Field Interviews:
What to Expect Before and During the Interview
Our last post discussed why an insurance company might want to conduct a field visit or field interview. Now that you know what the insurer is trying to accomplish, we’ll discuss what exactly to expect before the interview, during the interview, and afterwards. As with many aspects of the disability claims process, the field interview will be different depending on whether or not you have a disability insurance attorney involved. First, what to expect before and during the interview:
Setting Up the Field Interview
Initially, the field representative will call or e-mail you personally to set up a time to meet. He or she will ask to come to your home, or sometimes your office (particularly if you have been practicing as a dentist or physician), and talk one-on-one. If you’re being represented by a disability insurance lawyer, the field representative will call or write a letter to the lawyer’s office to request a field interview. Your attorney will evaluate whether the in-person interview is necessary and appropriate under the terms of your policy and your particular claim situation. If so, your attorney will likely ask the field interviewer to meet at the attorney’s office, rather than in your home or office. Your attorney, and sometimes an assistant as well, will attend the interview. The attorney and/or his or her assistant will take careful notes of the entire conversation.
During the Field Interview
When the representative arrives, he or she may ask to take your photograph. The representative may also ask to audio-record your conversation. If an attorney is present, the representative will usually refrain from asking to take a photograph or audio-record the conversation, knowing that your legal counsel will likely determine it unnecessary and/or inappropriate.
The field representative will sit down and talk with you for an hour or more. He or she will have an extensive list of questions to ask you, most of which your claims analyst will have specifically requested the representative address. For those with legal representation, your attorney will have prepared you for each of the questions the representative will ask, so you’ll be ready to give accurate and well-considered answers.
During your conversation, the representative will be very warm and friendly. The representative will normally try to establish a rapport so that you’ll relax and talk openly. He or she will try to get you to talk without thinking, encourage you to go into unnecessary detail, and may ask personal questions that a claims adjuster would normally avoid.
The representative often acts somewhat more reserved when a disability insurance attorney is present. Field representatives know that if they ask any questions that are irrelevant, seek confidential information, or are otherwise inappropriate, your attorney will intervene and let you and the representative know that you don’t need to answer the question.
While you’re talking, the field interviewer will take copious notes. These notes will include the interviewer’s own observations about your appearance, how well you move, how long you were able to sit or stand, what your house looks like (if in your home), and whether you seem nervous or not. If your attorney attends, the representative will know that his or her notes will be compared against the attorney’s, so he or she will be especially careful to document the circumstances accurately.
In our next post, we’ll talk about what happens after the field interview ends.
Why Does My Insurer Want to
Conduct a Field Interview?
At some point after you’ve filed a disability insurance claim, your carrier may contact you to arrange a field interview. Also called a “field visit,” a field interview is when a disability insurer hires a representative to come meet with you face-to-face to talk about your benefit claim. Most times, the company will ask that you meet the field representative at your own home or office.
Your claims analyst will probably tell you that the field interview is just a way to get to know you better, or to help the company gain a better understanding of your disability claim. What the claims analyst won’t tell you are the real reasons why insurance companies put so much time and effort into planning in-person field interviews, such as:
- To take your picture so that a private investigator will recognize you during surveillance.
- To find out what your house and/or office looks like to further aid in surveillance.
- To look inside your house and see if you’ve been doing a lot of housework, paperwork, cooking for yourself, etc., all of which (according to the insurance company) can mean you’re able to work in your own occupation.
- To see if you look like you’re in pain, if you can sit down for a long period of time, or if you can walk without any gait abnormalities.
- To see if you look like you might have current monthly income from sources other than your occupation (i.e., if you have a nice car, a big house, a boat, etc.).
- To drop in and try to interview your spouse, former business partners, office manager, or neighbors.
- To try and get you to relax and open up, or to catch you off guard so that you give information the company can use against you.
In our next post, we’ll discuss what you can expect during the field interview itself.
Beware the “Offset”
Insureds may think that if their disability claim is approved and the insurer begins paying disability benefits, they have won the battle. In reality, however, even the insurer’s complete admission that the insured is disabled within the terms of the policy does not mean that the insurer will pay the full monthly benefit listed in the policy. Most of us think of disability insurance as providing a stream of income to replace lost salary, but few understand that these policies often contain language effectively cutting off other benefits to which the insured would otherwise be entitled.
Disability insurance policies, especially long-term disability policies, frequently contain “offset” provisions, which offset other benefits against the insurer’s monthly payments. Common offsets include benefits which the insured receives from Social Security disability or retirement, unemployment compensation, worker’s compensation, no-fault auto insurance, sick leave, severance pay, and others. The net effect of these offsets is that should the insured receive a benefit from another source, the disability insurance company will reduce its monthly payment by the same amount.
How Can I Keep My Disability Insurance Company From Contacting My Doctors Without My Consent?
In our recent post, “Should Disability Insurance Companies Be Deciding What Kind of Care You Receive?” we explained that insurance companies will often contact your treatment providers directly without your consent, ambushing them with medical studies and demanding answers to a plethora of questions about your medical treatment in an effort to undermine your disability claim. In many instances, insurance companies will refuse to produce the medical reports their in-house doctors wrote about you, but still expect full access to your treatment providers and their reports.
If this happens to you, you may (justifiably) feel like the insurance company is going behind your back and unfairly manipulating the disability claims process. Your treatment providers may become upset because the insurance company is harassing them to respond to detailed questions without adequate time to understand the questions and/or provide thorough answers. You may even notice your doctors acting differently towards you after speaking with the insurance company. For example, your doctor might begin to avoid you when you ask him or her to provide you with documentation to support your disability claim.
How can you protect your treatment providers from being ambushed by insurance companies and protect your claim from being manipulated?
How Functional Capacity Evaluations Impact
Your Disability Insurance Claim
Our last post discussed what to expect during a functional capacity evaluation (“FCE”), as well as the intended purpose of an FCE. Though FCEs can be a useful tool for measuring your abilities, FCEs do not always provide results that are truly indicative of your ability to do your job on a regular, consistent basis. Many courts have recognized the weaknesses and limitations of FCEs in the disability insurance claim context.
Weaknesses and Limitations of FCEs
There are approximately 10 different types of FCEs, each with its own program, measurement methods, and possible evaluative outcomes. Because FCEs can be influenced by many factors, such as physical ability, beliefs, and perceptions, FCEs need to “be interpreted within the subject’s broad personal and environmental context.”[1] Thus, the FCE “process and its administration are only as good as the examiner.”[2]
Disability insurers often stop paying benefits based on FCE results, even when you can’t actually meet the demands of your former job duties on a consistent basis. This is due to an inherent limitation of FCE testing: the FCE can only measure your capacity to do a certain task for a limited amount of time on a certain day. For instance, you may be able to push and pull ten pounds for a few minutes during the FCE, but that doesn’t mean you can do the same task all day, every day.
Another important limitation of FCE testing is how effort is measured. The FCE examiner normally monitors the subject’s heart rate to determine if he or she is putting forth full effort. If your heart rate isn’t high enough, the examiner will say you didn’t try your hardest, so you can probably do more than you demonstrated during the testing. However, there are factors that affect your effort level that can’t be measured by your heart rate alone. For example, heart rate monitoring doesn’t measure the impact of migraine headaches, kidney failure, or other non-exertional limitations (such as interference with attention and concentration due to pain and fatigue).
Continue reading “How Functional Capacity Evaluations Impact
Your Disability Insurance Claim”
What Is a Functional Capacity Evaluation?
After filing a disability insurance claim, your insurance company may ask you to undergo a Functional Capacity Evaluation, or FCE. The insurer tells you where and when to show up, but you likely have little idea what to expect when you arrive. What is an FCE, what is its purpose, and how will it affect your disability claim?
What Is an FCE?
FCEs are formal examinations performed by occupational therapists (OTs) or physical therapists (PTs), not physicians. The purpose of the FCE, according to your disability insurer, is to evaluate your ability to perform the substantial and material duties of your occupation.
What Can You Expect at the FCE?
FCEs usually last between four to six hours, but depending on the tests your insurer has requested, they could be longer, taking place over two consecutive days.
Continue reading “What Is a Functional Capacity Evaluation?”
Should Disability Insurance Companies Be Deciding What Kind of Care You Receive?
What role should your insurance company play in determining your treatment options? In our article, “Can Your Disability Insurer Dictate the Terms of Your Care?” by Ed Comitz and Michael Vincent, we discussed how, depending on the terms of your disability insurance policy, insurers can dictate what care you should receive, and whether you can be forced to undergo surgery in order to continue to receive policy benefits.
When prescribing you a specific treatment or medication, your doctor usually has very specific goals in mind. First, they want to medically treat you in the best way possible. They want to provide you with the best means for curing or coping with your situation after considering the totality of your circumstances and your recovery goals. Second, they want to make you feel better and help you recover from your ailments if possible.
For example, if surgery isn’t an option for your consistently high levels of pain, your doctor may prescribe strong medication to give you the relief you need. They may effectively manage the pain you struggle, but the side effects may impede you from returning to work.
Unlike doctors, insurance companies have one goal in mind: to get you off of their claims list and not pay monthly claim benefits. They want you treated in a way that returns you to work in the short run and may not be as concerned about the long term side effects or repercussions of alternative treatment options.
One way they accomplish this is by having their doctor contact your doctor to discuss treatment alternatives. Such alternative methods include using less effective medications that would allow you to return to work. A strategy they employ is to point your doctor to studies like those outlined in articles like “Disability experts question long-term opioid use,” or “Reed Group Releases New Opioid Treatment Guidance in Disability Guidelines.”
What many people don’t realize is that the Reed Group, the company who released the “updated expert guidelines,” is a subsidiary of Guardian Life Insurance Company, parent company of Berkshire Life. This company has a substantial incentive to downplay the safety and effectiveness of drugs, like opioids, that are able to manage acute pain, but render patients unable to return to work because of medication side effects. These companies want to point your doctors to these guidelines to influence their bottom line by getting you back to work quickly.
The problem with this tactic is that these blanket guidelines do not take into account your pain, your needs, or your situation. Yes, the alternative options may get you back to work, but in the long run you may experience repercussions. Letting claims consultants, who aren’t medical professionals, or the insurance company’s doctors determine your care and treatment is a conflict of interest for insurance companies and is not always in your best interests.
Firm Named #1 Healthcare Law Firm
We are excited to announce that our firm has been named Arizona’s #1 Healthcare Law Firm by Ranking Arizona: The Best of Arizona Business.
Ranking Arizona publishes the results of an annual poll of the Arizona business community. Residents are asked to share their opinions of the best products, services and people in the state, including who they would recommend doing business with. We were selected as the state’s top healthcare law firm for its work representing physicians and dentists, including its handling of disability insurance claims for healthcare professionals.
The firm was also named as one of the top 5 Arizona law firms with 20 or fewer attorneys, the top 5 commercial litigation firms, and the top 10 real estate law firms.
ABC News Investigates
CIGNA’s Disability Claims Handling Practices
UPDATE: Since this story was originally posted in 2008, the insurance regulators of Maine and Massachusetts initiated targeted market conduct examinations of CIGNA’s disability claims handling practices. The concerns raised by Maine and Massachusetts prompted the insurance commissioners of Connecticut and Pennsylvania to also open market conduct examinations and for the California Insurance Commissioner to reopen his previous examination of CIGNA. In 2013, the examinations resulted in fines against the CIGNA companies, corrective actions being required in its handling of disability claims, and for CIGNA to reevaluate certain claims that were denied or terminated. Information on the CIGNA Multi-State Regulatory Settlement Agreement can be found here.
ABC News/Good Morning America‘s investigation by Chris Cuomo into CIGNA disability claim denials has uncovered some disturbing stories. In the video above, claimants describe some of the hardships they have been forced to endure due to denials of their claims or unreasonable delays in having their claims paid.
One breast cancer survivor, who eventually was paid on her claim with the assistance of a disability insurance attorney, describes her two-year ordeal with CIGNA as a “daily, eight-hour job just to fulfill the information that CIGNA was requesting.” The tactic of wearing down a disabled claimant with repeated requests for documentation that has already been provided multiple times — thereby deliberately delaying payment of the claim — is called “slow walking” by some in the industry. While CIGNA denies engaging in this practice, many claimants who are already emotionally and physically vulnerable due to their disability will eventually quit pursuing benefits to which they are entitled in this battle of attrition that is widespread in the disability insurance industry. In this situation, it is often necessary for a claimant to retain the services of an attorney, not only to take on legal issues with the insurance company but also to shoulder the burden of the excessive and repetitive requests for documentation.
Other claimants in Chris Cuomo’s GMA piece describe (a) three years of fighting CIGNA for their benefits, all the while sinking deeply into debt and losing everything; (b) being caught between a rock and a hard place when told by an employer that he could not return to work due to his disability, but simultaneously having CIGNA deny disability benefits; (c) purchasing insurance to protect herself and her family, only to have her business destroyed, savings depleted and fighting to keep her family home when benefits were denied or delayed.
Another of the claimants profiled, Ursula Guidry, a young wife and mother with advanced breast cancer, initially had her benefits paid by CIGNA, but after awhile, they terminated her benefits and told her she could return to work full-time. Eventually CIGNA settled the claim with her. She passed away three months later. As her husband says, it is tragic that her last year on earth was spent being in a panic over financial issues and fighting an unethical insurance company instead of enjoying as much time as possible with her husband and children.
CIGNA did not respond to GMA re any of the specific claimants profiled, but their Chief Medical Officer stated they pay 90% of disability claims filed and that the majority of their customers are satisfied.
Disability Insurance Q&A: How Should Doctors Approach Their Treating Physicians About a Disability Claim?
Question: How should doctors approach their treating physicians about a disability claim?
Answer: Your treating physician’s support can often be critical to getting your claim approved. A hurried, uninterested physician may not have time to devote to your claim. In addition, fully discussing your condition with a professional, compassionate treating physician will help ensure supportive medical records. When to discuss your potential claim with a physician is an important timing issue. Also, when the time comes to speak to the treating physician about the claim, a disabled dentist or doctor should ensure that the treating physician understands the definition of “disability” under the insurance policy, so that he or she can accurately opine as to the inability of the doctor or dentist to work.
Some of our previous blog posts on this important issue are available here and here.
Insurers’ Law Firms Using New Technology
to Track Your Social Media Activity
As many disability insurance policyholders already know, insurance companies regularly look to claimants’ social media accounts (Facebook, LinkedIn, Twitter, Instagram, etc.) for information to help justify a claim denial.
What you may not know is just how important those social media searches are to the insurance company’s lawyers whenever a claim goes to litigation.
At a recent disability insurance law conference attended by attorneys for both claimants and insurers, one insurance company defense attorney spoke about just how crucial it can be to find supposedly damaging information about claimants on social media. “I don’t know how we defended these cases before Facebook,” she said. “It’s a great resource. We’ve found pictures of claimants dancing . . . all kinds of things!”
Your insurance company’s lawyers are so eager to use social media to find information that can make you look bad that they are now shelling out extra money on software specifically designed to monitor and archive everything you say and do on social media. This trend is explained in further detail in the ABA Journal’s recent article: 6 tools to help firms track social media. While the article states that some firms are using the tools to monitor their own clients, there is no doubt that they are being used to monitor their clients’ legal adversaries.
The information that can be gleaned using this type of software is unsettling. One example from the article:
“For instance, if a post says something like ‘I’m having breakfast at this great restaurant’ and there is a picture of what they are eating . . . the software should also be able to show the GPS coordinates, other people they are with, information about the restaurant, etc., so that the whole story is presented, not just the text.”
What this means for claimants is that they must be extra vigilant about what kind of image they are projecting on social media. Everyone, no matter how disabled, has moments of joy in life. But if those joyful moments are posted on social media, they can easily be misconstrued, especially without context.
Does Your Unum Claims Handler Have a Personal Financial Incentive to Deny or Terminate Your Disability Claim?
The transcript of Unum Group’s May 23, 2013 Annual Shareholder Meeting provides some disturbing insight into what may motivate claims personnel at Unum to deny or terminate a legitimate disability claim.
Unum’s Chief Executive Officer, President and Director, Thomas R. Watjen reported to the shareholders that they had “overwhelmingly approved” an employee cash incentive system based on performance:
The fourth item of business is the approval of our annual incentive plan, which provides employees the opportunity to earn cash incentive awards based primarily on the company’s performance each year. Our company performs well, employees get treated well from a financial standpoint. Our company doesn’t perform well, employees don’t get treated as well. . . . So our shareholders see, as we as directors and managers see, how to run the company successfully by creating an incentive system based on performance. So that has been overwhelmingly approved.
Later in the meeting, Unum’s Chief Financial Officer, Richard P. McKenney, spoke about the performance of Unum’s “closed block of business,” which includes its individual disability policies issued prior to the mid-1990s–the type of policies that Unum no longer sells.
We do have our Closed Block business. These are policies which are written some time ago. We serve those customers equally as well. But the returns in these businesses are lower.
Taken together, the two statements paint a picture of claims personnel handling the closed block of business under pressure to improve the returns, or else they “won’t get treated as well” or receive as sweet an incentive bonus.
We often hear from claimants who are incredulous that their claims have been denied or terminated despite a mountain of evidence of their disability. This may be one explanation, and having an attorney to advocate for you as a claimant can be essential when you have a financially-motivated adjuster reviewing your claim.
The full transcript of the Unum Annual Shareholder Meeting is available at Seeking Alpha.
Should Your Disability Insurer Still Require Medical Treatment?
Almost every disability insurance policy issued today requires that you are under the regular care of a doctor in order to be eligible for total disability benefits. However, for permanent medical conditions, sometimes additional treatment just isn’t necessary. For instance, if you undergo a spinal fusion, no amount of treatment is ever going to restore you to exactly how you were before. In addition, people with disabilities are often in a financially vulnerable position, and paying for unnecessary medical treatment can cause further strain.
The people that write and sell disability insurance policies understand this, so they often include an additional benefit in the policies: a waiver of the medical care requirement when treatment is no longer needed. This reasonable provision helps sell policies.
Unfortunately, once a claim is made, the companies are often unwilling to actually provide the benefit. What many insureds may not realize is that the language of these waiver provisions is designed to give the company wide latitude in determining whether or not to provide the benefit.
Continue reading “Should Your Disability Insurer Still Require Medical Treatment?”
Protecting Yourself in the IME Process: Bring a Friend
We have talked about involving a disability insurance attorney in the IME process, understanding what the insurance policy requires, completing intake forms, making lists, and taking notes. Today in our series about tips for Independent Medical Examinations:
Bring a friend. Taking notes is great, but having a witness present is best. That way, you can focus on participating in the examination, and your witness can focus on observing and taking notes. Moral support is an added benefit.
A friend, spouse or partner can be a good witness, especially if he or she is a medical professional. If you have a disability insurance attorney, he or she may also attend with you or send a representative from the law office.
Take note, however, that some insurance companies specifically state that witness are not allowed at IMEs. Normally, this alleged requirement is stated in the letter the insurer sends you to confirm the examination. If you have a disability insurance attorney involved, the attorney can review the letter, the policy and the law and determine whether or not a witness is allowed to attend.
Protecting Yourself in the IME Process: Make Lists and Take Notes
In our series of suggestions for handling an Independent Medical Examination (“IME”), we have already discussed getting a disability insurance attorney involved, knowing the disability policy requirements, and completing the intake forms. Here are today’s tips:
Make lists and bring them to the IME doctor. Don’t be afraid to bring information with you to help answer questions from the IME doctor. Some examples are a timeline of your symptoms—i.e., when they started, when they got worse, etc.—or a list of all your medications so you don’t accidentally forget one. If you have photos or videos showing certain injuries or symptom flare-ups, consider bringing those along as well.
Take notes. This will make sure that your recollection of the IME is recorded along with the doctor’s recollection. Your notetaking should start when you arrive at the IME provider’s office, as your time in the waiting room is often part of the final IME report.
For instance, IME doctors will often report something like, “The patient sat for half an hour before my exam completing the paperwork without any apparent discomfort.” If you take notes before the IME to memorialize how long you sat in the waiting room, if anyone was watching you fill out the paperwork, if you had to stand to stretch, etc., you will be able to show the insurance company whether the doctor’s statement is accurate.
If possible, take notes during the IME as well, so that you can remember exactly what testing was performed and what types of questions were asked.
When you leave the IME, take a few minutes to immediately jot down your impressions and any issues you think you need to follow up on with your disability insurer or attorney.
Protecting Yourself in the IME Process: Intake Forms
Up next in our series of tips for disability insurance policyholders being asked to undergo an Independent Medical Examination (“IME”):
Complete intake forms in advance. When you go to the IME, the doctor will most likely ask you to complete intake forms, including questionnaires outlining all of your symptoms and medical history. If you are stressed or hurried, you may forget to include something that could support your claim for disability insurance benefits. But if you have the forms in advance, you can answer each question carefully and accurately without leaving anything out. Consider asking (or having your lawyer ask) if you can have the forms beforehand to save time once you arrive.
Also review our prior tips on getting a disability insurance attorney involved and reviewing the disability policy requirements.
Protecting Yourself in the IME Process: Reviewing the Policy
In this series, we are outlining some tips for claimants facing an Independent Medical Examination (“IME”). Yesterday, we wrote about getting a disability insurance attorney involved. Today, we’ll explain another important step:
Make sure the exam is required by the disability insurance policy. This is another step where it is beneficial to have an attorney involved to review your disability policy. Most disability insurance policies do have a provision that allows the company to have you submit to an Independent Medical Examination or Physical Examination. However, sometimes those provisions aren’t totally clear on exactly what types of examinations are allowed.
For instance, here is a typical disability insurance policy provision that your insurer might cite to tell you that you have to undergo an IME:
At our expense, we can have a physician of our choice examine you as often as reasonably required while your claim is continuous.
This provision states that the examination should be conducted by a “physician.” Do you have to submit to a Functional Capacity Evaluation with a physical therapist? The provision also states the examination should be “reasonably required.” Has that qualification been met?
Here is another typical provision:
We shall have the right to have you medically examined at our expense when and as often as we may reasonably require while you claim to be disabled under this policy.
This provision says that you have the right to be “medically examined.” Does that mean you can only be examined by a medical doctor? Do you have to undergo a neuropsychological evaluation with a Ph.D.? Again, has the qualification that the examination be “reasonably required” been met?
These are the kinds of questions you may want to get answered before you agree to the exam.
In the next post, we’ll talk about the IME intake forms.
Disability Insurance for College Athletes
In a recent article, written in the wake of NCAA basketball player Kevin Ware’s traumatic leg fracture, The Atlantic explores whether college athletes should purchase disability insurance.
Like doctors and dentists, whose physical health can be crucial to performing their job duties, many professional athletes purchase disability insurance. By doing so, they attempt to protect their income from sickness or injury that interferes with their work.
For college athletes, disability insurance is intended to protect potential, future income that they expect to earn once drafted to professional sports teams. Because the term of the policies is so short – ordinarily just one to two years – and the potential benefits so high – often millions – these disability policies can be extremely expensive. The article discusses athletes and their families that paid upwards of $40,000 in premiums over one or two years.
As the article explains, though, this type of disability insurance is rarely collected. Though these athletes’ disability insurance policies are unique, the difficulty of collecting may sound familiar to many other types of professionals facing disability insurance claims:
[T]hese policies, meant to hedge against risk, are risky in themselves: None of these student-athletes is likely to ever collect a dime, even if they are hurt. These guarantees cover “permanent total disability,” meaning only policyholders who are never able set foot on a field or court again—not simply those who suffer injuries that may reduce their earning potential—can file a claim.
Read the full article here: The $5 Million Question: Should College Athletes Buy Disability Insurance?
Pima County Medical Society Publishes Ed Comitz and Karla Thompson’s Article Re Surveillance in Disability Insurance Claims
The January 2013 edition of Sombrero, the publication of the Pima County Medical Society, features an article by disability insurance attorneys Edward O. Comitz and Karla Baker Thompson. The article, “Surveillance Misuse in Claims Investigations,” reviews some of the ways in which evolving technology has led to overly intrusive surveillance of claimants by insurance companies.
Among the surveillance techniques being utilized are stakeout operations, tailing (sometimes using a “decoy” investigator), pretexting (obtaining your personal information under false pretenses), and GPS and cell phone tracking. For example, some private investigators use a stingray, which is a cell phone tracking device that operates as a miniature cellular tower from inside of the PI’s vehicle. The device enables an investigator to connect to a claimant’s cell phone, even when it’s not in use, and, after taking measurements of the phone’s signal strength, triangulate its location. Since most people tend to carry their cell phones at all times, the device then allows the investigator to track the insured’s movements remotely.
The law surrounding some of these intrusive surveillance techniques, which have been made possible by modern technology, is not yet settled, and it is important that anyone on claim with their disability insurance carrier remain vigilant to the possibility of surveillance at all times, regardless of whether a human being is conducting the surveillance. Long gone are the days when surveillance was only conducted by someone with a camera sitting in a car outside an insured’s home.
Case Study: Berkshire Attempts to Use the “Dual Occupation Defense”
When a professional that owns her own business files a disability insurance claim, the insurer will often try to exploit the claimant’s ownership status to deny total disability benefits. The insurance company will argue that the professional has not one, but two occupations: 1) professional and 2) business owner. The disability insurer will argue that the claimant isn’t actually disabled because she can still perform administrative or managerial functions, even if she can’t do the duties of her actual profession. This is sometimes called the “dual occupation defense.”
For example, in Shapiro v. Berkshire Life Insurance Company, Berkshire attempted to use the dual occupation defense to deny total disability benefits to a dentist. The dentist, Paul Shapiro, had an own-occupation policy, with “total disability” defined as “the inability to perform the material and substantial duties of your occupation.”
Dr. Shapiro owned his own practices, but spent the overwhelming majority of his time and effort doing clinical work. He spent 90 percent of his time in chairside dentistry, working on patients, and just 10 percent of his time doing the administrative work that any practice owner needs to accomplish. In fact, in the year before he became disabled, Dr. Shapiro saw nine to eleven patients each day, and performed an average of 275 dental procedures per month, working 40 to 45 hours each week. He only spent one and a half to four hours each week attending to various administrative and managerial duties like personnel decisions, staff meetings, and computer troubleshooting.
After progressive osteoarthritis and spondylosis of the elbow, neck and other joints left Dr. Shapiro unable to perform chairside dentistry, he filed for total disability benefits with Berkshire. Rather than paying him total disability benefits, however, Berkshire determined that Dr. Shapiro was only entitled to partial disability benefits:
Berkshire’s coverage position was that Shapiro’s occupation immediately preceding the onset of his disability was as an administrator and manager of his various dental practices as well as a practitioner of chair dentistry; because the disability did not prevent Shapiro from doing his administrative or managerial work, Berkshire reasoned, Shapiro did not satisfy the policies’ definition of total disability: “the inability to perform the material and substantial duties of your occupation.”
Dr. Shapiro brought a suit against Berkshire in the United States District Court for the Southern District of New York for breach of contract, among other things. That court found in his favor on the breach of contract claim, but Berkshire appealed. The Second Circuit Court of Appeals agreed with the lower court and affirmed the decision in Dr. Shapiro’s favor. The Court of Appeals determined that Dr. Shapiro “spent the vast majority of his time performing chair dentistry,” and that his administrative work was merely incidental to his material and substantial duties as a full-time dentist.
Though Berkshire’s attempt at the dual occupation defense was unsuccessful in this case, the Court of Appeals indicated that there could be some situations in which it might work:
At some point, a medical entrepreneur’s administrative and managerial responsibilities may well become the material and substantial duties of the insured’s occupation.
The message for disability insurance policyholders that own a business is to be careful how much time you spend in administrative tasks, and how you explain your occupation to your insurer. Otherwise, you could be inadvertently setting your claim up for denial.
