoms

  • Palpitations
  • Fainting
  • Dizziness
  • Fatigue
  • Weakness
  • Shortness of breath
  • Angina pectoris (pain caused by reduced blood supply to the heart muscle)

Causes/Risk Factors

  • Age (more common over age 50)
  • Gender (more common in men)
  • Race (more common in Caucasians)
  • Other heart diseases and conditions
  • Hypertension
  • Diabetes
  • Thyrotoxicosis (an excess of thyroid hormones)
  • Obesity
  • Chronic kidney disease
  • Moderate to heavy alcohol use
  • Smoking
  • Sleep apnea

Studies have also suggested that stress and mental health issues may cause atrial fibrillation symptoms to worsen.

Diagnosis

Atrial fibrillation is typically confirmed with the following:

  • Physical examination
  • Electrocardiogram (ECG)
  • Echocardiogram
  • Blood tests
  • Stress test
  • Chest X-ray

Treatment

The goal of treatment is to reset the rhythm and control the rate of the heart and to prevent clots in order to decrease the risk of a stroke.  To that end, treatments include:

  • Electrical cardioversion
  • Medicines to control the heart’s rhythm and rate
  • Blood-thinning medications
  • Surgery
  • Medicine and lifestyle changes to manage risk factors (see above)

Given the increased and serious risk of stroke, your doctor may advise you to limit stress, especially since intense stress may cause heart rhythm problems.  Stressors can come from a variety of different sources, including working as a dentist or physician.  If you have been diagnosed with atrial fibrillation and feel that you may need to file a disability insurance claim, please feel free to contact one of our attorneys directly.

These posts are for informative purposes only and should not be used as a substitute for consultation with and diagnosis by a medical professional. If you are experiencing any of the symptoms described above and have yet to consult with a doctor, do not use this resource to self-diagnose. Please contact your doctor immediately and schedule an appointment to be evaluated for your symptoms

Sources:

CDC
Mayo Clinic
John Hopkins

 

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Latest Unum Lawsuit – January 2022 Update

As we’ve discussed before, Unum is one of the insurance companies that gets sued the most for mishandling disability insurance cases. Unum was also the target of a multi-state conduct exam in 2004.  This exam identified several inappropriate claims handling practices, including excessive reliance on in-house medical staff, unfair evaluation of attending medical examiner notes, failure to evaluate the totality of the claimant’s medical condition and placing an inappropriate burden on claimants to justify their eligibility for benefits.

Despite an estimated settlement cost to Unum of around $120 million, we still see them implementing these claims handling practices in an effort to deny legitimate claims.  One such example is the recent case of Gary v. Unum,[1] discussed below.

Prior to her disability, Alison Gary was an associate attorney at a law firm.  Gary was diagnosed with Ehlers-Danlos syndrome (EDS) Type III, an incurable connective tissue disorder.  Common symptoms include joint hypermobility and chronic musculoskeletal pain.[2]  In addition, she was subsequently diagnosed with cervicomedullary syndrome, a condition where pressure on the brain stem causes neurological problems.  In Gary’s case, she suffered cognitive problems, weakness, impaired coordination, bladder problems, numbness, tingling, and other sensory disturbances.  After this diagnosis, her doctor ordered her to stop working immediately (both due to cognitive and physical impairments), which Gary did on December 1, 2013.

Given her symptoms, including her severe neck pain, headaches, cognitive changes, word-finding issues, weakness, sensory loss, and imbalance (among others), a neurosurgeon recommended surgery.  The doctor stressed that the surgery would “not offer a panacea for all her problems” and would only take care of some of her issues.  On October 6, 2014, Gary underwent suboccipital decompression, reduction, and occipitoaxial fusion-stabilization surgery.

Prior to surgery, the doctor estimated that results may take 6 months.   Despite the fact that Gary did not fully recover in 6 months, Unum denied benefits after April 6, 2015.  The Court found that Unum abused its discretion because there was “over-whelming post-surgical medical evidence that anticipated a longer recovery.”

We’ve often seen Unum try to force claimants back to work after surgery—despite limited or insubstantial recovery, based solely on recovery predictions (often made by the insurance company’s own doctors). In reviewing Unum’s conduct, the Court noted that Unum did not conduct an Independent Medical Examination or hire and EDS specialist; instead, Unum relied on hired consultants to conduct a paper review of Gary’s records.  These consultants specialized in orthopedic surgery, family medicine and psychology.

Unum also cherry-picked from the medical evidence.  For example, they ignored statements in medical records that indicated that the surgery would not be a “panacea”.  While there were statements in her records that some of Gary’s conditions had improved after surgery, there were also numerous statements in the records that explicitly explained that Plaintiff was not yet able to return to her employment as an attorney.

When this case was initially heard before the District Court of Oregon, the Court actually found in favor of Unum as it applied a moderate level of skepticism to its abuse of discretion review of Unum’s actions.  However, after being appealed, the Ninth Circuit Court of Appeals remanded the case, stating that the district court should apply a heightened level of skepticism in determining whether Unum abused its discretion.[3]  Under this heightened level of skepticism, the Court found in favor of Gary.

This case highlights that Unum is one of the most aggressive companies in the industry that appears to be reverting back to their old ways.  Other disability insurance companies may follow suit and begin implementing similar practices into 2022, as in the past we’ve seen Unum act as a bellwether of sorts for the industry.

Every claim is unique and the discussion above is only a limited summary of the court’s ruling in this case. If you are concerned that your insurer is using any of the tactics above to evaluate your claim, an experienced disability insurance attorney can help you assess the situation and determine what options, if any, are available.

[1] Gary v. Unum Life. Ins. Co., No. 3:17-cv-01414-HZ, 2021 WL 5625547 (D. Or. Nov. 29, 2021)

[2] NIH Genetic and Rare Disease Information Center, Hypermobile Ehlers-Danlos syndrome, https://rarediseases.info.nih.gov/diseases/2081/hypermobile-ehlers-danlos-syndrome

[3] Gary v. Unum Life Ins. Co. of Am., 831 Fed.Appx. 812, 814 (9th Cir. 2020)

 

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Disability Insurance Claims:
Top 5 Trends of 2021 and Outlook for 2022

As leaders in the professional disability insurance industry, our disability insurance attorneys are committed to keeping dentists, physicians, other attorneys and executives apprised of industry, regulatory, and legislative changes that may impact their ability to collect benefits under “own occupation” disability insurance policies.

In this post, we will be sharing some of the disability claims management trends we have noticed in 2021, discussing some recent surveys of private disability insurers that may explain these trends, and providing our disability insurance outlook for 2022.

For a broader discussion of the history of the disability industry and a discussion of common bad faith tactics and new policy provisions to be aware of, please visit our homepage.

Disability Industry Trends of 2021

Over the course of 2021, there has been a noticeable uptick in claims relating to a variety of factors, including COVID-19’s impact on healthcare practices, sales and operations (particularly dental practices); an uncertain economy with higher unemployment and lower interest rates; and a significant increase in physicians and dentists filing disability insurance claims based on mental/nervous conditions.

Additionally, from the disability insurance industry’s perspective, there are fewer individuals purchasing own-occupation policies, and policyholders are often selecting lower monthly indemnities if they do purchase policies.

The professional disability insurance industry is also facing additional sales obstacles, including aging producers (with younger producers focusing more on asset management), an aging distribution model, nonengaged advisors, and lack of knowledge and training for agents on newer policies.

Disability Claim Trends of 2021

Professionals, such as physicians, dentists, attorneys and executives, have historically pushed through disabling conditions longer than they should—a phenomenon called presenteeism. In the wake of COVID, however, this has changed.

Some dentist practices, in particular, have suffered financial strain due to COVID and related fallout, and many dentists facing COVID shutdowns and disabling conditions have simply decided to file disability claims.  The same holds true for physicians.  Our disability law firm is also seeing more claims for mental/nervous conditions than ever before.

Due to the financial pressures noted above, there has been a noticeable uptick in how aggressive insurance companies are being when investigating and administering own occupation disability claims.

Even if your claim was initially accepted for payment, that it not the end of the process as most disability insurance companies have decidedly changed their orientation to “claim duration,” which means a quick recovery and return to work.  And companies are getting there through what they call “early intervention,” which means the development of information early in the claim, before the insured is represented, that will be helpful in securing a disability claim termination.

Additionally, starting in 2020, our law firm has also noticed that disabled physicians and dentists have started complaining more frequently that their purported “own-occupation” policies ended up not being what their agent described in terms of coverage/limitations.  In the past, agents were held liable for even negligent misrepresentations, but the newer policies now contain language that protects the insurance companies and their agents from liability in this context.

While there are now countless different levels of “own-occupation” policies, nonengaged and/or poorly trained advisors are not explaining the nuances of each policy type to their clients, who are unfortunately being left with inadequate coverage if they ever become disabled.

The 5 Most Common Disability Claim Management Tactics in 2021

In the past, we have seen that insurers under financial pressure have simply wrongfully denied claims, and this still holds true to some extent. However, we are also seeing insurers engaging in other, more creative tactics to reduce the amounts they are paying out.

More specifically, we have noticed that:

1. Disability insurers are conducting more rescission reviews. “Rescission” is a legal principle that allows insurers to void a policy and avoid payment if there were any misstatements made in the policy application—typically in the health questionnaire portion. If an insurer seeks to rescind a policy, they will typically offer to refund your premiums, but in return require you to give up your policy and your disability claim. This is a complex area, and the rules regarding rescission vary in different jurisdictions. If you believe your insurer is conducting a rescission review, you should contact a disability insurance attorney immediately.

2. Disability insurers are approving claims, but refusing to pay benefit increases that the policyholder applied for. This is a similar tactic to the one above, but slightly different. Instead of using rescission to void the whole policy, the insurer seeks to void one or more increases to the base benefit of the policy. So, for example, if your initial benefit was $2,000 and you were later approved for an additional $8,000 in benefit increases, the insurer would approve the claim, but only pay $2,000/month instead of $10,000/month.

3. Disability insurers are seeking to invoke complex provisions to reduce or avoid payment. As we’ve discussed in prior posts, over the last several years disability insurers have made their policies more detailed and complex. New disability policies can contain complex formulas for calculating benefit offsets or partial disability benefits, and these formulas generally are based on the policyholder’s loss of income. However, different companies define “income” different ways in their policies, and these definitions can be vague or overly-generic. As a result, it is not uncommon for a physician or dentist to have income sources that are difficult to categorize under the express terms of the policy. In the past, insurers were more inclined to work something reasonable out in these circumstances; however, lately, they have been more inclined to try to take advantage of these gray areas and construe them in their own favor, to reduce or avoid payment.

4. Disability insurers are revisiting and reinvestigating claims that have been paying for years and years. We have also seen an increase in insurers targeting policyholders who have been on claim for years—particularly mental health claims and claims based on subjective symptoms, such as pain or numbness. The most common approach here is using their in-house doctors to conduct a paper review of the records that results in “uncertainties” about the “ongoing nature” of the disability, or the “scope of limitations.” The insurer then invokes the exam provision of the policy and sends the insured to a doctor of its choosing, who looks for any basis to claim improvement and find that the policyholder is no longer disabled.

5. Delaying claim decisions due to pending information requests. As noted above, some insurers have reduced their personnel at the same time more claims are being filed. Consequently, we are seeing that many claims are being delayed, particularly if the policyholder is not submitting correct documentation at the beginning of the claim. Many people expect the insurer to tell them what information is necessary, but under current circumstances, this is a recipe for going months without any benefits. It is much better to gather everything that is needed and produce it at the outset, to speed up the process and keep your claim from being sent to the back of the queue due to pending document requests.

Out of all of the companies, right now Unum is the company that is standing out as the most aggressive. Unum has been sanctioned in the past for its bad faith conduct, and is currently the disability insurer that comes up the most in our disability case alerts each week.

In the past, Unum has been the insurer that is most willing to take legal risk to avoid payment during times of financial strain. Consequently, we consider Unum to be a bellwether, of sorts, to gauge of how the industry is doing. If Unum is denying more claims and acting more aggressively, it may mean that the other insurers will follow suit in short order.

September 30, 2020 Milliman Survey

Several recent surveys of the major disability insurers may reveal why we are seeing the above trends.

For example, Milliman, a Seattle-based actuarial consulting firm, recently released an annual survey of the U.S. individual disability income (IDI) insurance market for the last five calendar years. Milligan surveyed 15 of the largest private disability insurers, including Ameritas, Guardian, MassMutual, MetLife, Mutual of Omaha, Principal, Standard and Unum. At the time, these insurers accounted for about 90% of the IDI market.

The report is quite comprehensive, but we found the following findings to be the most noteworthy.

  • Overall, the new number of individual disability policies sold in the United States fell to 6.6% (to 270,000).
  • The report showed that new annualized premiums from new policy sales increased 0.4%, to $402 million.
  • Four companies issued over 40% of their new IDI annualized premium in 2019 to doctors and surgeons.
  • In terms of the products offered by 14 companies (either in the policies themselves or as riders), 11 of them offered pure own occupation policies; however, only 8 offered pure own occupation policies for doctors.
  • On average, 14 IDI companies ranked their satisfaction as 3.8 (out of 5) for profitability and 3.1 (out of 5) for sales results for 2020.
  • The insurers identified unfavorable trends in the IDI market, including several around COVID-19, such as uncertainty surrounding COVID-19 and the economy (including lower interest rates and unemployment), the impact on sales, pandemic operational difficulties, and expected increase in lapses due to COVID-19.
  • Other unfavorable trends identified by disability insurers included a 200% increase in claim notices resulting from COVID-19 and risk of disability due to potential exposure to COVID-19, low claim terminations, increasing prevalence in mental/nervous claims, and claim notices that have no premise of sickness or injury (rather claimed economic disability).
  • According to this survey, the long-term financial health of the IDI market also faces several obstacles, including an aging distribution with inadequate succession planning, aging producers (with younger producers focusing on asset management), an aging distribution model, nonengaged advisors, and lack of knowledge and lack of training for agents.

GenRe Report

GenRe, a Berkshire Hathaway reinsurance company, also recently released a report that looked at the 2020 Individual Disability market. While this study looked at sales trends, it also confirmed that disability insurance remains a multi-billion dollar industry.

This study looked at Non-Cancelable, Guaranteed Renewable, Buy-Sell, and Guaranteed Standard Issue product lines for 2019 and 2020.  Sixteen carriers (including Ameritas, Guardian, MassMutual, MetLife, Mutual of Omaha, Northwestern Mutual, Principal, Standard, and Unum) participated in the study. These 16 companies represent $5 billion of in-force premiums.

This study showed that the number of new policies sold by these insurers in 2020 fell 10.8% (to 245,851) and that premiums for the new policies fell about 7% (to $398.9 million).  The benefit amounts for new policies totaled $1.6 billion.

Insurers reported that COVID-19 was responsible for the drop in new sales—in part because producers struggled to close sales without being able to meet clients face to face.

Despite the drop in new sales, the number of insureds letting their in-force policies lapse decreased—likely due to the increased financial uncertainty from COVID. As a result, insurers still realized a net-increase from prior years to the total number of people covered by individual disability insurance by about 1.2% (3.1 million people). Premiums for these in-force policies increased 1.3%, to $5 billion. Benefit amounts for in-force policies totaled $19.6 billion.

Non-Cancelable policies, which are policies that must be kept in force with the same terms and premiums as long as the policyholder makes timely premium payments, represented $4.3 billion (85%) of total in-force premium.  Medical and 4A and above occupations accounted for 93% of non-cancelable new premium. Guaranteed Renewable, where the insurer has the ability to increase premiums, in-force premium was up by 3%, or to $701.3 million.

Outlook for 2022

Based on our recent experience and the surveys discussed above, it is clear that many of the major disability insurance companies are under financial strain right now. The volume of claims being filed appears to be going up, due to COVID, and the companies are not selling as many policies as they have in the past. Consequently, we expect that the disability claim trends we are seeing will continue into 2022.

If you feel that your insurer is delaying payment, or has wrongfully reduced your benefit, please feel free to contact one of our disability attorneys directly, for a free consultation.

Sources:

Allison Bell, COVID-19 Hangs Over Individual Disability Market: Milliman, Think Advisor, Nov. 30, 2021, https://www.thinkadvisor.com/2021/11/30/covid-19-hangs-over-individual-disability-market-milliman/

Roberta W. Beal, FSA, MAAA and Tasha S. Khan, FSA, MAAA, Milliman Report: 2020 Annual Survey of the U.S. Individual Disability Income Market, Sept. 2020

Allison Bell, More People Have Individual Disability Insurance: Gen Re, ThinkAdvisor, May 13, 2021, https://www.thinkadvisor.com/2021/05/13/more-people-have-individual-disability-insurance-gen-re/

Gen Re, U.S. Individual Disability Market Survey, Summary Report – 2020 Results, 2021

Can I Sell My Practice and Collect
on My Business Overhead Expense Policy?

Business overhead expense (BOE) policies cover business-related expenses (e.g. rent, employees’ salaries, utilities, etc.) if the policyholder becomes disabled and cannot work.  But can you sell your practice and still collect BOE benefits?

One dentist tried to do just that in the case of Richards v. Guardian.[1]  Dr. Richards was a dentist and practice owner with BOE policies through Guardian.  Dr. Richards found himself unable to work due to a disabling condition and sold the stock in his practice to an employee.  His employee worried that she would not be able to afford overhead while she increased her clientele and Dr. Richards offered to cover the practice’s expenses for a period of time, believing that his BOE would cover these expenses.  However, Guardian refused to pay BOE benefits.

When Dr. Richards sued, Guardian pointed to policy language stating that the policy only covered expenses “which you normally incur in the conduct of your business or profession.” Dr. Richards argued that this policy language was ambiguous and the phrase should be examined in light of the policies as a whole.  He argued that “business or profession” applied to his circumstances because he remained contractually obligated to pay for the purchasing employee’s overhead expenses, even though he had sold the stock in the company.

The Court looked to the word “conduct” and “your [business]” in terms of plain meaning and ultimately ruled that the policies’ definition of covered expenses shows “the intention that the insured must actually be in business in order to incur covered expenses”. The Court concluded that Guardian did not breach its obligation under the polices because Dr. Richards did not personally “conduct” a business or profession after he sold his stock.

This case highlights the importance of reading and understanding the terms of your policy and how they may affect your ability to file a disability claim before making any changes to your work duties or your practice (including selling it).  If you have questions about how your BOE policy works, an experienced disability attorney can help you analyze the terms of your policy and determine the best transition plan for you and your practice.

Every claim is unique and the discussion above is only a limited summary of the court’s ruling in this case. If you are concerned that your claim has not received a full and fair review, an experienced disability insurance attorney can evaluate your claim and help you determine what options are available.

[1] Richards v. Guardian Life Ins. Co., 161 Or.App. 615 (1999).

 

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