LTD FAQ

The following are some frequently asked questions that I receive as a Louisiana long-term disability attorney. They may answer some of the questions you have regarding your long-term disability insurance and/or your long-term disability insurance denial. If you have a question that is not answered here, please call or write Louisiana Disability Lawyer, Loyd J. Bourgeois.

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What is a substantial and material duty?
What is the “any occupation” review?
Why are my benefits less than what I paid for or was entitled to receive?
What is an elimination period?
Who decides if I am disabled?
What is ERISA?
How long do I have to appeal a denial?
Do I have to go through the administrative appeal?
Do I have to attend the examination set up by the insurance company?

For more LTD information, read our Long-Term Disability Insurance blog postings.

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What is a substantial and material duty?

These are the duties required for the performance of your regular occupation that cannot be reasonably omitted or modified. For example, if you are a truck-driver and we removed sitting for long periods from the job description, your occupation would no longer be considered truck driver.

  • Material duties are subjective tasks specific to a particular occupation. For example, a salesperson must have the ability to communicate with prospective client. If this subjective task (“communicate”) is removed from the job description, the description would no longer describe a salesperson.
  • Substantial duties are objective tasks required for the completion of a specific occupation in the course of an 8-hour day. For example, if you are a process operator, substantial duties may include sitting for 40% of the time and standing for 60% of the time.

A rule of thumb in determining whether you are unable to perform the material and substantial duties of your occupation is to determine whether or not you are able to do those things that comprise at least 20% of your workday. For example, if you are a computer programmer but can only type for 15 minutes out of every hour, then you cannot perform your occupation.
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What is the “any occupation” review?

In most employer provided long-term disability insurance plans, the definition of disability changes after you have received long-term disability benefits for 24 months (in some plans this time period could be shorter or longer – it depends on the specific policy language of the plan). When the definition changes, the standard of disability goes from whether or not you could perform your own occupation to whether or not you can perform any occupation.

The “any occupation review” is done by the long-term disability insurance company at or around the time the definition of disability changes in your policy. The change in definition gives the insurance company an opportunity to deny perfectly valid disability claims under the guise of the claimant being able to perform some type of occupation.

In some policies, the definition requires that you be suited for the occupation by age, education, training, or skill, while others require that the occupation result in you earning at least a certain percentage of your pre-disability gross income. However, many policies place no restrictions on the type of occupation the insurance company can say you are qualified for.

In doing their “any occupation review,” the insurance company will often use a vocational expert (VE) to opine on whether or not with your disability you can perform the substantial and material duties of another occupation.

If you are faced with an “any occupation review” or had your long-term disability benefits denied after an “any occupation review,” you should contact a long-term disability benefits lawyer who knows how to attack the insurance company’s determination that you can perform in another occupation. Back to top

Why are my benefits less than what I paid for or was entitled to receive?

In almost all long-term disability insurance policies received through employment, the insurance company is allowed to offset (or deduct) amounts you receive through other means for your disability. This deduction is dependent on the specific language of the policy, but is usually a dollar-for-dollar deduction of other benefits such as social security disability, worker’s compensation payments, other long-term disability benefits, disability retirement payments, and a litany of other payments you may receive.

For example, if your gross income is $2,500 per month and your long-term disability provides for 60% of your gross if you become disabled, your ltd payment should be $1,500. However, if you receive social security disability (SSDI) benefits in the amount of $850 per month, your long-term disability payment will be reduced to $650 per month($1,500 minus $850). You will not receive $2,350 ($1,500 plus $850).

In some instances, the amount you receive for these other benefits (including SSDI) will reduce your long-term disability monthly pay significantly and may result in you receiving only the minimum payable under the policy (usually somewhere between $25 and $200 per month).

For this reason, it is important to read your long-term disability policy and get a firm grasp on the total amount of money you will be receiving from all sources. Back to top

What is an elimination period?

An elimination period is the amount of time you must be disabled under a disability insurance policy after filing the claim and prior to receiving benefits. Many policies have a 90-day elimination period, but other periods do exist. Remember, you will not get any benefits for the duration of the elimination period, even though you are disabled.

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Who decides if I am disabled?

Unfortunately, the long-term disability insurance company makes the decision on whether or not you are disabled. They have this power because the United States Supreme Court has ruled that the insurance company can reserve to itself the discretion to make such decisions. After the ruling, all long-term disability insurance companies reserved the power to themselves.

Thus, even though you may have a favorable doctor’s opinion, or several, and other supporting documentation, do not be surprised to receive a denial. Why? In the face of such documentation, the long-term disability insurer will often have their internal company doctors, or their own consulting doctors, render an opinion on whether or not you can work with your ailment or whether or not you are truly suffering from your ailment. In the insurer’s discretion, they can decide to rely on this one opinion from a doctor who never treated or examined you and deny your claim. Back to top

What is ERISA?

ERISA stands for the Employee Retirement Income Security Act of 1974. ERISA is a federal law that sets minimum standards for retirement and health benefit plans in private industry. ERISA does not require any employer to establish a plan. It only requires that those who establish plans must meet certain minimum standards.

ERISA covers retirement, health and other welfare benefit plans (e.g., life, disability and apprenticeship plans). Among other things, ERISA provides that those individuals who manage plans (and other fiduciaries) must meet certain standards of conduct. The law also contains detailed provisions for reporting to the government and disclosure to participants. There also are provisions aimed at assuring that plan funds are protected and that participants who qualify receive their benefits.

Because ERISA is a federal law, and your employee benefits plan is governed by it, any dispute you have with your long-term disability insurer will be heard in federal court and not by your local state court. Back to top

How long do I have to appeal a denial?

The answer depends on where in the process the denial was rendered. If you were denied by the insurance company, either initially or after receiving benefits, you generally have 180 days from the date of the denial to request an administrative review. If your administrative review resulted in a denial, you may have up to three years to bring a federal court claim depending on the statute of limitations for similar claims in your state. For example, in Louisiana, I want to bring a long-term disability denial case to federal court within one year from the administrative denial. Back to top

Do I have to go through the administrative appeal?

Yes. Under ERISA and federal law, you must exhaust your administrative remedies. That’s a fancy way of saying that you must follow the process. If you are denied by the insurance company, you have to appeal first to the insurance company again for administrative review. If you are still denied, then you can take the matter to court.
However, if you try to skip the administrative review and go directly to court, the court will most likely say that you failed to exhaust your administrative remedies and can dismiss your appeal. Back to top

Do I have to attend the examination set up by the insurance company?

In most cases, yes. However, the terms of the long-term disability policy will dictate whether or not you must comply. Most policies require that you cooperate with the long-term disability insurer’s investigation and/or see their doctors. Your long-term disability benefits policy will tell you this information, which is why you need to read it carefully.

Another question is should you attend this visit alone. In my opinion, you should not. It is not unheard of for these consulting examiners to make reports to the insurance company that are completely different from what occurred. You will be well served to have a family member or close friend travel with you to the exam and remain in the room with you the entire time. After the exam, you should write down everything that occurred and request a copy of any documents that the examiner completed. Review the documents carefully before leaving and bring any inconsistencies to the attention of the examiner immediately. Back to top

For more Long-Term Disability information, read our Long-Term Disability Insurance blog postings. If you have specific questions about your case, call New Orleans area disability attorney, Loyd J. Bourgeois.