Disability Insurance Claim Advice
Questions to Ask Before and After You File a Disability Claim
Dynamic Chiropractic Practice Insights, July, 2012
By Arthur Fries, RHU
Acting as your own advisor can be economically devastating in today’s disability claim environment. An experienced disability claim consultant can help answer difficult questions and help you prepare to communicate effectively with insurance companies. Here are a few of the questions such an expert is likely to address.
What’s in the Policy?
I continue to see chiropractors who continue to work in spite of medical symptoms that indicate they should stop. Sometimes, reducing your hours can help and a >partialdisability claim would be appropriate. In other situations, a complete divorce from chiropractic adjustments may be the order of the day, which means filing for >completedisability.
If you have a “pure” (your occupation definition for total disability) in your disability contract, you can usually continue to own the practice and work in a management/marketing scenario. Another chiropractor could be hired to fill in for you or an associate chiropractor working part-time could have their hours increased to working full-time.
In this case, you could still be considered totally disabled even though the practice continues to earn money for you.
On the other hand, if the definition of total disability in your policy covers you for “Your Occupation,” but also states that you cannot working any other occupation, then working in a management/marketing capacity will be defined as a partial disability and your earnings will be considered.
If, after overhead expenses, you do not have a 20 percent loss of earnings (for the practice), you will collect nothing. And some insurance companies, even with a 20 percent or more loss of earnings, will still pay you nothing. So, it is important to clearly understand the definitions in your disability contract(s) so you know which direction to lean.
From a Partial Claim to a Total Disability Claim
You have reduced your hours or eliminated one of your chiropractic adjustments (e.g., side posture) and you are collecting on a partial (residual) disability claim because of reduced earnings. Over time, your medical symptoms have worsened, whereby another chiropractor must be brought in to the practice to replace you.
Since they may not be “you” in terms of experience, dedication and being a “major league player,” their “minor league tendencies” might cause patients to leave the practice for a competitor. Or, you might have to pay another chiropractor so much money that it is not economically feasible; you will have no way of earning a profit.
In this case, you would want to sell the practice as quickly as possible. I recommend that you use a practice broker experienced in working with professionals (or even limited to working with chiropractors), or certainly a business attorney who can help draft the proper contracts.
Do not call or notify the insurance company that you are planning to go on disability until the practice has been sold and/or you stop your clinical duties. Doing so can jeopardize your rights and the insurance company will not give you an answer until you actually stop clinical duties.
It is crucial that you advise your treating physicians/chiropractors that your condition has worsened before you stop clinical duties. In addition, all my clients provide a “history letter” detailing the reasons for a transition from partial to total disability.
Consider this scenario if you have a “not working in another occupation” policy: You stop working clinically and manage the practice for a year. Then you sell the practice. In this case, the insurance company will consider you a manager, not a chiropractor, and the definition of a manager will apply. So, if your medical symptoms would prevent you from working as a chiropractor, but don’t prevent you from working as a manager (in a chiropractic office or any type of office), you will receive no disability benefitsunder such policies.
Timing is very important when it comes to a disability claim, and knowing when and how to quit working can make the difference between receiving substantial benefits and receiving nothing.
How Do You Handle Your Social Life After a Claim?
There are many insurance companies that use video surveillance as an important tool in their arsenal of weapons to discredit your claim. You have to make sure you are not doing something that is in conflict with your medical symptoms; something that could threaten your disability status from an insurance perspective.
If you had to reduce your hours or completely stop chiropractic adjustments because of a rotator-cuff problem, then guess what? Throwing a football or baseball with your 10-year-old, would most certainly be in conflict with your symptoms. Skiing or being a “surfer dude” with a low back problem would also be in conflict with your symptoms.
Have a lousy low back, or a shoulder or hand problem? Walking your 80 pound Labrador retriever, which is pulling you in all sorts of directions (in spite of a choker chain), might not be the best way to act for one with a disability claim.
This doesn’t mean you cannot do any type of sports or activities. What it means is that you can do some activities within your limitations.Letting the insurance company know what activities you perform using the proper language will avoid the “gotcha syndrome,” which can be the basis for a termination or denial of a claim.
Knowing how insurance companies do video surveillance is also important, as well as knowing what is permissible and what is not. For example, parking a van in your neighbor’s driveway is a “no-no,” as well as following 10 feet behind you in a van while you take a soft stroll with your neighbor.
If a Disability Claim is Denied or Terminated, What Are Your Options?
There are four options if your claim is denied or terminated outright:
- You can roll over and play dead and do nothing.
- You can appeal the claim yourself, which would be the equivalent of filing a tax return instead of letting your CPA prepare it.
- You can hire an attorney. Some (very few) will charge you an hourly rate and ask for an up-front retainer fee. As the money gets used up based upon the attorney’s time, you will be asked for more money. Amounts could reach $75,000 to $100,000 and that is even if the case is settled (which many are) and another $50,000 or more if you go to trial, all the expenses of which are being paid on your end.
Most of the attorneys who specialize in disability claims will charge you a “contingency fee.” That means they assume all costs initially and if the claim is settled (often for 40 cents on the dollar or less), the attorney will get paid one third or 40 percent of the settlement amount plus all the costs they advanced. If you had a $2 million potential payout, you might end up with 20 cents on the dollar net or a mere $400,000.
Most lawsuits wind up in federal court (moved from local court), with the difference being the following: A federal court judge can pick as many people as they want to serve on the jury (8, 10, 12, 14) and in a trial, everyone must vote favorably for you; otherwise there is a “hung jury” (which in essence means you don’t win) and your attorney will then suggest you go back to the arbitrator to see if there can be a “meeting of the minds,” which means a much lower settlement.
Wanting to go another round in trial might be offered, with additional expenses piling up in addition to the mental anguish you will suffer.
- Hire a consultant who is highly experienced in disability claims. The consultant will help you prepare an appeal for a small retainer fee and charge an hourly rate against that fee. The total cost is usually less than $10,000, even when costs exceed the amount of the initial retainer fee.
Keep in mind that the foregoing are just some of the questions you will have to deal with if you go on a partial or total disability claim. For the following reasons, you may want to think twice before deciding to go it alone if this happens:
- There are many forms to complete, both initially and on an ongoing basis. In addition, many of the questions that you will be required to answer demand a very thorough understanding of the subject matter.
- The importance of answering the questions correctly cannot be overstated.
- Many hours of work are usually required. Submitting the initial claim form is only round one.
- You take a simplified (“minor league”) approach when your needs are actually “major league.”
- Not understanding the meaning of words as they apply to a disability contract can cause you to prejudice your rights. For example, what’s the real meaning of “pre-existing condition?” Does the wording “fraudulent misstatement” change the above: Does the state in which you reside have an effect on how the insurance company interprets these clauses?
- Finally, and most important, do you know how to maintain dignity, self-respect and credibility in your relationship with your insurance company?
The bottom line is that a disability claim consultant may be the best investment you can make in successfully and effectively submitting your claim.