Attorney Ed Comitz Posts CE Course on Dentaltown
Ed Comitz’s Continuing Education course “Disability Insurance Roulette: Why is it So Hard to Collect on My Policy” is now available through Dentaltown. This CE is an electronically delivered, self-instructional program and is designated for 2 hours of CE credit. In this course, Ed discusses why it is so difficult for dentists to collect disability benefits and how to avoid the most common mistakes made by dentists when filing disability claims. Ed also covers the key provisions to look for in disability insurance policies and provides an overview of the disability claims process. Finally, the course discusses how disability insurance claims are investigated and administered, and identifies common strategies used by insurance companies to deny claims.
Information on how to register can be found here.
For more information regarding what to look for in a policy, see this podcast interview where Ed Comitz discusses the importance of disability insurance with Dentaltown’s Howard Farran.
Watch Out for “Work” Provisions
In a previous post, we discussed the importance of how your disability insurance policy defines the key term “total disability,” and provides several examples of “total disability” definitions. The definition of “total disability” in your policy can be good, bad, or somewhere in-between when it comes to collecting your disability benefits.
Disability insurance policies with “true own occupation” provisions are ideal. Here’s an example of a “true own occupation” provision:
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Total disability means that, because of your injury or sickness, you are unable to perform one or more of the material and substantial duties of your Own Occupation.
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Under this type of provision, you are “totally disabled” if you can’t work in your occupation (for example, you can no longer perform dentistry). This means that you can still work in a different field and receive your disability benefits under this type of disability insurance policy.
Insurance companies often try to make other disability insurance policies look like true own occupation policies, and include phrases like “own occupation” or “your occupation,” but then tack on additional qualifiers to create more restrictive policies.
One common example of a restriction you should watch out for is a “no work” provision. Although these provisions can contain the phrase “your occupation” they only pay total disability benefits if you are not working in any occupation. Here’s an example from an actual policy:
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Total disability means solely due to injury or sickness,
- You are unable to perform the substantial and material duties of your occupation; and
- You are not working.
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As you can see, under this type of provision, you cannot work in another field and still receive disability benefits. This can be problematic if you do not have sufficient disability coverage to meet all of your monthly expenses, as you’re not able to work to supplement your income.
A “no work” provision is something that is relatively easy to recognize and catch, if you read your policy carefully. Recently, we have come across a definition of “total disability” that is not so easy to spot, but can dramatically impact you ability to collect benefits. Here’s an example, taken from a 2015 MassMutual policy:
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OWN OCCUPATION RIDER
Modification to the Definitions Section of the Policy
Solely for the Monthly Benefits available under this Rider, the definition of TOTAL DISABILITY is:
TOTAL DISABILITY – The occurrence of a condition caused by a Sickness or Injury in which the Insured:
- cannot perform the main duties of his/her Occupation;
- is working in another occupation;
- must be under a Doctor’s Care and
- the Disability must begin while this Rider is In Force.
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At first glance, this looks like a standard “own-occupation” provision—in fact, it is entitled “Own Occupation Rider.” But if you take the time to read it more closely, you’ll notice that the second bullet point requires you to be working in another occupation in order to receive “total disability” benefits.
Obviously, this is not a disability insurance policy you want. If you have a severely disabling condition, it may prevent you from working in any occupation, placing you in the unfortunate position of being unable to collect your disability benefits, even though you are clearly disabled and unable to work in any capacity. Additionally, many professionals have limited training or work history outside their profession, so it can be difficult for them to find alternative employment or transition into another field—particularly later in life.
These “work” provisions appear to be a relatively new phenomenon, and are becoming increasingly more common in the newer disability insurance policies being issued by insurance companies. It is crucial that you watch out for these “work” provisions and make sure to read both the policies definition of “own-occupation” and “total disability.” While many plans contain the phrase “own-occupation”, including this example, they often aren’t true own-occupation policies and you shouldn’t rely on an insurance agent to disclose this information. Oftentimes, your agent may not even realize all of the ramifications of the language and definitions in the disability insurance policy that they are selling to you.
Lastly, you’ll also note that this particular provision was not included in the standard “definitions” section of the disability insurance policy, but was instead attached to the policy as a “rider,” making it even harder to spot. It’s important to remember that many definitions and provisions that limit disability coverage are contained in riders, which typically appear at the end of your policy. Remember, you should read any disability insurance policy from start to finish before purchasing.
Policy Riders: A Guide to the Bells and Whistles of Individual Disability Insurance – Part 5
New and Unique Policy Riders
In this series of posts we are discussing policy riders, the add-ons to your basic disability insurance policy that provide additional terms or benefits in exchange for higher premiums. In part one, we walked through the basics of policy riders and evaluated the commonly-purchased COLA rider. In part two, we analyzed two benefit-based riders that enable you to increase your monthly benefits without the hassle of going through the hassle of the full underwriting process. In the parts three and four, we looked at important provisions that sometimes appear as policy terms and sometimes appear as riders, depending on the insurer.
In this final post, we’re going to take a look at some of the more recent and unique riders appearing in modern individual disability insurance policies.
Return of Premium Rider
This rider entitles you to receive a refund of all monthly premiums in the event you do not become disabled before the expiration of the policy term. For example, assume you purchased an individual disability insurance policy right of out dental school at age 28 with this rider and an annual premium of $5,500.00 per year. At age 65, if you have not become disabled under the terms of your policy, the insurer has to cut you a check for $203,500.00 (37 years x $5,500.00).
Initially this may seem like a very attractive option. At first glance, it appears that your disability insurance is essentially free if you don’t become disabled. However, the right to recover your premiums has significant costs.
First, this rider usually comes with a hefty premium increase, and the opportunity cost of using those additional funds on a rider with no guaranteed return may be difficult to justify. Sticking with the example above, if the rider costs an additional $1,000.00 per year and you chose to instead put that money in an investment portfolio with an 8% return, at age 65 your portfolio would be worth $203,070.32 – and that money is yours whether you become disabled or not.
Second, return-of-premium riders are often an all-or-nothing proposition: either you become disabled and collect benefits, or you get your premiums back. If you become disabled, you essentially overpaid for the same benefits you would have received without the rider – the extra money paid each month for the rider simply vanishes. Considering the fact that a majority of dentists will suffer from a musculoskeletal condition at some point in their career, this is not a small risk.
Some insurance companies offer return-of-premium riders that will still pay back part of your premiums even if you received disability benefits. However, the terms are typically even less favorable. With this version of the rider, any disability benefits paid to you during the term of your policy will be deducted from your premium return. Additionally, you will typically only receive a percentage of remaining balance (between 50% and 80%) rather than the full amount. Under these terms, if you receive disability benefits for any significant amount of time it will likely diminish most of the value of the rider.
Though the return of premium rider may initially seem enticing, its benefits are often far outweighed by its costs. Before purchasing this rider, consider meeting with a financial professional to determine if there is a more productive use of your money.
Student Loan Coverage Rider
Student loan debt in the United States has exploded over the last decade. Americans now owe approximately $1.3 trillion in student loan debt. Medical students and dental students are graduating with hundreds of thousands of dollars in debt, and in the event of a disability, the only debtors entitled to discharge of their federal student loans are those who meet the Social Security Administration’s stringent standard of “total and permanent disability.” To make matters worse, student loans cannot be discharged in bankruptcy.
Some disability insurance companies are creating policy riders specifically to address this growing crisis. For example, Guardian’s Student Loan Protection Rider allows an individual to insure their student loans for up to $2,000.00 per month on top of his or her disability benefits. With this rider, you can choose between a 10- and 15-year term, and no loan documentation is required until a disability claim is filed. As with your disability benefits, your insurance company must determine that you are totally disabled in order to be eligible for the benefits of this rider.
Doctors, dentists, and other professionals graduating with six-figure student loan debt should consider purchasing a rider of this nature to ensure that in the event of a disability their monthly benefits are not significantly eroded by their ongoing obligation to repay student debt.
Disfigurement Rider
Public figures, celebrities, models, and spokespeople occupy a unique place in the workforce: they are the only individuals in the economy for whom their likeness is the source of their livelihood. Disability insurance companies that insure high-income celebrities and entertainers often offer a disfigurement rider that will pay benefits to the insured if they are disfigured, even if they are not disabled. For many public figures disfigurement may completely deprive them of their ability to secure work, and have the same practical effect as total disability in many other fields.
Loss of Value Rider
Professional athletes also have a very unique place in the economy. Like most employees, their value is typically directly related to their performance. However, the demands on their bodies are so high that even a small decrease in performance brought on by an injury (or following recovery from an injury) can have a significant impact on their earning potential. Professional athletes often purchase this rider as a safety net to protect themselves from the loss of value they could potentially face due to a major but non-career-ending injury right before the expiration of a contract and free agency. More recently, elite college prospects are purchasing this rider to protect their value in an upcoming professional draft. If a major injury causes a college prospect to be drafted in a later round for less money, the rider is designed to fill the salary gap between their projected draft position and their actual draft position.
In recent years, the number of policy riders available for purchase with individual disability insurance policies has risen substantially as insurers create products to fit the unique needs of policyholders. Some riders are more beneficial than others, and some are simply not suited for certain individuals. Before you purchase any rider, look carefully at the fine print and make sure that it fits your financial needs.
Can Your Disability Insurance Company Dictate The Medical Treatment You Must Receive To Collect Benefits? Part 3
“Appropriate Care” and “Most Appropriate Care”
In this series, we are looking at the different types of care provisions disability insurers insert into their policies so that they can later argue that they have a right to dictate the terms of your medical care. In Part 1, we discussed how many policyholders do not even realize that their disability insurance policy contains a care provision until the insurance company threatens to deny their claim for failure to obtain what the insurer perceives as sufficient medical care. We also discussed how care provisions have evolved over time to become more and more onerous to policyholders. In Part 2, we looked at one of the earliest and least stringent care provisions—the “regular care” provision—in detail.
In this post, we will be looking at a stricter care provision—the “appropriate care” provision. Here is an example of a typical “appropriate care” provision:
“Appropriate Care means you are receiving care by a Physician which is appropriate for the condition causing the disability.”
Disability insurance carriers implemented this policy language to allow their claims handlers and in-house doctors to weigh in on the type and quality of care their policyholders receive. As you’ll remember from Part 2 of this series, “regular care” provisions only required policyholders to be monitored regularly by a physician. Thus, under a “regular care” provision, as long as the policyholder was seeing a doctor, the insurer could not scrutinize or direct his or her treatment. Only by changing the policy language could they hope to have greater influence over the medical decisions of their policyholders.
This prompted disability insurers to add the additional requirement that the care must be “appropriate.” But what is “appropriate?” If you are suffering from cervical spinal stenosis, you likely have several reasonable treatment options available to you. For example, your physician might recommend physical therapy, but also indicate that you would be a candidate for more invasive treatment, such as steroid injections. If you have an “appropriate care” provision, does that mean that your disability insurer gets to decide which treatment you receive?
When presented with this question, most courts determined that “appropriate care” limits the insurer’s review of its policyholder’s care to whether it was necessary and causally related to the condition causing the disability.[1] Courts also held that “appropriate” care does not mean perfect care or the best possible care—it simply means care that is suitable under the circumstances.[2] Thus, if physical therapy, steroid injections, and surgery are all suitable treatments for cervical stenosis, most courts agree that your insurer cannot deny your disability claim or terminate your benefits based upon your decision to undergo a course of treatment they view as less effective than another.
In response to these cases, disability insurers again modified their policy language and created the “most appropriate” care provision. Here is an example of what a “most appropriate” care provision looks like:
“[You must receive] appropriate treatment and care, which conforms with generally accepted medical standards, by a doctor whose specialty or experience is the most appropriate for the disabling condition.”
This change places significant restrictions on a claimant’s autonomy not only because it limits the type of physician the claimant may choose, but because it restricts the claimant’s medical care to a singular “appropriate” course of treatment.
These types of provisions can make collecting disability benefits extremely difficult. For example, take the experience of Laura Neeb, a hospital administrator whose chemical sensitivity allergies became so severe that they rendered her totally disabled. After one of her doctors—Dr. Grodofsky—concluded that she had no identifiable allergies, Ms. Need sought another opinion from Dr. William Rea, founder of the Environmental Health Center in Dallas, Texas. Dr. Rea concluded that Ms. Neeb’s hypersensitivity to chemicals was so severe that she was “unable to engage in any type of work,” and required extensive treatment to manage the condition. Ms. Neeb’s insurer, Unum, nonetheless denied the disability claim. The court ultimately held that Ms. Neeb failed to obtain the “most appropriate care” by treating with Dr. Rea, agreeing with Unum that Dr. Grodofsky’s conclusions were correct.[3]
Ms. Neeb’s case illustrates just how restrictive the “most appropriate care” provision can be. It places the burden squarely on the policyholder to show that their chosen course of treatment and treatment provider are most appropriate for their condition. If your disability insurance policy contains a “most appropriate care” provision, it is essential that you find a qualified, supportive treatment provider who is willing to carefully document your treatment and the reasoning behind it. You do not want to place yourself in a position where you cannot justify the treatment you are receiving and must choose between an unwanted medical procedure and losing your benefits.
In the final post of this series, we will discuss the hyper-restrictive care provisions appearing in disability insurance policies being issued today and the serious threats they pose to patient autonomy.
[1] 617 N.W.2d 777 (Mich. Ct. App. 2000)
[2] Sebastian v. Provident Life and Accident Insurance Co., 73 F.Supp.2d 521 (D. Md. 1999)
[3] Neeb v. Unum Life Ins. Co. of America, 2005 WL 839666 (2005).
Can Your Disability Insurance Company Dictate The Medical Treatment You Must Receive To Collect Benefits? Part 2
“Regular Care”
If you are a doctor or dentist and you bought your individual disability insurance policy in the 1980s or 1990s, the medical care provision in your policy likely contains some variation of the following language:
“Physician’s Care means you are under the regular care and attendance of a physician.”
This type of care provision is probably the least stringent of all the care provisions. If your disability insurance policy contains a “regular care” provision, courts have determined that you are under no obligation to minimize or mitigate your disability by undergoing medical treatment.[1] In other words, you cannot be penalized for refusing to undergo surgery or other procedures—even if the procedure in question is minimally invasive and usually successful.[2]
Let’s look at an actual case involving a “regular care” provision. In Heller v. Equitable Life Assurance Society, Dr. Stanley Heller was an invasive cardiologist suffering from carpal tunnel syndrome who declined to undergo corrective surgery on his left hand. Equitable Life refused to pay his disability benefits, insisting that the surgery was routine, low risk, and required by the “regular care” provision of Dr. Heller’s policy. The U.S. Court of Appeals disagreed, and determined that the “regular care” provision did not grant Equitable Life the right to scrutinize or direct Dr. Heller’s treatment. To the contrary, the Court held that “regular care” simply meant that Dr. Heller’s health must be monitored by a treatment provider on a regular basis.[3]
Unfortunately, the Heller case didn’t stop insurance companies from looking for other ways to control policyholders’ care and threaten denial of benefits. For instance, some disability insurance providers argued that provisions requiring policyholders to “cooperate” with their insurer grants them the right to request that a policyholder undergo surgery. Remarkably, when insurers employ these tactics, they are interpreting the policy language in the broadest manner possible–even though they know that the laws in virtually every state require that insurance policies be construed narrowly against the insurer.
Why would insurance companies make these sorts of claims when it is likely that they would ultimately lose in court? Because insurance companies also know that even if their position is wrong, most insureds who are disabled and/or prohibited from working under their disability policy cannot handle the strain and burden of protracted litigation. They know that if they threaten to deny or terminate disability benefits, many insureds will seriously consider having surgery—if only to avoid the stress and expense of a lawsuit. Unfortunately, this can lead to insureds submitting to unwanted medical procedures, despite having no legal obligation to do so.
As time went on, and more and more courts began to hold that “regular care” simply meant that the insured must regularly visit his or her doctor, Unum, Great West, Guardian, and other insurers stopped issuing policies containing that language. Instead, disability insurers started to insert “appropriate care” standards into policies. In the next post, we will discuss this heightened standard and how disability insurers predictably used it as a vehicle to challenge the judgment of policyholders’ doctors, in a renewed effort to dictate their policyholders’ medical care.
[1] Casson v. Nationwide Ins. Co., 455 A.2d 361, 366-77 (Del. Super. 1982)
[2] North American Acc. Ins. Co. v. Henderson, 170 So. 528, 529-30 (Miss. 1937)
[3] Heller v. Equitable Life Assurance Society, 833 F.2d 1253 (7th Cir. 1987)
Can Your Disability Insurance Company Dictate The Medical Treatment You Must Receive To Collect Benefits? Part 1
Imagine that you are a dentist suffering from cervical degenerative disc disease. You can no longer perform clinical work without experiencing excruciating pain. You have been going to physical therapy and taking muscle relaxers prescribed by your primary care doctor, and you feel that these conservative treatments are helping. Like most dentists, you probably have an “own occupation” disability insurance policy. You are certain that if you file your disability claim, your insurer will approve your claim and pay you the disability benefits you need to replace your lost income and cover the costs of the medical treatment that has provided you with relief from your pain and improved your quality of life.
You file your disability claim, submit the forms and paperwork requested by the insurer, and wait for a response. To your dismay, your disability insurer informs you that its in-house physician has determined that the treatment prescribed by your doctor was inadequate. Your insurer then tells you that you should have been receiving steroid injections into your cervical spine, and tells you that if you do not submit to this unwanted, invasive medical procedure, your disability claim could be denied under the “medical care” provision in your policy.
You were not aware that such a provision existed, but, sure enough, when you review your policy more carefully, you realize that there is a provision requiring you to receive “appropriate medical care” in order to collect disability benefits. You think that your insurer is going too far by dictating what procedures you should or should not be receiving, but you are afraid that if you don’t comply with their demands, you will lose your disability benefits, which you desperately need.
This is precisely the sort of scenario presented to Richard Van Gemert, an oral surgeon who lost the vision in his left eye due to a cataract and chronic inflammation. Dr. Van Gemert’s disability insurance policies required that he receive care by a physician which is “appropriate for the condition causing the disability.” After years of resisting pressure from his insurers to undergo surgery, Dr. Van Gemert finally capitulated. Once Dr. Van Gemert received the surgery, you might expect that his insurer would pay his claim without further complaint. Instead, Dr. Van Gemert’s insurer promptly sued him to recover the years of disability benefits it had paid to him since it first asserted that he was required to undergo the surgery.[1]
Unfortunately, “appropriate care” provisions, like the provision in Dr. Van Gemert’s policy, are becoming more and more common. The language in such provisions has also evolved over time, and not for the better. In the 1980s and 1990s, the simple “regular care” standard was commonplace. In the late 1990s and into the 2000s, insurers began using the more restrictive “appropriate care” standard. And, if you were to purchase a policy today, you would find that many contain a very stringent “most appropriate care” standard.
These increasingly onerous standards have been carefully crafted to provide disability insurers with more leverage to dictate policyholders’ medical care. However, there are several reasons why your insurance company should not be the one making your medical decisions. To begin, if you undergo a surgical procedure, it is you—and not the insurance company—who is bearing both the physical risk and the financial cost of the procedure. Perhaps you have co-morbid conditions that would make an otherwise safe and routine surgical procedure extremely risky. Perhaps there are multiple treatment options that are reasonable under the circumstances. Perhaps you believe conservative treatment provides better relief for your condition than surgery would. These are decisions that you have a right to make about your own body, regardless of what your disability insurer may be telling you.
In the remaining posts in this series, we will be looking at the different types of care provisions in more detail, and how far insurance companies can go in dictating your care in exchange for the payment of your disability benefits. We will also provide you with useful information that you can use when choosing a disability insurance policy or reviewing the policy you have in place. In the next post we will be discussing the “regular care” standard found in most policies issued in the 1980s and early 1990s.
[1] See Provident Life and Accident Insurance Co. v. Van Gemert, 262 F.Supp.2d 1047 (2003).
The Devil Is In the Details: Long Term Disability Policies and Benefit Offsets
In a previous post, we discussed a feature of long-term disability insurance policies that is easily overlooked and frequently leaves policyholders feeling cheated and deceived by their insurer: the benefit offset provision. When a person signs up for a disability insurance policy, he or she expects to pay a certain premium in exchange for the assurance that the insurance company will provide the agreed-upon monthly benefit listed in the policy, should they ever become disabled. What many people do not realize is that some disability insurance policies contain language that permits the insurer to reduce the amount of monthly disability benefits it is required to pay if the policyholder receives other benefits from another source.
Worker’s compensation, supplementary disability insurance policies, state disability benefits, and social security are some of the most common “other sources” from which policyholders may unexpectedly find their disability insurance benefits subject to an offset. The frequency of offset provisions varies by policy type. They are more likely to appear in group policies and employer-sponsored ERISA policies, and are rarely found in individual disability insurance policies.
Benefit offset provisions can have significant and often unforeseen financial repercussions, as illustrated by the recent account of a couple from Fremont, Nebraska. As reported by WOWT Channel 6 News, Mike Rydel and his wife Carla were receiving monthly benefits under Mr. Rydel’s disability insurance policy with Cigna. Mr. Rydel had suffered a stroke in the fall of 2015 that had left him incapacitated and unable to work. The Rydels’ financial situation was made even more dire by Mr. Rydel’s need for 24-hour care, which prevented Mrs. Rydel from working as well.
In an effort to supplement his family’s income, Mr. Rydel applied for Social Security disability benefits. When his claim was approved, the Rydels expected a much needed boost to their monthly income. Unfortunately, due to an offset provision in Mr. Rydel’s policy, his monthly disability benefits under the Cigna policy were reduced as a result of the approved Social Security claim, and his family did not realize any increase in income.
The Rydels were understandably shocked when they were informed by Cigna that Mr. Rydel’s monthly disability insurance benefits would be reduced by the amount he was now receiving from Social Security, and that Cigna would be pocketing the difference. Perversely, the only party that benefited from Mr. Rydel’s SSDI benefits was Cigna, which was off the hook for a portion of Mr. Rydel’s monthly benefits. In response to an inquiry from WOWT, Cigna simply asserted that “coordination” of private insurance benefits and government benefits was a long-standing practice – an assurance that likely provided no solace to the Rydels.
The Rydels’ story highlights the importance of carefully reviewing every aspect of your disability insurance policy before signing. Benefit offsets, policy riders, occupational definitions, and appropriate care standards in your policy can significantly impact your ability to collect full benefits if you become disabled. You should review your disability insurance policy carefully to determine if it contains any offset provisions that may affect your benefits. If it does, you will need to take them into account when estimating your monthly benefits.
References:
http://www.wowt.com/content/news/Stroke-Victim-Suffers-Disability-Insurance-Set-Back-385758411.html
Dealing with the Demands of Dentistry: It’s Ok to Ask for Help
Dentistry is not an easy profession. The clinical aspects of dentistry are physically and emotionally demanding. Performing repetitive procedures and holding static postures for prolonged periods of time can leave dentists feeling mentally drained, sore and fatigued. And given the frequent exposure to patient anxiety and the need for precision when performing dental procedures, it is not uncommon for dentists themselves to develop anxiety about causing pain to patients or making a mistake when performing a procedure.
The other aspects of dentistry are no less challenging. Many dentists work long hours, which makes balancing work, family, and other responsibilities difficult. Other stressors include difficult and uncooperative patients, dissatisfied patients, finances, business problems, collecting payments, paperwork/bureaucracy, time pressure, cancellations, no-shows—the list goes on and on. And that is not even taking into consideration major stressors, such as staff issues, board complaints, audits, and malpractice lawsuits.
When presented with these difficulties, dentists can become anxious and depressed. Some even seek out mood altering drugs and/or begin to abuse alcohol, in an effort to alleviate the stress.
Thankfully, there are resources available where dentists can turn to for help. Most dental associations have a subcommittee or group designed to provide confidential help to dentists struggling with emotional, mental and/or substance abuse issues.
For example, the Arizona Dental Association (AzDA) has a group called the Dentists Concerned for Dentist Committee (DCD). The DCD is a group of fellow dentists who work with other dentists to help them with substance abuse problems, with an emphasis on “cure and return to practice.” When the DCD is contacted, everything remains strictly confidential, and the State Board is not notified. As explained by the DCD, “[t]here should be no grief or shame in seeking help.” Accordingly, DCD records are “sealed and cannot be accessed by anyone.”
If you are a dentist in Arizona struggling with substance abuse, or you know a dentist who is, consider contacting the AzDA so that a referral can be made to the DCD. You can find the contact information for the AzDA here.
If you live outside Arizona, consider contacting your local dental association to see if it has a similar program.
Remember, it’s ok to ask for help.
References:
“When Life Feels Just Too Hard,” INSCRIPTIONS, Vol. 30, No. 8 (August 2016) at p. 24.
Ed Comitz Named as Top Lawyer in Field of Insurance Law
Ed Comitz, one of the firm’s founding members, was recently named as a Top Lawyer and one of Phoenix’s best attorneys in the field of insurance law in Phoenix Magazine’s special, 50th Anniversary Issue.
Mr. Comitz’s practice primarily focuses on helping physicians and dentists secure private disability insurance benefits. Mr. Comitz and the legal team at Comitz | Stanley also represent doctors in several other areas, including practice transitions, employment law, business litigation, estate planning, regulatory compliance, and licensing issues.
Thinking About A Policy Buyout?
How Lump Sum Settlements Work: Part 1
Lump sum buyouts are a frequent source of questions from our clients and potential clients. With that in mind, the next few posts will address different aspects of the buyout process.
Buyouts typically occur in one of two situations: 1) after you’ve been on claim for several years, or 2) after a lawsuit has been filed. This blog post will focus on the first scenario.
Lump sum buyouts that occur outside of litigation normally won’t occur unless and until the insurance company decides that you are totally and permanently disabled under the policy definition. Typically, the disability insurer won’t consider whether this is the case until you’ve been on claim for at least two years. If the insurer determines that you’re totally and permanently disabled, it will then determine whether it makes sense financially for the company to offer you a percentage of your total future benefits rather than keep paying your monthly benefits for the entire duration of your claim.
To understand how the insurance company calculates whether a buyout is in its financial interest, you should understand how insurance company reserves work. The purpose of reserves is to ensure that the insurance company has the resources to fulfill its obligations to policyholders even if the company has financial difficulties. Thus, disability insurers are required by state regulators to keep a certain amount of money set aside, or “reserved,” to pay future claims. Any money required to be kept in a reserve is money that the insurer can’t spend on other things or pay out in dividends. The amounts required to be kept in the reserve are determined by the state, depending on factors like how much the monthly benefit is and how long the claim is expected to last.
For a disability insurance claim, a graph of the required reserve amount over time looks like a Bell curve: low at the beginning, highest in the middle, and low again towards the end of the benefit period. The ideal time for a settlement, from an insurance company’s perspective, is at or just before the high middle point–typically about five to seven years into the claim, depending on the claimant’s age and the duration of the benefit period. At this point, the company is having to set aside the highest amount of money in the reserve.
If the insurance company can pay you a percentage of your total future benefits, it can not only save money in the long run, but it can release the money in the reserve. The disability insurer can then use those funds for other purposes, including providing dividends for its investors. In addition, the insurance company will save all of the administrative expenses it was putting towards monitoring your disability claim.
In the next post, we’ll address how and why buyouts occur after a lawsuit has been filed.
Should Women Pay More for Disability Insurance? Part 2
In a previous post, we discussed how a woman with the same age, job and health history as a man can end up paying an average of 25% (and in some cases, 60%) more for the same level of disability insurance protection. We also discussed how some insurance companies raise premiums based on conditions unique to one’s sex, such as pregnancy.
When we first addressed this issue, the Massachusetts legislature was considering a bill that prohibited insurers from charging higher rates to women than to men. At the time, Massachusetts law prohibited insurance companies from using race and religion as rating factors when determining the cost of insurance, but there was no law against using gender as a rating factor.
Recently, the Massachusetts Senate voted to approve a budget amendment adding gender to other rating factors that insurance companies are not allowed to consider when determining the cost of premiums. The bill passed by a wide margin: 32 senators in favor of the amendment, and only 6 senators voting against the amendment.
It will be interesting to see if, in the future, other states follow suit and start to pass laws requiring insurance companies to give men and women the same premium rates for the same level of disability coverage.
References:
http://www.masslive.com/politics/index.ssf/2016/05/senate_votes_to_exclude_gender.html
Online Underwriting – Tips to Avoid Potential Pitfalls
Recently, several disability insurers have started to introduce new online applications in an effort to make purchasing disability insurance more convenient. Some of them even offer automated underwriting and instant approval of your application. In connection with the online applications, insurers are also providing more flexible options regarding benefit amounts and benefit periods.
While online applications will likely make purchasing disability insurance more convenient, here are some tips to keep in mind and some pitfalls to avoid.
- Don’t neglect to shop around. While it will certainly take less time to just apply to the first website you come across, you should always look at what multiple companies are offering before you apply for disability benefits. While it may not seem like it at the time, the decision to purchase disability insurance may be one of the most important decisions in your life if you end up becoming disabled. So make sure to take the time to research what your options are, so that you can be sure to get the best disability insurance policy you are able to.
- Do the research. If you are merely interacting with a computer screen, you will not be able to ask questions about particular policy provisions. Consequently, you should take the time to do outside research so that you know exactly what to look for and what to avoid in a disability insurance policy.
- Don’t sacrifice important provisions for convenience or affordability. There are certain provisions that every doctor and dentist should have in their policy, such as an own occupation provision. If the online policy does not offer the provisions you need, don’t settle for the sake of convenience or affordability. Remember, if you end up becoming disabled, you will not just want any disability policy—you will want the best disability policy.
- Take your time when you are filling out your application. Most disability insurance policies contain language that allows the insurer to void the policy if you make material misstatements in your application. Many people tend to rush through online applications, particularly if their priority is convenience. Make sure that you double check your answers before you submit the application, to ensure that everything you are submitting is accurate.
- Periodically reevaluate your coverage. If your initial goal is affordability, make sure that you periodically reevaluate your coverage to ensure that it is still sufficient for your needs. Many people initially apply for low benefit policies and neglect to increase their benefits amounts later on when they can afford to pay higher premiums. Consequently, if they become disabled, their benefit amount ends up covering only a small fraction of their prior income.
These tips are particularly important for physicians and dentists to remember when applying for disability insurance, because insurance companies are particularly aggressive towards disability claims filed by doctors and dentists. Additionally, many doctors and dentists are accustomed to a high level of income. Physicians and dentists who do not purchase enough disability coverage and later become disabled can find themselves unable to meet their obligations and care for their family, even if their disability claim is approved. Additionally, as we have discussed in previous posts, in some cases, a single word in a disability insurance policy can determine whether you receive benefits.
So remember, purchasing disability insurance is not something that should be taken lightly. Take your time, and get the best policy you can.
The Four Functions of Insurance
In this post, we are going to discuss the four functions of an insurance company.
Introduction – The Promise
Insurance is not like any other business. Rather than selling a tangible product that you receive immediately upon paying for it, insurance companies are selling an important promise—a promise of protection, security and peace of mind if something goes wrong.
When you buy a car, you give someone money and you take a car home. When you buy groceries, you pay money and get your groceries. Insurance is different. With insurance, you give them money and trust, and hope and pray that you never have to collect.
The Four Functions of Insurance
The activities of an insurance company can be divided into four major functions:
1. Actuarial
The actuarial department is concerned with what kind of promise the company is going to sell and how much the promise should cost. Essentially, the actuaries’ role is to analyze the financial consequences of risk and price the company’s product in a way that will allow the company to make a profit. For example, an actuary working for a car insurance company might calculate the risk that potential customers will be in a car accident, and then adjust premium amounts to account for that risk so that the insurer can pay accident claims and still make money.
2. Marketing
The marketing department is concerned with how to get people to buy the promise being sold. They design ads and employ sales people. Basically, this department’s goal is to get people interested in buying the promise.
3. Underwriting
The underwriting department determines who the company should sell the promise to. Underwriters review applications and assess whether the company should allow applicants to purchase the promise. For example, the underwriting department of a life insurance company might review health questionnaires submitted by applicants to assess whether the level of risk is low enough to provide life insurance to the applicant.
4. Claims
The claims department’s role is to process and pay legitimate claims. While the first three departments are very much concerned about profitability, the claims department is not supposed to consider company profitability when adjusting a claim. If the actuaries made a mistake and sold a product that is costing the company too much money, the product was not marketed correctly, or if underwriting was too lax, the company is supposed to pay legitimate claims and bear the loss.
Conclusion
As we have discussed in previous posts, an insurance company has a legal obligation to treat its customers fairly and deal with its customers in good faith. Ideally, the disability insurance claim process should be simple. You should inform the company that you meet the standards of the contract, provide certification from a doctor of that fact, and collect your disability benefits. It is not supposed to be an adversarial process.
Unfortunately, in instances where one or all of the first three departments mess up, some insurance companies improperly shift the burden of making a profit onto the claims department. This, in turn, transforms the claims process into an adversarial process.
If you have an experienced disability attorney involved from the outset of your disability claim, your attorney can monitor the insurance company to make sure that they are complying with their legal obligations. If you have already filed a disability claim, but believe that your insurer is not properly processing your claim, an experienced attorney can review the insurer’s conduct and determine whether the disability insurer is acting in bad faith.
Deciphering Mental Disorders and Substance Abuse Policy Exclusions – Part 2
In Part 1, we looked at how disability insurance companies broadly define mental disorders and substance abuse. In this post, we will be looking at a sample mental disorder and substance abuse limitation provision.
What Does a Mental Disorder and Substance Abuse Limitation Look Like?
Here is a sample limitation provision from an actual disability policy (this provision is taken from the same policy containing the definition of “mental disorders and/or substance abuse disorders” discussed in Part 1):
maximum indemnity period means the maximum length of time for which benefits are to be paid during any period of total disability (see the Policy Schedule on Page 1). Benefits will not be paid beyond the policy anniversary that falls on or most nearly after your sixty-seventh birthday, or for 24 months, if longer, except as provided by this policy. In addition to any limitations described above, the maximum indemnity period for a disability due to a mental disorder and/or substance abuse disorder is also subject to the following limitations: (a) The lifetime maximum indemnity period is 24 months; (b) the 24-month limitation also applies to all supplementary benefits payable by virtue of your disability due to a mental disorder and/or substance abuse disorder; (c) any month in which benefits are paid for a mental disorder and/or substance abuse disorder (regardless of whether paid under the base policy any supplementary benefits or both) shall count toward the 24-month limitation; (d) this limitation applies to this policy and all supplementary benefits under this policy.
Note that this provision is not entitled “mental disorder limitation” or “substance abuse limitation.” Instead, it is entitled “maximum indemnity period.” In fact, this provision is actually part of the policy’s definition section, and not the main part of the policy—highlighting the importance of carefully reviewing the definitions in your disability insurance policy.
Note also that this particular provision provides that any month in which disability benefits are paid counts against the 24 month limit. So, for example, if you received disability benefits for a period of 12 months in connection with a substance abuse related disability, and subsequently returned to work, the next time you needed to file a claim related to a mental disorder or substance abuse, you could only receive a maximum of 12 months of disability benefits.
Conclusion
When purchasing a disability policy, watch out for mental disorder and substance abuse exclusions and limitations. Always be sure to ready your policy carefully so that you understand the scope of the protection you are purchasing. If you already have a disability policy, an experienced disability insurance attorney can review your policy and determine whether it contains any mental disorder or substance abuse limitations that might limit your ability to collect disability benefits under your policy.
Deciphering Mental Disorders and Substance Abuse Exclusions – Part 1
In previous posts, we have discussed how many disability policies contain mental disorder and/or substance abuse exclusions that either prevent claimants from collecting disability benefits under their policies, or severely limit claimants’ right to collect—usually to 24 months or less.
Sometimes, it can be hard to tell if your disability insurance policy contains such an exclusion. Policy language can be difficult to decipher, and it becomes even more difficult in cases where the terms of the exclusion are contained within multiple provisions of the disability policy.
In the next few posts, we are going to discuss mental disorder and substance abuse exclusions. In Part 1, we will look at an example of how insurance companies define mental disorders and substance abuse. In Part 2, we will look at an example of a mental disorder and substance abuse limitation provision.
How Do Insurance Company’s Define Mental Disorders and Substance Abuse?
Each policy’s definition varies, depending on the insurance company. Here is a sample definition taken from an actual insurance policy:
mental disorders and/or substance abuse disorders mean any of the disorders classified in the most current edition of the Diagnostic and Statistical Manual of Mental Disorders published by the American Psychiatric Association (APA). Such disorders include, but are not limited to, psychotic, emotional, or behavioral disorders, or disorders relatable to stress or to substance abuse or dependency. If the Manual is discontinued, we will use the replacement chosen by the APA, or by an organization which succeeds it.
As you can see, this definition is quite broad and could potentially encompass quite a few disabling conditions. Since the policy provision does not actually list out specific disorders, at best you would need to consult the APA manual, in addition to your disability policy, to find out what this provision actually means. And if your particular disorder does not fit neatly within the APA’s framework, you will likely have to go to court to determine whether your disorder falls within the policy’s definition of mental disorders and/or substance abuse disorders.
Also, because the definition is based upon the “most current edition” of the Diagnostic and Statistical Manual of Mental Disorders published by the APA, the types of disorders covered by the limitation will change each time the APA publishes a new manual.
These are just a few of the reasons why disability claims involving mental disorders and substance abuse disorders can be particularly tricky. In the next post, we will look at an example of what a mental disorder/substance abuse disorder limitation provision looks like.
Myelopathy: Part 2
In Part 1 of this post, we listed some of the symptoms and potential causes of myelopathy. In Part 2, we will discuss some of the methods used to treat myelopathy.
Methods of Treating Myelopathy
- Avoidance of activities that cause pain;
- Acupuncture;
- Using a brace to immobilize the neck;
- Physical therapy (primarily exercises to improve neck strength and flexibility);
- Various medication (including nonsteroidal anti-inflammatory drugs (NSAID), oral corticosteroids, muscle relaxants, anti-seizure medications, antidepressants, and prescription pain relievers);
- Epidural steroid injections (ESI);
- Narcotics, if pain is very severe;
- Surgical removal of bone spurs/herniated discs putting pressure on spinal cord;
- Surgical removal of portions of vertebrae in spine (to give the spinal cord more room); and
- Spinal fusion surgery.
Conclusion
Myelopathy can be severely debilitating, particularly for doctors and dentists. Obviously, any physician or dentist who is experiencing a loss of motor skills, numbness in hands and arms and/or high levels of chronic pain will not be able to effectively treat patients.
If you are experiencing any of these symptoms, you may want to ask your doctor to conduct tests to see if your spinal cord is being compressed. If you have myelopathy and the pain and numbness has progressed to the point where you can no longer treat patients effectively or safely, you should stop treating patients and consider filing a disability claim.
Myelopathy: Part 1
In previous posts, we have discussed a number of disabling conditions, such as Parkinson’s disease, essential tremors, carpal tunnel syndrome, and fibromyalgia. In this post, we are going to talk about another serious condition that can severely limit a physician or dentist’s ability to practice—myelopathy. In Part 1, we will discuss some of the causes and symptoms of myelopathy. In Part 2, we will discuss some of the methods used to treat myelopathy.
What is Myelopathy?
Myelopathy is an overarching term used to describe any neurologic deficit caused by compression of the spinal cord.
The onset of myelopathy can be rapid or it can develop slowly over a period of months. In most cases, myelopathy is progressive; however, the timing and progression of symptoms varies significantly from person to person.
What Causes Myelopathy?
There are several potential causes of myelopathy, including:
- Bone fractures or dislocations due to trauma/injury;
- Inflammatory diseases/autoimmune disorders (e.g. rheumatoid arthritis);
- Structural abnormalities (e.g. bone spurs, disc bulges, herniated discs, thickened ligaments);
- Vascular problems;
- Tumors;
- Infections; and
- Degenerative changes due to aging.
Symptoms of Myelopathy
The symptoms of myelopathy will vary from case to case, because the nature and severity of the symptoms will depend on which level of the spine is being compressed—i.e. cervical (neck), thoracic (middle), or lumbar (lower)—and the extent of the compression.
Some of the symptoms of myelopathy include:
- Neck stiffness;
- Deep aching pain in one or both sides of neck, and possibly arms and shoulders;
- Grating or crackling sensation when moving neck;
- Stabbing pain in arm, elbow, wrist or arms;
- Dull ache/tingling/numbness/weakness in arms, hands, legs or feet;
- Position sense loss (i.e. the inability to know where your arms are without looking at them);
- Deterioration of fine motor skills (such as handwriting and the ability to button shirts);
- Lack of coordination, imbalance, heavy feeling in the legs, and difficulty walking;
- Clumsiness of hands and trouble grasping;
- Intermittent shooting pains in arms and legs (especially when bending head forward);
- Incontinence; and
- Paralysis (in extreme cases).
Know Your Limits: How Issue and Participation Limits Affect Your Coverage
Recently, several disability insurers have decided to raise their Issue and Participation (I&P) limits. In this post we will discuss some of the potential ramifications of increased I&P limits.
What are Issue and Participation Limits?
The Issue Limit is the maximum amount of liability a single insurer will cover for a particular individual. The Participation Limit is the maximum amount of total coverage an insurer is willing to provide after factoring in the coverage that the individual is already receiving from other insurance companies. Usually your maximum monthly benefit is determined by your income, but some insurers allow professionals, such as physicians and dentists, to apply for default rates based on other factors such as occupation, years of experience, etc. Usually, an insurer’s I&P limits permit coverage in an amount that is approximately 40-65% of your actual monthly income.
Essentially, insurers use I&P limits to make it possible to collectively provide higher total benefits to high income earners, while at the same time ensuring that they are not over-insuring an individual.
What are the Ramifications of Higher Issue and Participation Limits?
In previous posts, we have talked about how in the 1980’s and early 1990’s, disability insurers aggressively marketed policies to doctors, dentists, and other high income earners. We’ve also discussed how, due to the emergence of managed care, doctors and dentists saw a significant decrease in income. The end result was that disabled doctors and dentists had policies that promised disability benefits that were equal to, or greater than, their modified salaries. When the insurance companies had to start paying the benefits they had promised, they lost hundreds of millions of dollars. This in turn led to insurance companies taking an aggressive stance toward claims involving high paying policies. Most disability insurers also stopped offering policies with high benefit limits.
Now, it appears that at least some insurance companies have come full circle and are once again marketing policies with high benefit limits. What does this mean? Now that insurers are beginning to raise I&P limits, it may be possible for you to obtain benefit amounts that are closer to your actual monthly income. Remember, as with any insurance, generally speaking, a higher benefit also means higher premiums. However, if you can afford it, it is usually better to have as much coverage as possible.
If insurers end up providing higher benefits again, it will be interesting to see if there is another corresponding spike in claim denials. If you do end up purchasing a high benefit policy, be sure to look it over carefully and make sure that there is not anything in it that would allow the insurance company to limit or deny your disability claim later on down the road. If you are unsure about whether you are being offered a good policy, an experienced disability insurance lawyer can review the disability policy and explain any complex provisions.
References:
http://www.virtual-strategy.com/2015/10/21/secura-consultants-highlights-new-benefit-levels-disability-insurance-coverage#axzz3ptYLroMT.
Build Your Own Insurance: What to Look for in a Policy
Recently, insurers have started to allow consumers to build and personalize their own disability insurance policies online. For instance, Guardian recently announced the launch of its online insurance quoting tool. According to Guardian, the tool “educates clients on the costs for various options based on age and occupation, demonstrates how adding or removing certain options affects pricing, and shows how to create the plan that best matches their individual needs.”[1]
If this “build your own insurance” concept catches on, consumers may have much more control over the terms of their policies than they have had in the past. Accordingly, in this post we are going to talk about things to look for in a policy, and some things to avoid in a disability insurance policy.
Things to Look for in a Policy
Generally speaking, here are a few things that you will want to look for when selecting a disability insurance policy:
- Make sure that the disability policy is a true “own occupation” policy.
- Make sure that the disability policy provides for lifetime benefits.
- If possible, add a specialty rider that clearly defines your own occupation as your specialty.
- Try and find a disability policy with a COLA (cost of living adjustment) provision. This provision will increase your potential disability benefits by adjusting for inflation as time passes.
- Make sure that you get the highest benefit amount you can afford. Remember, if you’re unable to practice, your monthly disability payments may be your only source of income.
Things to Avoid in a Policy
Generally speaking, here are a few things that you should avoid when selecting a disability insurance policy:
- “No Work” provisions that only provide disability benefits if you are unable to perform the material and substantial duties of your own occupation and you are not working in any other occupation.
- Substance abuse exclusions.
- Provisions requiring you to apply for Social Security benefits.
Remember, purchasing disability insurance is no different than any other significant purchase. Be sure to take your time and obtain quotes from multiple insurance companies before making a final decision.
For more information regarding what to look for in a policy, see this podcast interview where Ed Comitz discusses the importance of disability insurance with Dentaltown’s Howard Farran.
[1] See http://www.businesswire.com/news/home/20151028005074/en/Guardian-Empowers-Consumers-Build-Disability-Insurance-Coverage.
The Reality of Addiction: Physicians Are Susceptible Too
We’ve discussed the prevalence of depression and stress in physicians, but what about addiction? While physicians are just as likely as the general public to become dependent upon alcohol and illegal drugs, they are more likely to abuse prescription drugs. A survey of 55 physicians that were being monitored by their state physician health programs for problems relating to drug and alcohol abuse showed that 38 (69%) abused prescription drugs. While certainly concerning, this is not necessarily surprising, as physicians have far greater access to prescription drugs than the average person.
Compounding this issue is the stigma associated with substance abuse. Oftentimes, those who do not suffer from substance addiction believe that drugs and alcohol are something that people can quit easily, and that substance abuse can be solved by a quick trip to a rehab facility. But in many cases, substance abuse is more than mere recreational use of medications. In some cases, those who abuse prescription drugs may be trying to relieve stress or self-medicate chronic physical and/or emotional pain. In other cases, substance abuse may be a result of the phenomenon called “presenteeism”—doctors may be taking the medication simply because they believe it is the only way to continue working in spite of an illness, impairment, or disability.
How can medical professionals with substance addiction get help? One way is to seek confidential treatment to avoid the scrutiny of a medical board or coworkers. Confidential programs can be both outpatient and inpatient, with inpatient programs usually lasting around one to three months. After treatment, patients are able to continue recovering by completing 12–step programs, like Alcoholics Anonymous. However, this treatment option has similar relapse rates to the general public: nearly half of patients relapse in the first year.
A second road to recovery is physician health programs. These programs actively monitor patients after treatment for a period of five years by conducting drug testing, surveillance and behavioral assessments. This path may be difficult for physicians to come to term with after keeping their addiction hidden. However, going through the physician health programs boasts a much higher success rate of 78% (only 22% tested positive during the 5-year monitoring period), and roughly 70% of medical professionals who pursue this method of treatment are still working and retain their licenses.
If you, or a physician you know, struggles with substance dependency, we encourage you to seek out appropriate help. If you are a physician with a painful disability, you should not put your patients at risk by attempting to work through the pain or by seeking to dull the pain with self-medication. If you have disability insurance, you should contact an experienced disability insurance attorney. He or she will be able to guide you through the claims process and help you secure the benefits that you need without putting yourself or your patients at risk.
REFERENCES:
http://www.medscape.com/viewarticle/819223_3.
