Long term disability policies frequently have two different definitions for disability. The first provides benefits if one is unable to perform their “own occupation.” To determine benefits under these criteria, the carrier often looks at the “material and substantial duties” of the insured’s occupation and whether the insured can perform those duties with his or her restrictions and limitations.
After 24 months, the criteria often change to whether the insured can perform “any occupation” for which he or she is suited by education, training and experience. Most, but not all policies, also expressly include “station in life” criteria. This means the carrier must also consider the insured’s prior earnings and any alternate occupation identified by the carrier must pay earnings commensurate to the insured’s prior occupation.
We frequently see carriers terminate benefits at the “any occupation” phase of the Plan based on mythical occupations. For example, Hartford has terminated benefits for our clients, stating that the insured can be a “Lens Inserter” or a “Jacket Preparer.” The carriers take the position that it does not matter if the job actually exists in the national economy. Since the occupations are identified by the outdated Dictionary of Occupational Titles, the carriers believe that they are suitable alternative occupations.
The California Department of Insurance and other regulatory agencies have imposed different criteria on Cigna as a result of regulatory investigations. As a result, in California, Cigna has agreed to use the “California definition” of disability in its claim administration. Under these criteria, Cigna must consider whether an employer would actually hire an insured, with his or her limitations. The job may not be mythical or fanciful.
Adverse claims decisions should be closely scrutinized to review not only the medical evidence relied upon by a carrier, but also the vocational evidence. Did the vocational representative review the actual labor market, or just an outdated government resource regarding the existence of alternative occupations? Did the vocational representative consider all of the evidence in the file, or just rely upon the insurer’s inhouse medical reviewer? These are issues that should be addressed head on in an appeal and evidence should be submitted showing that the insurer’s analysis is flawed.
If you have questions about how your insurance company is handling your long term disability policy, please contact Kantor & Kantor for a no-cost consultation. We can be reached at (818) 886-2525 or use our online contact form