Long-Term Disability in Washington
July 19, 2022
According to a survey by the Council of Disability Awareness (CDA), only two percent or less of today’s workers believe they have a chance of being disabled and unable to work for more than three months during their career. In fact, for someone entering the workforce today, the odds of sustaining such a disability is actually 25 percent.
In about 40 percent of America’s workplaces, employers offer long-term disability (LTD) insurance policies designed to help compensate a worker who must go out on disability leave. These policies are all covered by a federal law known as the Employee Retirement Income Security Act, or ERISA. Though the name sounds employee-friendly, many ERISA provisions help insurers limit and deny disability benefit claims, or at least make it harder to win an appeal.
Employees are also free to purchase individual insurance policies from companies such as Hartford, Unum, MetLife, Cigna, Lincoln Financial, and more. These companies and their individual policies are not governed by ERISA and can establish their own claims and appeals policies subject to state laws and regulations.
What Is a Long-Term Disability?
Each long-term disability policy will define disability and also address pre-existing conditions, so you need to read the fine print carefully. Sometimes an exacerbation of a pre-existing condition will be excluded for the first year.
Qualifying disorders can fall into different categories. Chronic illnesses can include fibromyalgia, asthma, lung disease, kidney disease, and heart disease. Degenerative diseases can include Huntington’s, Parkinson’s, osteoarthritis, and ALS (Lou Gehrig’s Disease).
Neurological disorders can include stroke, epilepsy, migraines, Bell’s Palsy, and peripheral neuropathy. Mental conditions include depression, anxiety, bipolar disorder, personality disorders, and post-traumatic stress disorder (PTSD).
Other qualifying conditions include deafness or hearing loss, blindness or vision loss, chronic pain, chronic fatigue, and certain long-term injuries.
A statement by a physician accompanied by test results will be needed to establish your eligibility for LTD benefits.
Long-Term Disability Law in Washington
Remember that company-sponsored LTD insurance plans are governed by federal law and must be argued in federal court if the claims and appeals process reaches that point. The State of Washington does have laws on its books that govern the conduct of private insurers.
The Insurance Fair Conduct Act (IFCA) states that “An insurer engaged in the business of insurance may not unreasonably deny a claim for coverage or payment of benefits to any first party claimant.” In addition, Washington Jury Instructions, WPI 320.02 called “Insurer’s Duty of Good Faith,” states:
“An insurer has a duty to act in good faith. This duty requires an insurer to deal fairly with its insured. [The insurer must give equal consideration to its insured's interests and its own interests, and must not engage in any action that demonstrates a greater concern for its own financial interests than its insured's financial risk.] An insurer who does not deal fairly with its insured [or who does not give equal consideration to its insured's interests], fails to act in good faith.”
Unfortunately, unless the insurer in question is domiciled in Washington State, any lawsuit will need to be filed and heard in a federal court. If it’s an employer-based policy, ERISA will apply. If not, federal rules will apply.
Filing an LTD Claim
ERISA sets forth standards for filing a claim for LTD benefits. The Summary Plan Description (SPD) provided when you sign up for your LTD policy should describe how to file your claim. If you have a representative such as your attorney filing for you, you may also have to submit a form naming that person your representative.
ERISA then sets standards on how long the LTD insurer has to act on your claim. Generally speaking, they have 45 days to respond, but they can also request a 30-day extension if they need more time or if they need further information. After that, they can request another 30 days if they feel they still need more time.
The claims process for a non-ERISA insurer can vary from company to company, but again, the Summary Plan Description or policy itself should explicitly spell out the process.
In either situation, your physician will need to provide a statement concerning your condition and why it prevents you from working, as well as supplying test results to verify the findings reached.
How Benefits From Other Sources Affect Your Claim
If you are receiving workers’ compensation benefits, the LTD insurer will use that as an offset. Say you’re receiving $3,000 a month for your inability to work under workers’ compensation and your LTD benefits are $3,500, the LTD insurer can reduce your benefits to $500 a month until your other benefits run out.
Also, many LTD insurers require you to apply for Social Security Disability Insurance (SSDI) when you apply for benefits under their policy. The insurer will then use what you receive under SSDI as an offset. Also, if you are approved for SSDI and receive a retroactive payment check, you are normally required to pay the amount back received from the LTD company before the SSDI check.
Experienced Legal Guidance You Can Trust
An LTD insurer, regardless of being governed by ERISA or not, is going to use every means to challenge your claim. The most frequent reason cited for denial of a claim is insufficient medical evidence. You need to make sure from the start that your disabling condition is fully documented and supported by test results and even testimony by family members, friends, and coworkers regarding your condition.
If you’ve suffered a disabling condition that prevents you from continuing your current work in Washington and you need to file an LTD claim for benefits, contact me at Victor Peña Law PLLC. Located in Fort Lauderdale, Florida, my firm handles cases in any city throughout the country.