We write a lot here about group long term disability policies and what bogus products they are. So much so, it is financially unsound to trust these policies to take care of you should you become injured, sick or disabled.
A particularly egregious example of just how worthless group policies are is seen in a case that made it to the Supreme Court (please note how the dissents fall in strict Citizen’s United lines) in Metropolitan Life Insurance Company v Glenn where MetLife was both the insurer and administrator of the group plan that insured Ms. Glenn–a huge conflict of interest. It’s like having the fox watch the hen house.
The plan grants MetLife (as administrator) discretionary authority to determine whether an employee’s claim for benefits is valid; it simultaneously provides that MetLife (as insurer) will itself pay valid benefit claims. App. 181a–182a.
MetLife sought Supreme Court review because of an earlier decision that forced MetLife to pay Ms. Glenn her benefits. MetLife spent a lot of money on this because of the precedent it set: An insurance company had to make good on a long-term disability claim and pay benefits to a person who became too disabled to work full time.
Ms. Glenn was a Sears employee who was diagnosed with severe dilated cardiomyopathy. She had dutifully paid her premiums and now she needed to use her benefits since she was too sick to work due to heart failure.
Respondent Wanda Glenn, a Sears employee, was diagnosed with severe dilated cardiomyopathy, a heart condition whose symptoms include fatigue and shortness of breath. She applied for plan disability benefits in June 2000, and MetLife concluded that she met the plan’s standard for an initial 24 months of benefits, namely, that she could not “perform the material duties of [her] own job.” Id., at 159a–160a. MetLife also directed Glenn to a law firm that would assist her in applying for federal Social Security disability benefits (some of which MetLife itself would be entitled to receive as an offset to the more generous plan benefits).
MetLife directed Ms. Glenn to a law firm to make sure she got Social Security so they could off-set her benefits. CIGNA and all the other insurers do the same. See my earlier blog postings at Illness and Insurance Hell. Just follow the money.
MetLife received the bulk of those retroactive benefits due to offsets written into the language of the policies themselves. These group disability policies are, in essence, bogus products; don’t waste your money.
The Social Security Administration consequently granted Glenn permanent disability payments retroactive to April 2000. Glenn herself kept none of the backdated benefits: three-quarters went to MetLife, and the rest (plus some additional money) went to the lawyers.
After the first two years of Ms. Glenn’s policy, MetLife decided to reverse themselves:
To continue receiving Sears plan disability benefits after 24 months, Glenn had to meet a stricter, Social-Security-type standard, namely, that her medical condition rendered her incapable of performing not only her own job but of performing “the material duties of any gainful occupation for which” she was “reasonably qualified.” App. 160a. MetLife denied Glenn this extended benefit because it found that she was “capable of performing full time sedentary work.” Id., at 31a.
On one hand, MetLife forced Ms. Glenn to apply for Social Security benefits, sent her to a law firm to help receive them and took taxpayer dollars to offset the plan she paid premiums for BUT when it came time to continue paying those benefits after the first two years, MetLife “itself had to determine whether she could work, in order to establish eligibility for extended plan benefits, it found her capable of doing sedentary work and denied her the benefits.”
This was what the Social Security agency said as well, but with help from the law firm they sent Ms. Glenn to, MetLife pushed, and received, tax payer dollars in the form of Social Security dollars. They burden the Social Security system.
The Supreme Court found this questionable as well and said so:
In particular, the court found questionable the fact that MetLife had encouraged Glenn to argue to the Social Security Administration that she could do no work, received the bulk of the benefits of her success in doing so (the remainder going to the lawyers it recommended), and then ignored the agency’s finding in concluding that Glenn could in fact do sedentary work. See id., at 666–669. This course of events was not only an important factor in its own right (because it suggested procedural unreasonableness), but also would have justified the court in giving more weight to the conflict (because MetLife’s seemingly inconsistent positions were both financially advantageous). And the court furthermore observed that MetLife had emphasized a certain medical report that favored a denial of benefits, had deemphasized certain other reports that suggested a contrary conclusion, and had failed to provide its independent vocational and medical experts with all of the relevant evidence. See id., at 669–674. All these serious concerns, taken together with some degree of conflicting interests on MetLife’s part, led the court to set aside MetLife’s discretionary decision.
MetLife also did the same thing CIGNA did to us, namely pick out information that bolstered their point of view of the reality of my husband’s disease, Multiple Sclerosis:
The Court of Appeals ultimately set aside MetLife’s denial of benefits in light of a combination of several circumstances…(3) MetLife’s focus upon one treating physician report suggesting that Glenn could work in other jobs at the expense of other, more detailed treating physician reports indicating that she could not; (4) MetLife’s failure to provide all of the treating physician reports to its own hired experts; and (5) MetLife’s failure to take account of evidence indicating that stress aggravated Glenn’s condition. See id., at 674.
If you are wondering why this happens, it’s simply due to corporate greed and money–lots of money. These group policies are huge money makers for the large health insurance companies and they rake in billions in profits each year from them. Paying out claims to people with Multiple Sclerosis is not what they want to do–their interests lie in fattening the bottom line.
As financial tools, they are worthless and a waste of your hard-earned dollars. You have alternatives such as private policies. Save your money and look elsewhere. And if you think these policies need to be better regulated or ERISA should be removed or rewritten as law, write your members of Congress. That’s what we pay them for.
Your health and well-being do not matter to large corporate entities no matter how much they try to spin it otherwise. See AHIP.