They Paid My Short-Term Disability Benefits – Why Was My Long-Term Disability Claim Denied?

By Scott E. Davis, Disability Attorney

One issue that has developed over the last several years in disability insurance cases is the scenario where your insurance company approves your short term disability claim for a period of time (perhaps the maximum time frame, usually no more than 180 months) but then, turns around and denies your long term disability claim.

Rightly so, individuals do not understand how the same insurance company, reviewing essentially the same evidence, and using what is frequently the same definition of disability, can make such a contradictory finding?

After representing hundreds of ERISA disability clients for the past 16 years, my experience is that individuals are not skeptical enough about how little their disability insurance company wants to pay their claim. Many people naively believe that getting their claim approved is simply a matter of completing the insurance company’s forms, particularly if their doctor says they are unable to work.

All too often, the answer to why your disability claim was denied is simple – it is about the money.

All too often, the answer to why your disability claim was denied is simple – it is about the money.  It is not about justice or what is right, it is not about what you think should happen, it often is not even about what your doctor says – follow the money.  Once you take a step back and do the math, you will understand why your claim was denied.

The insurance company was generous and easy to work with during your short term disability claim because it had a finite period of time to pay you, usually no more than 180 days – the insurance company can handle that promise and potential liability.

However, a long term disability claim is a different ball game financially.  Many employer provided policies provide a maximum benefit period to the age of 65, or even to your normal Social Security retirement age.  As a result, on the 181st day of your disability, the insurance company can be staring down the barrel of decades of liability and often hundreds of thousands, if not millions of dollars, if you never return to work.

The disability company who was easy to work with during your short term claim is now acting different and much more skeptical in your long term claim.   You can bet that your long term disability claim will often be reviewed by the insurance company’s nurses and doctors who I often call “Dr. Everything is gonna be alright,” “Dr. Feelgood” and “Dr. No.” These folks tend to discount everything you and your doctors say about your inability to work and not surprisingly, their allegiance is to who is paying them.

Many people do not understand there is typically a set period of time that you have to be disabled before you become eligible for long term disability benefits, which is always the maximum timeframe on the short term claim.

Another issue often encountered by individuals is their short term disability claim will be approved but then terminated before they have reached the maximum timeframe for benefits. Many people do not understand there is typically a set period of time that you have to be disabled before you become eligible for long term disability benefits, which is always the maximum timeframe on the short term claim.

Thus, if the long term policy requires you to be disabled for 180 days, and the insurance company finds you were disabled for only 90 days and not 180, guess what – the insurance company will say you are not able to file a long term disability claim because you did not meet the “elimination period.”  In plain English, this means you were not disabled for the entire duration of the short term timeframe which is often a prerequisite for filing a long term disability claim.  Given this occurs often, are you still not skeptical of your insurance company?

The reason your short term disability claim was denied before you exhausted those benefits is because it  – #1 often eliminates your eligibility for long term disability benefits and if they don’t tell you this, at a minimum it makes it easier for them to #2 – deny your long term disability claim if they have already terminated your short term disability benefits because they do not have to explain why in the 181st day, it suddenly found you not disabled when it did find you were continuously disabled for the prior 180 days. 

In my experience, I believe another reason why insurance companies deny short term disability claims is because they believe that if they do, you just might return to work.  I call this strategy, “starving you out.”

In my experience, I believe another reason why insurance companies deny short term disability claims is because they believe that if they do, you just might return to work.  I call this strategy, “starving you out.”

Most Americans are only a lost paycheck or two away from a financial crisis and insurance companies know this.  As a result, individuals whose short term disability claims are delayed, denied or terminated simply do not have the financial wherewithal or the emotional strength required to take on their multi-billion dollar insurance company.  In addition, a complicating factor is that when your short term disability claim is denied, your employer often requires you to return to work, or risk losing your job.  You may suddenly find yourself under pressure from your employer, who may be using the insurance company’s denial of your claim to tell you that since you are “not disabled” you need to return to work right away or you lose your job.

In summary, the best advice I can give you is to be aware of the problems related to transitioning from short to long term disability and to call us immediately if your short or long term disability claim has been denied for a free consultation so you can learn your rights and determine a strategy that is best for you.  To learn what we can do for you, please contact us at our toll free number 1 (800) 588-1710.

© 2015  Scott E. Davis, Disability Attorney