Your Money Lost: Group Long Term Disability Insurance Policies

Did you know your tax dollars are used to subsidize private health insurance companies?

If you are unfamiliar with Social Security Disability Insurance, here is an excellent primer put out by AARP. SSDI provides protection specifically to qualified U.S. citizens who become disabled and lose their ability to earn an income. We all pay for this through our Social Security taxes. It’s one of the many benefits of being a United States citizen.

When my husband was employed at Fidelity Investments he had a group disability insurance policy with CIGNA. He even purchased extra coverage–to protect our family with 80% of Paul’s income just in case something happened.

But that money was ill-spent as CIGNA did everything in their power to deny coverage to a man with Progressive-Relapsing Multiple Sclerosis. This is not unusual behavior for any private insurance company. In fact, it’s exactly what they do.

But first, you must apply for Social Security Disability Insurance.

When Paul was mid-way through with short term disability and it appeared he was getting progressively worse and not better, CIGNA telephoned us to inform us that they were getting his file ready for long term disability. Great, we thought, they are helping us! Isn’t that what they collect a premium each month for? The answer to that is, no. They collect a premium each month to make money. Keeping that money and not paying it out in claims helps their bottom line.

From the Group Life Market Survey 2009 outlining the sales in disability insurance, you can see group sales disability totaled $1.3 billion at mid-year, with 27 private insurance companies covering 95% of the total market.

After CIGNA denied Paul’s benefits, they telephoned us again. “You must apply for Social Security benefits and send us proof of your application or your long term application with us will be invalid.”

Why does a private insurance corporation demand that you apply for government benefits?

Money, that’s why. If you qualify and receive Social Security Disability Insurance then your insurance company will off-set the amount of money they contractually owe you by the amount of money you will receive from the government. For example, if Paul’s CIGNA policy was to have paid him $5,000 a month and SSDI would give him $2,000 a month, then CIGNA would subtract that amount and only give Paul $3,000 a month. Your tax dollars are used to subsidize private corporations.

Your money is used to fatten the bottom lines of Aetna, AIG Benefit Solutions (that’s how much now in government money for AIG?) CIGNA, Guardian Life, Hartford Life, Mutual of Omaha, Northwest Mutual, Prudential, Sun Life, UnitedHealthcare, Unum and Wellpoint, to name but a few.

Why pay a premium at all?

An entire industry has been set-up surrounding group disability plans to help private insurers NOT pay the claim.

For example, every year the American Conference Institute (one among many) has a yearly event titled, “Litigating Disability Insurance Claims.” Please click the link and read the brochure–it is so very eye-opening. From the brochure, here is what the insurance companies, their general counsels, federal judges (they are the very same federal judges who will decide your disability case!) and doctors will discuss at the above-mentioned conference, emphasis in blue is mine:

    • Whether the medical record is reliable: Whether the treating physician is biased and favors the patient
    • Providing the credentials of the IME’s (Independent Medical Examiner–hired by insurance company): Identifying what is relevant; Highlighting the appropriate credentials; Ways to appropriately critique the credentials of the IME: what to look for and ways to address the inadequacies; Whether specialized medical knowledge is a necessary component of the IME’s credentials (in the case of Multiple Sclerosis, patients are seen and treated by neurologists, the IME who looked at Paul’s written medical records was not a neurologist and first letter of denial was written by an RN and not a doctor)
    • Rotating vendors to avoid the appearance of bias and to ensure an independent review of the claim
    • The denial factor: How many claims were reviewed and denied?; Whether repetitive denial leads to an appearance of bias; Ways to utilize claim denial information
    • Whether the claimant is constrained by financial pressures and returns to work disabled

The last one is of particular interest to me because that is exactly what happened to this family. This family, faced with zero income as Paul had been the sole bread winner for most of our married lives, had to return to work at Fidelity Investments, disabled. This is something the insurance company counts on to help bolster their claim that you are not disabled.

Medical evidence that you are disabled will not prevail.

This conference, and others like it, focus on how to prevent paying a claim, and it does not matter if the claim is legitimate, what matters is the corporate bottom line. The American Conference Institute also has another conference dedicated to defending ERISA claims attended by more federal judges–the very same ones who will hear your ERISA disability case.

Your premium dollars, the ones you work so very hard to pay each month to your private insurance carrier, are not spent on paying a claim should you wake up one day with cancer, MS or become injured in an accident. No. Those hard earned dollars are spent on figuring out how not to pay you. And then, they use your tax dollars to reduce the amount they owe you.

United States taxpayers, it’s time to say enough. Group long-term disability policies are bogus products. They should either be highly regulated or not allowed to be sold at all, as the poorly written policies and the attendant machines put in place by the insurance companies to deny all claims, make the products fraudulent and worthless.

Links:

CIGNA written brochure for brokers about their long term disability product.

Dell and Schaefer, a law firm, discussing CIGNA including the LINA settlement in California.

The 11 Federal Judges Attending the 2011 Defending and Managing ERISA Litigation Conference.

The American Conference Institute assembles a yearly “defending against ERISA claims” conference usually held in New York City. This year’s conference is at the New York Marriott Downtown.

If you have Multiple Sclerosis or any other disease that forced you to fight for your benefits because companies like CIGNA lied (not hyperbole) to prevent your claim, then you know all about ERISA or the Employment and Retirement Income Security Act of 1974. Unfortunately, ERISA has had negative consequences. A full explanation, written by an ERISA expert, can be found here.

But you may not know that the very same federal judges who may hear your case attend these conferences where they help coach insurance companies, plan providers and other attorneys on how to defend against ERISA claims. In other words, how to make sure a company like CIGNA doesn’t have to fulfill their contractual obligations and pay your claim. From the conference brochure:

An ERISA Moot Court: Featuring top defense attorneys arguing some of the hottest and most common issues facing ERISA practitioners today, panels of renowned ERISA jurists will critique arguments, question our litigators and help all attendees understand how to successfully convey their positions to the court.

The federal judges, the ones deciding your cases, are going to going to participate in a moot court to help defend against ERISA claims? How does that square with remaining impartial as part of the judges’s code of conduct? And our favorite here at the MS Activism Foundation:

Breaking Up Is Hard to Do: A Focus on Severance Plan Litigation including Triggering Events, COBRA Hang-Ups, and the Other Litigation Issues that Arise in Separation Situations.

CIGNA had a big loss this year in CIGNA v. Amara, even though they are spinning it otherwise, so of course, CIGNA’s senior counsel, Christina McNally will be in attendance at the conference.

Fidelity Investments, my husband’s former employer, is listed on the last page as being in attendance as well. I could not find a name though. Last year it was their very own senior counsel, (and Paul’s fellow Boston College alum) Laura Tholen.

Here are the names and districts of all the federal judges who are attending this year’s conference. And here is a link to the PDF of the 2011 conference. If you are fighting for your claim, and see your judge, send them a letter. Tell them that you know what they’re doing and that it certainly does not appear impartial.

Here are the Codes of Conduct for United States Judges and be sure to ask about CANON 3: A JUDGE SHOULD PERFORM THE DUTIES OF THE OFFICE FAIRLY, IMPARTIALLY AND DILIGENTLY.

Hon. Daniel E. Knowles, III U.S. Dist. Ct., E.D. La.

Hon. Morton Denlow U.S. Dist. Ct., N.D. Ill.

Hon. Matthew Kennelly U.S. Dist. Ct., N.D. Ill.

Hon. William S. Duffey, Jr. U.S. Dist. Ct., N.D. Ga.

Hon. Viktor Pohorelsky U.S. Dist. Ct., E.D.N.Y.

Fernando J. Gaitan, Jr. U.S. Dist. Ct., W.D. Mo.

Hon. Timothy C. Batten, Sr.U.S. Dist. Ct., N.D. Ga.

Hon. Robert Jonker U.S. Dist. Ct., W.D. Mo. (I think the American Conference Institute meant MI not MO.)

Hon. Richard G. Stearns U.S. Dist. Ct., D. Mass.

Hon. John Coughenour U.S. Dist. Ct., W.D. Wash.

Hon. Robert B. Collings U.S. Dist. Ct., D. Mass.