Can I file for bankruptcy before or after filing for disability benefits?
Loss of income and high medical expenses are two of the most common factors
that force disabled people into bankruptcy. If you have disability benefits
or have a disability claim and are forced into bankruptcy, you need to
properly list your benefits or claim in your bankruptcy schedules. If
you are currently receiving benefits, you need to list the monthly amount
of benefits and the payer (who pays you) in your schedule of assets, besides
listing the monthly payment in Schedule I, your current income. If your
disability benefits have been terminated and you file for bankruptcy (or
your benefits are terminated after you file but before discharge), you
need to list the contingent claim under Schedule B, paragraph 21, by listing
your monthly amount and naming the insurance company and the plan. If
you do not properly list your present (or contingent) claim in your bankruptcy
petition, the insurance company or plan could argue that you are prohibited
from suing for benefits, a position upheld by many judges. At the ERISA
Law Center, we unfortunately encounter many prospective clients who have
been misadvised by bankruptcy advisors or attorney that listing your disability
payment or claim is unnecessary. They are wrong. You must properly list
your benefits or claim to retain it.
How often do disability companies deny claims and appeals?
In our experience, the answers to these questions vary significantly depending
on the circumstances. Most companies will pay most obvious claims –
e.g. pregnancy, hospitalization, cancer treatment, etc. Most companies
will pay the most short duration claims – three months, six months,
perhaps one year. But when disabilities continue for lengthy periods of
time (regardless of the cause) or when the cause of a disability is not
“obvious” – such as fibromyalgia, chronic fatigue syndrome,
autoimmune disease, or when there is no clear diagnosis, or when the primary
disabling conditions are symptoms such as pain, fatigue, mental clouding
from medications, and impaired sleep, then insurance companies are less
likely to grant claims or grant appeals.
If I have multiple disability policies, doesn’t being granted benefits
by one company require that the other company also grant benefits?
No. Insurance companies can certainly be influenced by a claimant’s
receipt of benefits from another insurer. If the policies are similar,
for instance, an insurance company contemplating denial might reason that
a court could be swayed by another company’s decision to grant benefits
to the same claimant. But there is generally nothing in disability policies
(nor the law) which requires one company to follow another company’s
lead in granting benefits.
What is a “sedentary” job?
Many insurers will deny or terminate your benefits claiming you can do
a “sedentary job.” By definition, sedentary work is characterized
by sitting and a lack of physical exertion. According to the Dictionary
of Occupational Titles (DOT), sedentary work involves, “exerting
up to 10 pounds of force occasionally or a negligible amount of force
frequently to lift, carry, push, pull, or otherwise move objects, including
the human body. Sedentary work involves sitting most of the time, but
may involve walking or standing for brief periods of time. Jobs may be
defined as sedentary when walking and standing are required only occasionally
and all other sedentary criteria are met.” The problem is that this
definition only considers the
physical requirements of your job. Many, if not most jobs also include intellectual
and cognitive requirements. And, you have to be able to work full-time:
five days a week, eight hours a day, 52 weeks per year.
Can my disability insurance company require me to have surgery in order
to receive benefits?
An insurance company cannot directly require you to have a particular surgery
or other treatment as a condition to the receipt of benefits. Most policies,
however, contain provisions which require that you be under the care of
a physician and keep regular appointments. If your physician strongly
recommends a surgery which might reduce or eradicate your disability,
and you decline, the insurance company might argue that your election
constitutes a failure to follow your doctor’s advice. This might
affect your claim. Most surgeries do not have guaranteed outcomes, e.g.,
back surgeries. In such cases, the risks may be greater than the hoped-for
benefits. In these instances, it is unlikely that a disability company
could successfully argue that your claim should be impacted by your refusal
to consent to surgery.
Can I perform volunteer work while I’m disabled?
It depends on the nature and extent of the work. Insurers and plans tend
to perceive “work as work,” whether you’re working for
wages or for free. Therefore, if you are engaged, for instance, as a volunteer
on a weekly basis that requires you to appear 2-3 days per week for 3-5
hours, your insurer may terminate your benefits, reasoning that you have
demonstrated that you can work. Additionally, a sustained level of volunteer
work can often be inconsistent with either your doctor’s recommendations
or your stated “restrictions and limitations.”
Can I sue my ERISA disability insurance company for bad faith and punitive damages?
No. Damages for bad faith and punitive damages are not available in an
ERISA claim. Benefits controlled by ERISA are limited in court to receipt
of back benefits, an order for reinstatement, and sometimes attorney’s
fees. Assuming the jurisdiction permits it, those cases which permit bad
faith recovery and punitive damages arise from individual policies or
those excluded from ERISA, such as governmental or church plans.
If my short term benefits are terminated or denied, can I appeal? Or sue?
The general answer is yes. Short term benefits, like long term benefits,
can be administratively appealed and, if the appeal is denied, you can
sue. However, some short term benefits are not governed by ERISA but rather
are wage continuation or contractual promises made by your employer. Those
benefits may be controlled by State Law, not ERISA. Even if this is the
case, the case may still be appealable and you may be able to sue. Therefore,
it’s critical to use the offices of a qualified ERISA lawyer to
identify the character of your short term benefits.
Does it matter what kind of doctors are treating me, and how frequently,
if I am receiving disability benefits?
Most policies require that you receive appropriate care and treatment.
It’s important that you have a physician familiar with treating
your disabling condition and, if the illness requires it, specialized
knowledge of the condition involved. As to frequency, you should see your
doctor as often as he or she requires but generally no less than once
every three months.
Do I continue to receive benefits while my case is on appeal or in litigation?
No. Once your benefits have been denied or terminated, payments are terminated.
How long will my disability insurance benefits last?
That is determined by the policy or plan. Most policies or plans provide
that a claimant will be paid until age 65 or their normal Social Security
retirement age, but benefits can be terminated at any time. That’s
why it’s so important to have access to an ERISA attorney, even
while you’re receiving benefits, in order to advise you about your
rights and the steps you should take to remain on claim.
What are the best ways to protect against denial of benefits?
While the list is lengthy, some of the important ways are: see your doctor
regularly and follow his or her advice; do not actively engage in work,
whether for free or for pay; avoid exposing yourself on social media,
such as Facebook, Google+, or Twitter; cooperate with your carrier or
plan, including responding to their requests, submitting to independent
medical exams, etc.; and take all reasonable steps to improve your health.
How important is it that my treating doctor supports my disability claim?
Your treating doctor is the primary professional whose communications with
the insurer or plan can influence whether or not you receive benefits.
It is therefore critical that your treating doctor not only supports but
is prepared to document your disability claim. But some doctors do not
like to completed disability paperwork. So, if you find that your treating
physician does not timely complete the routine paper work required by
your insurer and needed to support your claim, you should consider finding
Should I see my doctor when the insurer requires the doctor to complete forms?
Yes. Doctors are busy and usually don’t charge for filling out simple
forms. So, not uncommonly, insurance forms are completed by staff or may
be done carelessly. When you need an insurance form completed and signed
by your doctor, make an appointment and go over the form with your doctor,
if you can. That’s the best way to ensure that these forms are properly
Are disability benefits taxable?
The ERISA Law Center does not provide tax advice, which is best left to
a qualified Certified Public Accountant familiar with the taxation of
your benefits. The general rule is that if you employer paid for the benefit
premiums (where the benefits were insured) or provided them without employee
contribution with after-tax dollars, the benefits are taxable. If you
contributed to some or all of the premium payments, then that portion
may not be taxable. Again, this is a general rule and should not be relied
upon as a substitute for good tax advice.
Will I lose my employee benefits, such as health coverage, if my disability
claim is denied?
This depends on your employer’s policies. Sometimes, other employee
benefits like medical, waiver of premium (for life insurance), etc. are
paid as long as the employee is recognized as disabled. Once the disability
claim is denied, those benefits can be terminated. But usually, other
employee benefits last only as long as you continue to work.
My disability insurance company is delaying and delaying granting me benefits.
What can I do?
Under certain circumstances you may be able to proceed to a lawsuit, but
this may not be the best idea. The company may be uncertain as to whether
to grant you benefits. Giving it extra time in which to make its decision
may result in you getting benefits.
Does it do any good to complain to my state’s department of insurance
if my disability company is treating me unfairly?
It can. Some states have very active departments of insurance. Also, if
you have inadvertently missed the time in which to file your appeal (perhaps
you were too sick to complete it), asking for assistance from your department
of insurance might possibly give you the opportunity to “reopen”
the claim. Sometimes, a department of insurance will cause the insurer
to further evaluate your claim and reverse its position. It is important
to remember that departments of insurance only have jurisdiction over
insured plans – not those which are self-insured.