Disability Happens » Bad Faith Long Term Disability

Bad Faith Long Term Disability

October 25th, 2007 by Anonymous

by “One who wants to see laws change”

The worst insurance policy to have is a long-term disability (LTD) policy because it usually falls under the guidelines of Employee Retirement Income Security Act (ERISA). If you make a claim on an ERISA covered LTD policy and have been denied benefits, you will be unlikely to find an attorney to pursue the matter. The major obstacles to finding an attorney to handle your lawsuit are that you must sue in Federal court, you are unable to collect attorney fees if you do prevail, punitive damages cannot be awarded, and it cannot stop the insurance company from just doing it again after time has passed.

You will not have much luck with your state’s Department of Insurance (DOI) either. Of all the state DOI’s, California is probably the most effective one, and even it is powerless when it comes to a LTD policy covered by ERISA. In fact, no state regulates ERISA insurance policies. The state DOI’s only regulate how the insurance company conducts business in the state-not the policy itself.

I purchased a long-term disability (LTD) policy with CNA insurance thinking I would probably never use it but if something should happen to me, this policy would take care of me as it so stated. I didn’t think about it again, just made my payments each month, until my life turned upside down and I wasn’t able to work.

I was brought up with a strong work ethic, and I loved my work. I would have done it without pay if I could have lived without an income. This only increased the emotional pain of not working. Regardless of how much I wanted to return to work, the physical pain and was too great to overcome. Eventually my injury required surgery which was supposed to make me as “good as new” but unfortunately took away one physical problem and created others.

For the first 3 months of my disability, I had short term disability insurance through my employer’s insurance. For the balance of the first year, CNA made LTD payments to me but subtracted from their payments the full amount of the State of California’s Disability Insurance (SDI) benefits. CNA’s contact rep assured me I was lucky and had a good policy and I would be taken care of. Actually that was the first rep I had, (She was the one who said don’t bother with workers comp because you have us and the policy clearly indicates you’re covered!) As the months went by, I was passed on to new reps. The kind and compassionate attitude diminished with each rep change. At the end of the year, when California’s State Disability Insurance was about to run out, I received a letter from my newest rep stating CNA was denying any future benefits because they felt I ‘should’ be better. My LTD income immediately stopped. I later found out that this was typical…to stop paying when they would have to pay the first complete benefit payment. First make you feel safe, then kick you in the stomach when you are the most vunerable.

It didn’t matter to CNA that all 6 of my very reputable medical doctors said I was 100% disabled nor did CNA think I had a right to be examined by one of their physicians. I asked to see their doctor. I had nothing to hide. But I was refused. I was never examined by a doctor or representative of CNA insurance. Our only communication was over the phone with an assigned rep. Yet, I had one of the “good” policies that said CNA would cover me if I could not go back to the kind of work I had been doing when I was injured, and that I would be covered as long as I was disabled. They cut me off, and I was told the only thing I could do was to file a petition for a grievance and wait 90 days before I had an answer. If I continued to be turned down, I would then have to appeal to Federal Court. Since they wouldn’t even send me to a doctor, it was pretty clear what the answer would be. It was also clear that this would be dragged out. I had to find an attorney.

I was not getting any better and, if anything, my situation was deteriorating under the stress of not knowing how I was going to be able to pay the rent and day-to-day bills and my COBRA $300 a month health insurance. I hadn’t filed for worker’s comp because the CNA Rep told me not to bother because they would take care of me. Also, I thought I would be going back to work soon. Like so many others faced with medical expenses I was forced to use credit cards to live while waiting for resolution. Eventually, I was forced into bankruptcy. Which was humiliating after a lifetime of good credit.

Like so many disabled individuals who find it difficult to muster the energy to fight a deep pocket insurance company, I needed help in working through the insurance company’s labyrinth of mythical proportions. I wouldn’t have been able to do it without the help of a friend.

Phone call after phone call to attorneys who handle insurance claims were met with the same response after telling them of my denial by the LTD insurance company-laughter.With the help of my friend he found an attorney who would see to me.

We located a law firm familiar with ERISA, and one that wasn’t on the side of insurance companies. At first, after wading through the contracts, it seemed clear that my claim against CNA insurance clearly DID NOT fall under ERISA guidelines and that the case could and should be heard in a California state court. Unfortunately, over a period of time, and several meetings, my attorneys were out maneuvered by CNA’s attorneys. CNA provided NEW material that made references to ERISA–(surprise…surprise). Though not the original contract which I possessed (which indicated that I, not the company, had purchased the LTD insurance from CNA and I not the company paid for it without any reference to ERISA) , the new material made references to ERISA.

This new material, and a similar case elevated to the 9th Circuit Court which had just been denied the right to litigate in State Court, meant to my attorneys, that this made my chances of recovery slim. My case now referred back to Federal Court and I was left SOL. However, I was told that if I tried to go after CNA through Federal court, CNA would charge me their attorney fees for what they had already spent on the case while I was trying to be heard in state court. They strongarmed me into signing a statement that said I wouldn’t pursue it further. They forced me to stop. What else could I do. I couldn’t risk losing in Federal Court and then oweing their attorney fees. I maintain they defrauded me. To date, about $500,000 worth. This is just the monthly benefits I didn’t get. Since I am still disabled and the policy was for my lifetime…the backpay keeps growing.

Fortunately, after being turned down the first time (common practice) and obtaining a social security attorney, SSDI approved my claim for 100% disability. I was able to start receiving Social Security Disability income. I also found a great Workers Comp attorney. After filing for bankruptcy, and moving to a lower income area I was able to just barely live on social security disability income. It took another 5 years to finally settle my workers comp claim. If it had not been for social security, I would have been destitute. As it was I was left with 7-10 years of bad credit and the humiliation of how it effects all aspects of ones life.

Long term disability insurance policies are worthless. The stats I found said that only 5% of the insured fight back when they are denied their rightful benefits–5%. That means I am in the 5% who fought and look what happened to me. I had all the reputable doctors, all the documentation, a signed contract that stated that the policy was between me and the insurance company, but when it came down to using it, they ‘found’ bogus “company” documentation that I had never been privy to, dated after my contract, that placed me “under ERISA guidelines. They defrauded me and there was nothing I could do about it. Nothing. No laws to protect me.

My only way to fight this injustice was through State Court and for a while I believed I might actually achieve justice. But the laws are set up for the insurance companies not people who are disabled. The judges side with the insurance companies a majority of the time. I get angry when I hear misinformed people making comments about ‘those people’ who collect disability income and spend leisure time water skiing or laying around pretending to be injured…stealing the federal or state money…you’ve heard the comments. I mean, after all, who do YOU believe, individuals who ask for disability income or insurance companies?

Most people who ask for help, are legitimate, the insurance companies lobby in Washington and State Capitols, sell commercials on tv and radio, insert lies as public service announcements to make us believe that “those people pretending to be disabled” are causing “your taxes or insurance payments to go up”. The truth is their greed is causing the insurance policies to go up. I have learned a lot in the last 8 years. I hope this will help others who might be going through this. Get Attorneys, and fight for your life. Maybe you’ll be the one. The one to win in court. The one to change the laws to protect yourself and others in need. Maybe you’re feeling great today…no one expects to be injured and unable to work. When we feel well we all think we’re invincible, but we’re not. Contact your representatives…ask about your rights. Protect your future and the future of your family.

Category : Bad Faith Stories

13 Responses to “Bad Faith Long Term Disability”

Car Insurance » Bad Faith Long Term Disability, on October 26th, 2007 at 12:57 pm Said:

[...] Disability Happens wrote an interesting post today on Bad Faith Long Term DisabilityHere’s a quick excerptBad Faith Long Term Disability October 25th, 2007 by Editorial The worst insurance policy to have … stop the insurance company from just doing it again after time has passed. You will not have much luck with your state’s Department of Insurance (DOI) either. Of all the state DOI’s, California [...]
Dennis, on October 11th, 2008 at 11:01 pm Said:

People purchasing LTD Policies should also understand that if there condition becomes permanent, there policy becomes just a short term loan! IF your job has caused you permanant disability and you file for Workmans Compensation, you will wait 2-3 years before you go to court. And if you win ANYTHING, you will have to give it all to your LTD Company. This also applies with SSD.
Bryon, on March 18th, 2009 at 12:09 pm Said:

I guess I am one of the fortunate ones, my Ltd was purchased at work through AIG. All but one of my representatives so far have been nothing but good to me and my condition is expected to be permanent, at 41 years old now I will need them for the next 24 years and am very thankful that I did buy this policy.

Had I not purchased this then I would be another statistic sleeping in a ditch while waiting for social security to finally give me a hearing, which by the way took 2 years to get. As far as a loan goes hmmmm.

Most social security checks are in no way going to be 60 percent of what you were making while working, and not tax free either. It isnt a loan at all, its an agreement to guarantee your income at 60 percent of what your salary was. Any other incomes are deducted from that yes but in the end you still end up making way more then if you didnt purchase the policy.

Workmans comp settlements can also be written to be taken into account for your life expectancy, In my personal case I was awarded a small settlement of 40000 in workmans comp, this was written so that it was to be for mostly medical payments both future and past and takin into account for 25 years so its only reduced my long term disability by 70 cents a week.

Although I share your pain in that becoming disabled has ruined me financially for life as well as your opinion that the laws need changed I cant agree with the policies being worthless. In time I may change this opinion as they do constantly give me grief in fear that someday I may get an adjuster such as you have had and end up being cut off for no reason. Have one now that has accused me of lying during several conversations, it is no fun to spend the rest of your life wondering whether this will be the week you lose your benefits and I do this every month opening the mailbox awaiting a check. It has however allowed me the time to get ssdi so if the time comes they do reject my claim I can at least survive.
Richard Brassaw, on March 18th, 2009 at 3:24 pm Said:

Byron,

It’s good to hear that someone is having good luck with LTD; no less with AIG!

You didn’t mention how long you’ve been receiving payouts on your LTD policy. Others have found that it is not uncommon for LTD payments to be paid out without problems for the first year (or two). It is after that period that the payments stop–especially when their former income was above $50-60,000.

If you find the ‘friendly’ insurance worker ‘helping’ you with your SSDI be on the alert. This is a LTD ploy that is reported to end up badly for those receiving benefits. IMHO you’re better off getting your own attorney to help you through the SSDI process.
Fighting against CNA, on April 25th, 2009 at 8:21 am Said:

I think you may want to find a new attorny. Because they had already starting paying you they can not just stop paying you. Once they pay you they take the responsiblity. That is under state and federal law. Maybe you should join the fight with the federal war zone contractors. This fight with the contractors is getting big and heading to congress. Maybe you should head with us. I know that My husband and I are along with thousands of others are also fighting the way CNA and AIG does buisness. Look into a few of our sites. If you look at our facebook cause you will find MSSparkys page, and thewarhascomehome page sites that help you find lawyer that will actualy know how to fight CNA on your behalf not a lawyer that will help you loose your money. Please feel free to cantack me.
Someone on your side, on April 25th, 2009 at 8:26 am Said:

Come look at our site. CNA is known for this. With the people we are getting together maybe we can help you find a lawyer that can help you with the problem that you have. Take a deep breath. Come look at our sites. We are a group of war zone Contractors injured overseas and their wives.

Come check out this site and it has links to many many others. This will help you find lawyers that don’t or havn’t work for CNA.
Richard Brassaw, on April 25th, 2009 at 8:46 am Said:

CNA Fighters,

You mention that once an insurance company starts paying they are taking responsibility. One would think so, but under Federal law they can do pretty much what they want, when they want. In 1945
Congress passed the McCarran-Ferguson Act in 1945 that specifically prohibits Federal oversight of insurance policies.

What ability the states were given, by the ERISA act in 1974 to regulate insurance policies, were rendered virtually useless by a Supreme Court ruling in 1984.

Once a policy falls under ERISA it must be heard in Federal Court, which raises the stakes. Fewer attorneys are qualified to work in Federal Court, which means they are more expensive. Also, the law is written so that these claims cannot get punitive damages. As a result the most you can hope for is reactivation of a claim.

The more complex the claim the greater the chance the insurance company will fight to minimize each payment request. Wait. It gets worse. Those with Long-Term-Disability (LTD) who earned above 50K per year stand a good chance of having their claim denied after a year or two.

The disabled who need the insurance money to survive are typically unable to fight the behemoth insurance companies. I agree Congress needs to shake things up and they can start by getting rid of the McCarran-Ferguson Act .
Dennis, on May 26th, 2009 at 9:57 pm Said:

PLEASE PEOPLE! WAKE UP! I paid into a LTD policy through MetLife for 25 years! Theses LTD Policies are only LOANS! They should be renamed as “Long Term Disabity Loans”. Most people will then have a second thought about purchasing policies like this if they were told the truth about the policy. Companies like MetLife use cute little SNOOPY! Others use cute liite white ducks to push there LTDL’s on people. And just think, they took that cool Camel off the airways!
Kathie Clohessy, on June 10th, 2009 at 2:12 pm Said:

I would like to clarify just a bit about ERISA. ERISA is a Federal law-that is why any legal action must be taken in Federal court. The only time ERISA comes into play is when a LTD policy (or ANY insurance policy) is paid 100% by your employer. If you contributed at all to the premiums you DO NOT fall under ERISA statutes and no court in the country will say that you do.

The underlying concepst that make ERISA a nightmare are the following:

1. Under ERISA during the first 2 years of your disability you must be disabled from your regular job..not hard to prove, However, after 24 months, you must be disabled from ANY occupation for which you may reasonably be qualified or become qualified. This includes job re-training. This is the point at which you are open to any B.S. the insurance company wants to throw at you…In fact, based upon your former occupation most of the big insurers have pre-selected jobs that they will claim you can do. For instance, I was a staff nurse; they said-despite the fact that I was still classified as “sedentary” by their own IME, and did not have a BS degree, claimed that I could be a Director of Nursing in a Nursing Home, or a Nurse Consultant-or what is known as a Case Manager. Both of these jobs are not the least bit sedentary and every one of them requires that you have a least a Bachelor’s degree. But the insurer’s do not care! And this is why…

2. YOU cannot sue the insurance company under ERISA law. Why? Because you did not pay for the policy and therefore have no legal standing to sue!!! That’s right. Because your employer purchased the policy for you, only they have the right to sue and the insurers know they will never do it. The only way you can sue the insurance company is if you ALSO sue your employer, or former employer.

3. Furthermore, under ERISA you cannot sue for damages, bad faith, or any of the mitigating circumstances that usually create big awards. You just can’t. In fact, you are not even entitled to a trial, to be heard by a jury or present evidence. If you succeed in finding an attorney who will bother with it at all, under ERISA you get a HEARING by a judge or perhaps even a Clerk of the Court. At this administrative hearing the only evidence is the file that the insurance company has compiled on you and what your attorney has provided for them– which should be as much as he can possibly come up with to prove that you could not do the job they say you can. Based entirely on this file, the judge or Court Clerk will determine if you were improperly denied benefits. If you were, you will get your back benefits-just as the person who wrote about being kicked off disability after 8 years received-and be put back on disability.

4. The clincher….YOU must pay the attorney usually from the benefits you get that were improperly withheld; the attorney gets his/her money before you even see it. PLUS you have absolutely no guarantee under the law (ERISA again) that the company cannot do this to you in another two years-and another and another. Unfortunately, the person who said you cannot be denied disability benefits once a decision is made in your favor in is DEAD WRONG!

I was very fortunate in that I quite by accident found an attorney who would take ERISA cases-albeit only those he was almost positive he could win. And I won; but we did not go to court. Instead, he did the only thing a smart attorney WILL do -he negotiated a settlement. The insurance company already knows exactly how much you MAY cost them if they pay your benefits until you hit 65….It is figured on your age and your benefit amount times a percentage that they use from an actuarial table that figures out how likely you are to die in that amount of time. So if your attorney can convince them with a strong case in your favor that they would be better off paying you a lump sum that is less than that amount…you may get a decent amount of money. But there are still a few little bugs that will bite you in the butt before you’re done..

5. You still pay attorney fees and they are HIGH. You must pay Federal Income Tax on the money you get AND it is taxed as INCOME….because ERISA looks at it as SICK PAY.

I went through this, and I had a great lawyer, but in the end, of a settlement of over $160K I actually got to keep $95,000. It could have been a little less if I had taken the pay out over 2 years-the maximum amount of time you can -but after figuring the amount I would save I decided not to-although I later wished I had.

So, as an experienced ERISA “winner”- I offer this advice…First, Write your Congressmen once a week and ask them to force the feds to repeal ERISA-it is the most unfair laws to consumers in the entire country. Of course, you are fighting the most powerful LOBBY in the country, but with enough letters you never know. Write to Obama, too.

2. Never ever work for an employer who insists on paying for any of your insurance. As long as you pay any part of it you have standing and ERISA is out the window.

3. If you get caught in an ERISA nightmare, call every attorney listed in your phone books and keep calling until you find one who will help you. Tell him you are not interested in going to court-you want to negotiate a settlement. If you have a good case, he or she will do it.

4. If you don’t have a good case, do not waste your money. You will lose. Even after winning my settlement in 2001, after 9-11 drove interest rates into the basement, I wound up using the principle for living expenses (I also had Social Security and still do) and it was gone in about 5 years. (I put some of it down on a home-which, thanks to Bush et al I wound up selling at a loss in 2006) Now I live in an apartment and the settlement is long gone, so I live on Social Security disability anyway…But at least I can say I beat those crooks at their own game and for a little while I still had some money to spend. But I’m still not sure it was worth it.

Hope this long post helps someone out there.
KC
Terry, on August 25th, 2009 at 1:25 am Said:

Katie can you list the name of your lawyer. I too am having trouble locating a lawyer who is willing to accept my case.
Vicki, on December 12th, 2009 at 5:52 pm Said:

I too have had nothing but trouble with my LTD insurance company, mine is Aetna–after a year they quit paying me all together without consulting my doctors who disagreed with Aetna. As SSD had not kicked in by then, I had no income, lost my house, car etc. Aetna did send me to their own doctor, who got mad at Aetna saying I was still very sick, and they had made me worse by pulling the financial rug out from under me.
Aetna started paying me again, but did not offer to compenstate me for the loss of my house/car etc due to THEIR error–and as people above have stated, it is IMPOSSIBLE to find an attny to sue an LTD company under the ERISA laws.

They paid for about another year and then quit again, causing me to lose my new house and car once again….it is bad to have to keep moving when you are healthy, but when you are sick it is even worse to have to lose your home due to an insurance companies cost cutting whims.

I am now living miles away from friends, families in a small town, carless, in a house that needs a lot of repair just to have an affordable (ie just on SSD) roof over my head, I have not gotten better due to this treatment, when I think I could have been back to work by now if I had been treated fairly by Aetna and had the money to get the medical treatment I needed these past few years. I don’t think your LTD company should be making you sicker than you were to begin with!

I would suggest that everyone reading this IMMEDIATELY contact their US Senators and Reps and demand they change the ERISA laws to protect the patients from these insurance company abuses rather than protect the insurance companies. They should not be allowed to drop patients like this! Write them, email them, phone them while this health care stuff is in the news…the House bill did NOT correct the ERISA laws, so also contact Ms Pelosi, if you are not in her district, then you have to contact her via phone or her House Speaker website.

MAKE A STINK!!!! Have your relatives also affected by your problems with the LTD insurance companies contact the elected reps too, I suspect that the elected reps are in bed with the insurance companies, I especially suspect this of Sen Dodd and Sen Lieberman, as Aetna is HQ’d in their state and yet, these abuses are not addressed by them in the least—probably all golf buddies.
But they DO bend under some pressure,so call call call, email, email, email, get as many as you can to do this ASAP!
Jim Petuch, on September 8th, 2010 at 4:42 am Said:

Any known disabilit/ERISA lawyers in NJ? I am currently on SSDI and Aetna LTD but my former company and Aetna are trying to drop me as I am 5 months short of age 50. I fall under Vicki’s situation listed below. Aetna is trying to pull the FCE NONSENSE on me and I know I have to attend but I will be dropped afterwards.Please reply to this board.thanks.
Jack L., on February 14th, 2011 at 2:05 pm Said:

I went thru the same crap with Liberty Mutual dropping me after 2 checks. Had all the documents, one foot tall of documents doctors notes saying I was unable to work ever! The only chance you have is to get a strong firm with a backgronud dealing with this wholesale screwing. We had plenty in the bank and have since lost nearlly all of what we have and went from a six figure incme to poverty. ““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““““`111“ ———————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————————–

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Bad Faith Long Term Disability

13 Responses to “Bad Faith Long Term Disability”

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