Has the insurance company denied your short or long-term disability insurance benefits? Are you still getting payments, but worried they could be cut off soon? Are you in a panic mode, wondering what your next move should be?
If you answered yes to any of these questions, then this Step-by-Step Guide is for you. We reviewed the key things you need to know and give you step-by-step instructions on how to do your own internal appeal. I've also included two videos. One of which discusses what to do once you get the denial letter in the mail. In the other video, I reviewed the process we use when representing a client for an internal appeal.
Winning a disability appeal is very much like solving a puzzle. You have to identify the missing pieces, go find them, and then figure out how they fit together. Finding the right pieces of missing information and fitting them together with the right strategy is your key to success.
Finding out the insurance company is denying your disability insurance claim is like getting punched in the stomach. It caught you off-guard because because you know you are legitimately disabled, your doctor was supportive, and assumed the insurance company would approve your claim. Once the reality of the denial sinks in, panic mode begins; however, blindly charging ahead with your appeal is not a recipe for success. Take time to educate yourself so you can make the best possible decisions.
Key THings to Know Before Appealing Your Disability Insurance Claim
Before you charge ahead with your appeal, it is important that you understand some key issues and how the process works.
1. What is an Appeal?
An appeal means you are asking the insurance company to reconsider its decision to deny your claim. By asking for this review you are "appealing" the denial decision. There are three phases to an appeal: First, you give "written notice" that you want to appeal. Second, you give new information or documents to support your appeal. Third, the insurance company reviews the denial in light of the new information and gives an appeal decision. You should think of these as three distinct phases.
2. Internal Appeal or External Appeal
It is important to appreciate there are two types of appeals: Internal appeals and external appeals. Lets look at both of them.
An internal appeal means you are appealing internally with with the insurance company. Internal appeals are handled by the insurance company's employees. You normally have 2-3 rounds of internal appeals. Normally, there are no formal guidelines for internal appeals. The insurance company will give you deadline for each internal appeal. The insurance company may tell you to include specific information with your appeal, but there are usually no guidelines beyond that. Eventually, you will reach the end of internal appeals, and will need to move to an external appeal, if you want to continue to dispute the denial.
An external appeal is done outside the insurance company, by someone not employed by the insurance company. With external appeals, a neutral or independent person reviews the claim decision and issues a new appeal decision. External appeals are more formal than internal appeals. External appeals have procedural guidelines and deadlines that must be followed. External appeals must follow the principles of natural justice, which means you have the right to a fair hearing before an independent decision-maker. External appeals are the last decision on your claim and happen after you have exhausted all internal appeals.
There are two types of external appeals: tribunals and courts.
Tribunals, Appeal Boards and Panels
Tribunals are the less formal type of external appeal. You have a hearing before a decision, but it is done outside of the court system. Tribunals are also called appeal boards or panels. You have the right to meet with the decision-maker to present your case. This meeting is called an appeal hearing. The decision-maker for a tribunal is called an adjudicator or administrative law judge. Tribunal hearings are less formal, but your claim is limited to past benefits owed and reinstatement of payments.
Courts are the more formal type of external appeals. Insurance appeals are handled by the Superior Court of each province. Like tribunals, courts are based on the principles of natural justice. The court process is more procedurally complex than the tribunal process. The court process ends with a judge or jury deciding if your claim should be approved. However, when appealing using the court process, your appeal is not limited to past benefits and reinstatement of payments. You can claim other damages, including compensation for mental distress and other financial losses caused by the wrongful denial of payments. Other unique features of the court process are: 1) you may have the option to settle your claim for a one-time payment for past and future payments and 2) if you are successful in winning or settling your claim, the insurance company must reimburse you for legal fees paid to your lawyer.
3. What Type of Disability Benefits Plan Do you Have?
Your appeal options are dictated by the type of disability benefits plan that you have. Contrary to what most people think, there is more than one type of disability benefits plan. There are three types of disability plans: 1) Disability insurance plans; 2) Employer-sponsored disability plan; 3) Collective agreement disability plan. Each type of disability plan will have different appeals procedures.
disability Insurance plan
Disability insurance plans are a type of disability benefit paid through an insurance policy. The insurance company sells the insurance policy to an individual or a group. The individual or group members pay insurance premiums to the insurance company. In return, the insurance company agrees to pay disability benefits to a covered period should they become disabled as defined by the insurance policy. Insurance companies sell insurance policies that have short-term disability benefits or long-term disability benefits or both. If your disability benefits plan is an insurance policy, then you would have 2-3 levels of internal appeals after a claim denial. There are usually no documented appeal procedures or rules. Your external appeal would be through the court system.
Following are some signs you may be covered under a disability insurance policy:
- you are a professional, executive or self-employed and bought the insurance policy from an insurance broker
- you work for a small to mid-size business and the disability benefits are part of your employer's group benefits plan
Employer-Sponsored Disability Plan
Employer-sponsored disability plans are a type of disability benefit paid through a fund set up by your employer. The disability benefits are paid from an employer-owned fund, rather than an insurance policy or company. The employer hires an insurance company to manage and pay disability claims out of the fund; however, the insurance company provides administrative services only. This arrangement is confusing for employees because the plan appears to be a group insurance policy. The insurance company makes claim decisions and pays benefits, but is doing so on behalf of the employer. Employer-sponsored disability plans usually offer 2-3 levels of internal appeals handled by the insurance company. The external appeal can include both an appeal hearing or court proceedings. There are usually written appeal procedures and rules for the internal and external appeals.
Employer-sponsored disability plans are often limited to short-term disability benefits, but can also include long-term disability benefits. A common scenario is that your employer pays for short-term disability benefits, but has a disability insurance policy for long-term disability benefits. In those situations, the insurance company manages both the short-term disability plan and the long-term disability plan. For the short-term disability plan, the insurer provides administrative services only. For the long-term disability plan, it pays benefits through and insurance policy it sold to the employer.
Following are some signs you may be covered by an employer-sponsored disability plan:
- you work for a large national or international company that has over five-thousand employees;
- you work for a large financial institution, such as a bank or insurance company
Non-Profit Disability Plan
A non-profit disability plan is like an employer-sponsored plan, except the disability benefits are paid from a non-profit fund, rather than a fund owned by the employer. Non-profit disability plans are usually found in unionized workplaces. The plan is funded jointly by the employer and the union members. The plan is managed by a board of directors made up of members of the employer and the union or unions. The board of directors usually hires and insurance company to administer the disability plan. The insurance company makes claim decisions and pays disability benefits from the fund. Non-profit disability plans usually provide both short and long-term disability benefits. There is normally a formal internal appeals process that has strict procedures and deadlines. There will always be an external appeal to a tribunal or appeal board. In some plans, the appeal tribunal is the final decision-maker and there is no right to bring a lawsuit for payment of benefits. However, in other plans you have the option to choose an appeal tribunal or to appeal your claim in the courts.
Following are signs you may be covered by a non-profit disability plan:
- you work for a municipal or provincial government
- you work for the federal government;
- you work in the public sector at a government agency.
Warning: Given the strict rules and deadlines common to most non-profit disability plans, you should seek legal advice from a disability lawyer early in the process. A disability lawyer will be able to explain the rules and options under your disability plan.
4.timing of Disability Denial
The timing of your disability denial is an important consideration when preparing your appeal. Is this a short-term disability denial? Is this a long-term disability denial at the initial claim stage? Is this a long-term disability denial after benefits were paid for several months or years. As a general rule, the earlier in the process your claim was denied, the better chance you have to win your appeal. If your claim was denied at the initial application stage, then there is a good chance the claim could be approved on appeal if you get the right information to the insurance company. On the other hand, if your claim was denied after benefits were paid for several months or years, then the chances of winning an internal appeal are much lower. When your disability claim is denied after benefits have been paid for several months or years, then you will have to win your claim at the external appeal, or not at all.
Step-by-Step Guide to Appealing Your Disability Insurance Claim Denial
Now that we've covered the basics, it's now time to go through the appeal process step-by-step. When you are working through the steps, keep in mind the issues from above and ask yourself the following questions:
- Is this an internal appeal or external appeal?
- What type of disability plan is this? Disability insurance policy? Employer-sponsored disability plan? Non-profit disability plan?
- What is the timing of my denial? Was my short-term disability application denied? Did I receive short-term disability, but then my long-term disability application was denied? Did I receive payments for several months before this denial?
1. Identify your deadline for Appeal
Some appeal deadlines are soft (no big deal), while other appeal deadlines are hard (miss them and you are screwed). You need to figure out the deadline for your appeal. The deadline is usually written on the denial letter you received. If it isn't there, you have to call your claim representative to ask them to confirm it for you in writing.
Remember, if you believe you are covered under a non-profit disability plan, then you need to use extreme caution as the deadlines and rules are much less forgiving.
2. ENFORCE YOUR ONGOING SICK LEAVE STATUS WITH YOUR EMPLOYER
Some employers will try to take advantage of the fact your disability claim has been denied. Even though you are appealing the denial, they will demand that you return to work, or threaten they will view you as being on an unapproved leave.
You can stop your employer's bad behaviours immediately by having your doctor write a letter to your employer confirming that you are still disabled from work. Once you doctor has confirmed you continue to be disabled, your employer must continue to recognize you are on disability or sick leave, regardless of insurance company's decision to deny your claim.
3. Gather critical documents and information about the appeal denial
You need to understand why your claim was denied. You do this by gathering as much information as possible about the claim denial. You want to get as many of the following documents as possible:
- denial letter from your claim representative, with written reasons for denial
- copy of the insurance policy, rules or regulations that govern the appeal process
- copy of the insurance company's "claim file" for your claim
4. Identify other disability benefits you could apply for
Once your disability benefits are denied, it could be months before you win the appeal. It is important that you have a "Plan B" for other possible sources of income. Employment Insurance Sickness Benefits are a common benefit that is available to people who have had a denial of disability insurance benefits or workers compensation benefits.
5. Take stock of your financial resources
No one wants to do this, but you must plan for the worst. Take stock of your expenses, savings other income sources to figure out how long you can last while this appeal is ongoing. Don't assume that the appeal will be overturned quickly. You may have to make hard choices like using up savings or RRSPs. In the worst case scenario, you may to get loans from family members or even consider selling your house. Appealing a disability denial can take several months so you need to have a plan for how to survive.
6. Analyze the Denial Letter and claim documents to identify the gaps you need to fill
The best way to appeal a disability denial is to identify the gaps in the information and to then go about filling those gaps. Unfortunately, this is easier said than done.
Common gaps that need to be filled are as follows:
- clarifying a medical diagnosis
- clarifying functional limitations
- clarifying how your symptoms and limitations prevent you from doing the job
- clarifying information about job requirements or physical demands
- providing copies of records or reports from other treatment providers
- obtaining new medical evidence
- obtaining information from co-workers or family members
- clarifying your work history
7. Decide on a Game Plan for your appeal
There is no one-size-fits-all way to appeal a disability denial. Depending on your situation, and the type of disability claim you are appealing, you will want to prepare a custom game plan for your appeal. The Game Plan involves both the strategy and the tactics you plan to use with your appeal. You must customize both if you want to maximize your chances of winning.
The key parts of an Appeal Game Plan are as follows:
- what is the theme or story of your claim
- should I skip the internal appeal and move on the external appeals (i.e., appeal hearing or lawsuit)
- what are the best ways to fill the gaps need to prove the claim
You May be Eligible for a Free Disability Appeal Game Plan Report
Contact us for a free consultation to learn more about how we can prepare a customized Disability Appeal Game Plan for you. Find out if you are eligible to get a free Disability Appeal Game Plan. A Game Plan is a 10-15 page report prepared by our disability lawyers, which identifies the key issues in your appeal, and sets out a roadmap so you can maximize your chances of success. Learn more about our free offer for the Disability Appeal Game Plan.
8. Execute the Appeal Game Plan
In this stage, you go about gathering the information and medical documents. You prepare written submissions for your appeal. Written submissions should explain how you have filled the gaps in information and show why the previous reasons for denial no longer apply.
9. Wait for the a decision on the appeal
Once you have submitted your appeal, you will normally get a response in 30 days or less from most disability plans and programs. Normally, you will get an appeal decision much faster than the original claim decision. Sometimes the appeal is handled by the same claims representative and sometimes it is sent to another claim representative in the organization.
You will get a decision that the appeal is denied, which means you need to appeal to the next level. Or they will say that the appeal was allowed, which means you won!
Advanced Tactics: How We Prepare Appeals for Our Clients
We've given you the overview. In this video, I reviewed the process we use when representing a client for an internal appeal of a long-term disability insurance claim denial.