There is a very disturbing trend going on in Michigan in which persons approved for a long-term disability claim out of the blue six months later gets their benefits cancelled by the insurance company. You can just imagine the havoc that causes in that person's life.
The reason is that the Employee Retirement and Income Security Act of 1974 (ERISA) was rigged by Congress and further rigged by the Courts to be strongly biased against in favor of the insurance company paying Long Term Disability (LTD) benefits to an individual.
Insurance companies sell group policies that some courts have ruled provide little or no coverage. Congress approved ERISA to "protect" employees' pensions but in doing so unwittingly gave disability insurance companies a free pass to play the game on a field that is not level.
That practice has been challenged by a lawsuit against insurance giant UnumProvident (Unum) charging that the insurance carrier devised a scheme to illegally deny or terminate the long-term disability claims of thousands of people in violation of ERISA. The lawsuit charges that Unum cut costs by terminating claims by:
· providing financial incentives to in-house physicians who would rubber-stamp previously made business decisions
· authorizing more senior in-house doctors to change the written reports of other "uncooperative" in-house doctors in order to justify a claim denial or termination
· stopping payments to policy holders without any explanation given for termination
In recent settlements Unum has agreed to reconsider some 200,000 denied disability claims. The company is facing a potential $145 million fine in Maine alone. And this is only one insurance company; there are others engaged in the same kind of deceptive practices.
The fact that insurance companies without good reason are terminating LTD claims previously approved is one more attack made to rob well-intentioned, honest citizens of the benefits they have coming. I find this to be absolutely horrible. It is bad enough that insurance companies, without good cause, will routinely deny disability claims when first submitted and force applicants to appeal or resubmit claims. This is a long-standing ruse of LTD insurance companies, and it's wrong!
Disabled workers how are denied benefits must appeal not once but twice to the insurance company, a process that takes at least six months and requires patients to track down all their medical records and submit every document that they might later want to use in a lawsuit. After a second denial, the insurer might send a case for an "independent" medical review by a doctor chosen by the insurance company.
ERISA law, augmented by federal court rulings, does allow workers denied benefits to seek a limited bench trial - a mere review of the administrative record, no new evidence, no witnesses, no jury. But federal law only allows the plaintiff to sue for the original benefits. There are no payments for damages or pain and suffering.
One study of 576 lawsuits filed in federal court against the seven largest disability insurers (MetLife, Unum, Prudential Financial Inc., CIGNA Corporation, Standard Insurance Co. and Aetna Inc.) found that insurance companies:
· Regularly deny or terminate benefits to individuals even after they determined to be disabled by the federal government and approved for Social Security Disability payments.
· Hire contract doctors who routinely reject the opinion of treating physicians without ever having seen the patients.
· Provide incentives to employees to deny and terminate claims, typing performance evaluations to meeting money-saving goals.
· Force plaintiffs to wait two years and eight months on average form the time they are disabled to the time their cases are resolved.
· Face no peril for repeatedly denying or terminating legitimate claims because federal law does not allow for any damages.
Many of the denials or terminations involve long-lasting illnesses that are hard to prove, such as chronic pain, back problems, closed head injuries or fibromyalgia. But some claims involve heart disease, blindness, migraines, or cancer - diseases which are easier to establish.
The rush to denial by insurance companies also is a practice followed for government benefits such as SSD and SSI: Social Security denies almost 70 percent of its initial disability claims while 60 percent of those who appeal eventually win.
Because the deck is stacked against disability claimants form day one, and all through the process, there is no question in my mind that the injured person early on in the process should contact an attorney who specializes in personal injury litigation, especially in the fields of long term disability and/or workman's comp. An applicant living in Michigan who is denied LTD, SSD, SSI or workman's comp needs an attorney from Michigan because of how Michigan No Fault Law and other Michigan laws impact these areas.
The permanently injured person soon learns that the only ones looking after their best interests are themselves and their attorney.
By Terry Cochran
About the author:
Terry Cochran, senior partner in Cochran, Foley & Associates, P.C., a Michigan law firm specializing in personal liability, medical malpractice, and SSD/SSI appeals. Cochran does not represent insurance companies or corporations but instead bases his practice upon representing individuals and families. http://www.cochranfoley.com 800-322-5543. http://www.youtube.com/watch?v=TxMhKUskrMc
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