Our Chicago Disability Attorneys Answer Common Disability FAQs
In Illinois and elsewhere — whether you are covered by an individual disability plan or an employer-sponsored plan that is governed by ERISA rules — you may be entitled to receive disability benefits if you are suffering from an injury (or other condition) that qualifies as a disability in accordance with the language of your plan. These benefits serve as a critical form of income protection and wage replacement in many cases, particularly those where the policyholder does not have a wage-earning spouse or significant other assets that might provide a financial cushion, so to speak.
Though disabled policyholders often find themselves in desperate circumstances and may have a legitimate claim for disability benefits, insurers employ clever strategies that are intended to deny, delay or otherwise interfere with the policyholder’s ability to secure their full benefits amount. You need not resign yourself to the tricky maneuvers of your insurer, however.
We can help.
If your insurer has denied your claim or has acted negligently or in bad faith to prevent you from obtaining your rightful disability benefits, you may be able to challenge the adverse determination of your insurer or potentially even sue and for the benefits owed to you. We encourage you to contact our experienced Chicago disability attorneys today for further guidance on how to proceed with your claims.
The law surrounding disability benefits can be confusing for many first-time claimants, and some questions tend to crop-up more than others. For the sake of clarity, let’s explore a few of these concerns.
Frequently Asked Questions (FAQs)
Q: What is an “own-occupation” disability?
A: Definitions of disability vary quite a bit from plan to plan. Most standard short-term disability and individually purchased disability policies require only that the claimant demonstrate that their injury/condition render them unable to perform the duties of their “own occupation.”
For example, suppose that you are a dentist and you severely injure your neck. Though you might be perfectly capable of performing a different job — assuming your disability coverage is based on an “own occupation” definition of disability — you would likely be entitled to receive disability benefits.
Most long-term disability plans provide for 24-months of benefits, after expiration of the elimination period, under an “own-occupation” definition of disability and then requires that you be disabled from “any occupation” in order to be eligible for benefits.
Some stricter plans only have an “any occupation” definition of disability. If your plan is based on an any-occupation definition of disability, you cannot secure benefits unless you demonstrate that you are unable to perform any alternative job (that you would otherwise be qualified for given your age, training, experience, etc.).
Q: How does short-term disability insurance and long-term disability insurance work?
A: Short-term disability coverage and long-term disability coverage are related, though it’s not necessarily the case that policyholders have access to both forms of coverage.
Short-term disability insurance coverage is a temporary wage replacement that usually lasts for 26 weeks or 180 days after the occurrence of a disability. Waiting periods tend to be short (in some cases, 7 days). By contrast, long-term disability insurance usually has a minimum period of coverage that lasts for 24 months, and in some cases, may last until full retirement age.
Short-term disability insurance and long-term disability insurance are often packaged together, in which case the short-term disability insurance coverage will transition naturally into long-term disability insurance coverage, assuming that you still qualify as disabled at the time. It’s worth noting, however, that the conditions for qualification (i.e., own occupation vs. any occupation standard) may change.
Q: Can I receive private disability benefits if I am receiving money through other sources of income (or benefits)?
A: Yes, you can receive private disability benefits, even if you are receiving funds through supplemental income sources, or other wage replacement benefits, such as Social Security Disability Income (SSDI) or workers’ compensation — there may be an offset for certain benefits, however.
When it comes to supplemental income sources, such as passive income, inheritance, personal gifts, etc., your private disability benefits are generally entirely unaffected. Private disability benefits are a form of wage replacement, they are not income-variable. Whether you are rich or poor, you are entitled to the full disability benefit that was bargained for through the insurance contract.
Now, when it comes to SSDI benefits, most ERISA long-term disability plans have an offset that requires you to apply for SSDI benefits. However, private disability policies usually do not have the same application and offset requirement. This is policy specific though and our experienced disability insurance attorneys are available for consultation in order to help you understand your policy.
Q: What is an ERISA disability claim and how does it differ from non-ERISA claims?
A: The Employee Retirement Income Security Act (ERISA) was established in the 1970s with the intention for providing additional protections to benefits plan participants from the misconduct of Plan Administrators, among others. In the context of today’s insurance disputes, however, ERISA coverage may ultimately give policyholders fewer protections than non-ERISA plans.
ERISA regulation covers employer-sponsored insurance plans that are specifically related to employee benefits, such as employer-sponsored disability and health insurance coverage. If you have an insurance dispute that arises out of an ERISA-covered plan, your claims will be subject to federal law — not Illinois state law. Federal ERISA rules limit your ability to secure damages for bad faith, special damages, emotional distress, and more.
ERISA application may not always be a negative, however. ERISA plan participants in some circuit courts can have the denial of their benefits claims evaluated under the de novo standard, which means that the court will not defer to the factual determinations of the Plan Administrator. Instead, the denial of benefits will be considered with a “blank slate,” given the evidence.
Q: What is a bad faith claim?
A: Insurers owe their policyholders a number of duties. Among these is the general duty of good faith. Insurers must act in good faith towards their policyholders when handling their insurance claims — this duty is imposed on insurers because they have specialized knowledge that gives them an unfair advantage in the claim evaluation and payout context. Bad faith, however, does not exist and apply to insureds in every state. Some states have either common law or statutory bad faith law, which gives insureds the right to file a lawsuit against an insurer based on that legal theory.
If an insurer violates their duty of good faith, you are encouraged to seek legal help from one of our Chicago disability attorneys. If you purchased your policy in a state where there is bad faith law, the insurer may be liable for significant compensatory damages. In particularly egregious cases, you may be able to bring a separate fraud claim and the court may award punitive damages.
Bad faith conduct includes, but is not necessarily limited to:
- Fraud and other knowing misrepresentations
- Unreasonable delays in claim processing
- Intentional interference with claim processing
- Wrongfully denying a legitimate claim in order to force the policyholder to expend additional effort through litigation
- Refusing or failing to payout benefits (for an accepted claim)
- Failing to adequately investigate the submitted claim
- Failing to maintain consistent communication with the policyholder
- And more
Generally speaking, the court will find bad faith if the insurer has conducted themselves in a vexatious, unreasonable, or outrageous manner. They will make this determination on the basis of the total circumstances — for example, if the insurer failed to payout your benefits, but an investigation reveals that they simply had the wrong address and contact information in their system, it is unlikely that the court will find the insurer liable for bad faith (though they will almost certainly order the insurer to make the necessary payments).
Q: My insurer has denied my disability claim on the basis of an exclusion, but the exclusion seems ambiguous. Can I challenge their denial?
A: You can — and likely should — challenge the insurer’s denial of your disability claim, so long as the claim is otherwise legitimate. In Illinois (and in other jurisdictions), whenever there is genuine ambiguity in the language of an insurance exclusion clause, the courts are required to strictly construe that ambiguity in favor of the policyholder. Given the fact that courts strictly construe ambiguity in favor of the policyholder and against the interests of the insurer, your insurer is likely to argue that there is no ambiguity. That being the case, it’s important to work with one of our Chicago disability attorneys who has experience handling such disputes — he or she will have to gather and introduce outside evidence that can be used to support your “ambiguity” argument.
Q: Can I obtain disability benefits if I am still capable of working, but not at my full capacity?
A: Every insurance policy is different, so there is no universal answer in this regard — whether you are entitled to disability benefits for a “partial” or “residual” disability depends on the specific terms and conditions of your plan. Disability insurance plans that include partial or residual disability benefit coverage allow for the receipt of a reduced amount of benefits when the policyholder has not necessarily been rendered totally disabled but still has a loss of earnings. The conditions for partial disability qualification may be quite specific.
For example, if you can only work part-time, the insurer may require that you show that (due to your disability) your performance has been reduced by a particular percentage, or that your scheduled hours have been reduced. If you meet the requirements (i.e., 25 percent fewer hours worked per week) then you will qualify for a partial disability benefit.
Q: Should I apply for benefits if my disability was caused by a pre-existing condition?
A: Perhaps — but it depends on the details of your insurance plan. Many plans exclude all disabilities caused by pre-existing conditions if the claim is filed within a specific period of time running from when coverage became effective (i.e., a pre-existing condition exclusion may apply to claims filed due to a pre-existing condition within the first two years following coverage). If you are beyond that time period and are filing due to a pre-existing condition, it is important to consult with our Chicago disability attorneys because the insurer may still try to conduct a pre-existing condition review and deny your claim.
Q: Am I entitled to benefits for my disability if it is related to a mental health condition?
A: Generally speaking, you are entitled to receive disability benefits, even if your disability is caused primarily by a mental health condition (such as depression, anxiety, panic disorder, PTSD, etc.), though there may be associated limitations. It’s worth noting that some plans are extremely strict and actually exclude all mental health conditions from qualification for benefits altogether, but this is quite uncommon — most plans have a basic provision known as the “mental or nervous condition” limitation. This limitation entitles you to disability benefits for a 24-month period, after which you will no longer be entitled to receive further benefits.
Q: What happens if I lied on my original disability insurance application?
A: The consequences of lying — or otherwise misrepresenting the details reported in your original application for disability insurance coverage — vary depending on the nature of the misrepresentation. In Illinois, you may still be entitled to receive disability benefits, even if you misrepresented certain facts on your original application, so long as those facts were not: 1) intended to deceive the insurer, and 2) material to the disability coverage.
For example, if you simply forgot to write about some minor health condition, the insurer cannot use that as justification for a denial (or rescinded coverage). Further, if the health condition is unrelated to the disability coverage — in other words, if they would have still extended coverage to you had you no misrepresented the facts — then the insurer is required to pay out benefits for a legitimate disability claim. It’s worth noting, however, that the insurer may be entitled to payments to cover any difference that there would have been to the insurance premium.
Q: After I became disabled, I’ve skipped rehabilitation sessions and have not been consistent in attending doctor appointments. Will this affect my claim?
A: All insurance claimants — disability claimants included — have a duty to mitigate their various losses. The duty to mitigate generally entails the exertion of “reasonable effort” towards the minimization of your losses. In laymen’s terms, this means attending your rehabilitation sessions, following through with treatment (by attending appointments), being consistent about taking your medication, and more. The insurer is not required to pay full benefits a disability that was exacerbated by the claimant’s own failure to act reasonably. If you fail to mitigate, then the insurer may have a reasonable basis to either deny your claim or undercut your benefits significantly.
Additionally, most disability insurance policies specifically require that you receive appropriate ongoing medical care; failing to do so, may be a separate reason for an insurer to deny your claim.
Consult Our Experienced Chicago Disability Attorneys for Further Assistance
Bryant Legal Group, P.C. is an insurance litigation firm with a long and consistent record of success in obtaining disability benefits (and potentially, compensatory damages) for disabled claimants. Our attorneys boast decades of experience advocating aggressively on behalf of policyholders throughout Illinois.
We believe strongly that effective litigation demands preparedness. As such, we consult with staff medical experts and others to assess the disability at-issue and help guide our evidence-based arguments.