Why Was My Short Term Disability Claim Denied?

Short term disability (STD) insurance is designed to replace a portion of your income temporarily if you become disabled and are unable to earn an income. A disability can result from an injury, a serious illness or a mental health issue.

STD comprises of paid sick leave days, STD benefits from private insurance companies, Employment Insurance Sick Benefits, ICBC Part 7 Disability and WorkSafe BC benefits.

STD benefits from employers are indemnity plans administered through an insurance or health management company, while coverage from the other insurance programs are government regulated.

Short-term Disability Insurance Plans in BC

STD benefits begin payment after a specified number of days of the qualifying period, from the last day worked or after exhausting paid sick days. These short qualifying periods help reduce administration for claims of really short duration. Under an STD plan, disability is linked to the employee’s inability to perform any or all aspects of their occupation. Here are the general definitions for each of these short term disability insurance plans in BC:

1) Paid Sick Leave Days From Employer

You are required to use your accrued sick days first, up to a maximum set under the employment and insurance policy for sick leave if your employer provides this benefit. Paid sick days provide income protection when employees are ill, injured or caring for an ill family member. This may include a child, spouse, parent, parent-in law and same-sex domestic partner, depending on the policy.

2) Short Term Disability Benefits With Private Insurers

STD benefit payments begin after the last calendar day of sick leave coverage and continue for the duration of the disability to a maximum of the short term disability policy days. This STD provides salary protection for the employee or self-employed insured who is unable to work for a period of time due to a non-work related illness or disability. The private insurer will require certification of illness and disability from your physician or an independent medical examination (IME) with their own physician to verify the continued absence is legitimate.

Most short term disability policies from private insurers are up to two years in coverage. If the disability continues beyond this period, you could be qualified to apply for long term disability from either a private plan or Canada Pension Plan Long-term Disability.

3) Employment Insurance (EI) Sick Benefits

If you do not have a short term disability policy with a private insurer, you may apply at Employment Insurance (EI), a federal government program for temporary financial assistance to unemployed workers who are unable to work because of sickness, injury, or quarantine for medical reasons. If you qualify with the minimum insurable hours, and after the one-week waiting period as of 2016, you could be eligible to receive up to a maximum of 15 weeks of EI sickness benefits. You will need to obtain a medical certificate signed by your doctor or approved medical practitioner. Visit EI Sick Benefits for details.

4) Working, Injured and Disabled from a Motor Vehicle Accident?

ICBC Part 7 Benefits for short term disability are up to two years and is considered secondary coverage. Therefore, you must apply for primary disability coverage from any disability plans available to you through your employment or through a spouse’s employment. If there are no other disability plans, you will need to apply for Employment Insurance Sick Benefits or WorkSafeBC if applicable, before any shortfall coverage is available from ICBC Part 7 Benefits for short-term disability. Learn More About ICBC Claims and Primary vs. Secondary Coverage. 

5) WorkSafe BC Disability Benefits from Work Injuries or Disease

If you have a work-related injury or disease, you will need to seek medical attention and report your injury to your employer. If you miss work or seek medical attention, you must report to The Workers’ Compensation Board of British Columbia aka WorkSafeBC, governed under the Workers Compensation Act. If you’re injured on the job and unable to work, call WorkSafeBC Teleclaim at 1.888.967.5377 to make a claim. (www.WorkSafeBC.com)

Please note that our firm does not represent people seeking to challenge WorkSafeBC disability claim denials.

 

Why Are Short term Disability Claims Denied?

Insurance companies often deny short term disability claims. There are six main reasons for these types of disability claim denials:

  1. Lack of Proof of Short Term Disability
  2. Changes in Medical or Functional Status
  3. Short Term Disability Denied After Time Limit
  4. Change of Definition for Own Occupation
  5. Exclusion for Pre-existing Conditions
  6. Failure to get Regular and Appropriate Physician Care

For the complete details on why disability claims are denied, visit six most common reasons for insurance companies to deny disability benefits.

Other Factors Influencing Short Term Disability Denials

Short term disability denials can also be related to application errors or insufficient evidence, while other denials occur because the situation does not meet the criteria for an STD claim. About two-thirds of all initial claims for disability benefits are denied, even seemingly credible ones. Here are some influencing factors for STD claim denials:

1) Private Investigation With Video Surveillance Reveals you Have Exaggerated your Injury or Illness

Video surveillance may be involved as long as it does not violate your personal privacy. Recordings are allowed as long as one party is aware of the recording. An invasion of your right to privacy may occur if an investigator is snooping around your home, knocking on your door under false pretences, i.e., pretending to be someone they are not, following you too closely in public places, or acting in an unreasonable or intrusive manner.

2) Your Social Media Posts

People usually post pictures of themselves in social situations smiling on social media. That’s because if you point a camera at someone, they are conditioned to smile – even if they are in pain. Also someone suffering emotional trauma may not want their friends and family to know how much they are suffering – so they choose to post only content that makes them appear well.

If social media posts are produced as evidence, the weight of those images for or against the claimant case is at the judge’s discretion. Both personal injury and short term disability cases are increasingly submitting evidence from social media, with the hope these posts will negate your claims. The takeaway is to be prudent about what you post on social media if you have been injured.

3) Report from Independent Medical Examiner that Contradicts your Injury or Illness

The insurance company will require you to attend an independent medical examination (IME) with their doctor. The doctor will evaluate your ability to function and respond physically and/or mentally to various tasks. They may make recommendations or restrictions on your ability to perform daily activities at home, work and recreation. The IME report is often used to confirm or deny short term disability benefits, other coverage and settlements.

4) Need Help With Your Short Term Disability Claim Denial?

You should not delay in getting legal advice to clarify definitions and deadlines for short term disability plans. Speak with one of our experienced lawyers if your STD claim is denied. You may be concerned about not having money to hire a lawyer, but we could represent you on a contingency for an agreed percentage.

Online Event

Questions about Private Insurance Disability Claim Denials?

Martin Willemse will be participating in PainBC’s live online “Ask the Expert” event on April 20, 2017  from 9:30a.m. to 11:30a.m.

Martin will be answering questions related to disability claim denials by private insurance companies including:

  • Long Term Disability (LTD)
  • Short Term Disability (STD)
  • Critical Illness
  • Chronic and Complex Pain

Martin will take questions in real time and his responses will be recorded online.  You can find out more about the online event and how you can participate HERE.

Can’t make the event? You are welcome to contact us anytime for a free consultation.

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Disability Insurance Claim Denials: The Insurer is not Always Right

When you are disabled due to an injury or an illness, the last thing you should have to deal with is a battle with an insurance company over the interpretation of complex contractual terms to get your benefits. A recent news story regarding a family man comes to mind. Mr. Glennie was a fit man in his mid-30s who suffered a cardiac arrest. He was placed on life support for four days and spent nearly a month in hospital. Following his release from hospital, he was disabled from his occupation as a mechanic because of ongoing issues with his left arm that arose following a surgical implant of a defibrillator. When he applied for critical illness coverage through his employment’s group coverage carrier, he was denied. The plan purported to treat “heart attacks” differently than “cardiac arrests.”

The insurance company took the position that, while the insured’s heart stopped, it was not caused by a “heart attack”. The insurer defined “heart attack” as the heart stopping due to a blockage. Since the insured’s heart stopped for an inexplicable reason and not due to a blockage, he was deemed not covered. However, the medical community would describe what occurred here as a heart attack.

Don’t Automatically Assume the Insurer’s Interpretation is Correct

We have seen similar situations to that experienced by Mr. Glennie. An insurer will often deny a claim based on its interpretation of the terms of the policy. Many people simply accept the insurer’s interpretation because, after all, they are the ones administering the policy, and they are assumed to know best. However, it is imperative to review the master policy that sets out the terms of the contract. If there is another, equally compelling interpretation that would cause benefits to be paid, that is the interpretation that should prevail.  Further, if there are two equally compelling interpretations, the legal concept of contra proferentem has been used as a tie breaker.

What is Contra Proferentum?

Contra proferentem means that where a term is ambiguous, the preferred meaning should be the one that works against the interests of the party who provided the wording. In the insurance context, it’s the insurer who is responsible for drafting standard form insurance contracts. Courts acknowledge that people entering insurance contracts (including disability insurance contracts) have no negotiating power over the terms of these contracts. They accept the terms or they don’t get coverage. Courts also assume that the drafters of these documents are well aware of any limitations or ambiguities and should not be allowed to take unfair advantage of this knowledge. Similarly, if an insurer did not choose its words carefully to avoid misunderstandings, it should not be allowed to benefit from that lack of care.

So, if the normal rules of contract interpretation do not clarify which interpretation was intended by the parties, the courts may apply contra proferentem to break the tie. Some exceptions may apply if the dispute involves an argument over coverage between two insurance companies.

We have resolved many cases favourably for our clients where we have applied this legal concept.

In Mr. Glennie’s case, this legal concept was not tested as the day following the news coverage of his case, the insurance company decided to “make an exception” and pay the claim.

What to do if Your Disability Claim is Denied

When your insurance claim is denied, seek legal advice from a lawyer that has specific expertise in insurance matters. It may make the difference between getting paid or, getting nothing. If you have a question about a disability claim denial call us at 604-583-2200 for a free, no obligation consultation.

News of Upcoming Events

September 30, 2015: Long Term Disability Insurance Seminar – Resident Doctors of BC

Kirk Wirsig and Martin Willemse, as counsel for the Resident Doctors of BC on insurance matters will be presenting a seminar to members of the Resident Doctors of BC on long term disability insurance coverage. Discussion topics will include what policy riders are available when purchasing an individual long term disability insurance policy, for example:

  • Own Occupation rider – a rider that insures against a disability from your own occupation for the lifetime of the policy, as opposed to the usual coverage which provides long term disability coverage for a numbers of years, often two, of your own occupation and then switches to coverage for long term disability from any other occupation after the first two years of own occupation coverage;
  • Future Income Option rider – a rider that allows the insured under a long term disability policy to increase the monthly benefit amount annually for a set number of years to a set maximum monthly benefit amount, without having to provide further proof of good health; and
  • Cost of Living Adjusted Benefit rider – a rider that provides for periodical increases in the monthly long term disability benefit amount based on rate changes in the Consumer Price Index and other factors.

October 28, 2015: Long Term Disability Seminar – BC Psychological Association

Martin Willemse and Kirk Wirsig have been invited to present a seminar on Long Term Disability claims at an Ethics Salon hosted by the BC Psychological Association. The seminar will focus on long term disability claims based on subjective conditions, such as mental health illnesses including major depression and anxiety disorders. The opinion of treatment providers, in this instance a psychologist treating a long term disability claimant suffering from a mental health illness, is often crucial to the claim. However, a treatment provider should be wary not to be seen as an advocate, as this will influence the weight a trier of fact may give to his or her opinion.

Martin Willemse has presented papers and power point presentations on these conditions at other conferences which can be viewed here:

 

Is my Insurance Company Delaying Approval of my Claim?

We often get this question from people who are off work due to an injury or illness and the insurance company is taking a long time to decide whether the application for benefits ought to be accepted.

To start, make sure that you complete the form within the time required under the policy; that the form is completed properly; and, if the insurer asks for additional information, obtain that information as soon as possible.

While most insurers do not deliberately delay the process, we have heard from frustrated callers complaining that the insurance company’s agents ask for information that has already been provided, do not return phone calls, and request answers to questions that have nothing to do with the claim.

The initial decision should only take a few weeks but we have seen this initial period drag on for many, many months. In circumstances where the insurance company denies the claim, the process takes even longer as claimants attempt to appeal the decision, sometimes through multiple rounds of appeal. During this timeframe, the disabled employee is without income, getting behind financially and under added stress in dealing with the insurance company. Even more concerning, your time to take legal action continues to tick away during this entire time. This means that if your latest appeal is denied after the limitation period to sue has run out, you will likely be barred from taking legal action against the insurance company.

If your claim has been denied and the insurance company invites you to appeal, it is time to call a disability lawyer.  When a disability claim is denied, we can help you decide whether it makes sense to pursue the appeal or look at your legal options.

Mediation Chairs

Mediation of Insurance Denial Claims

Mediation is a voluntary process, to which both parties agree. A mediator is appointed to hear the claim. The mediator is a neutral person assigned to help the two sides reach a solution that works for both. Usually a mediation takes place in a boardroom at a neutral location. The setting is usually casual in order to relax both sides to allow for easier communication.

A mediation is conducted on a “without prejudice’ basis. This means that whatever is said at the mediation cannot be used against you if the matter were to proceed to trial. This rule encourages both parties to speak more freely.

The mediator will manage both parties to ensure that each has an opportunity to speak and listen to all the issues. The mediator may help clarify misunderstandings and make discussion of the issues less stressful.

The mediator does not “decide” or “rule” on any issues and cannot force a settlement.

Mediation only works if both parties are willing to resolve their dispute.

If one party refuses to compromise and refuses to listen then the mediation will fail.