You have probably seen surveillance footage of a fraudulent disability insurance claimant who claims to have a bad back, but is caught on camera lifting a heavy carton. What the cameras do not show is the legitimate disability claimant who is denied benefits by their insurance company.
Unless you know someone personally who has been denied disability benefits from an insurance company, you might harbor a suspicion that claim denial is generally because the insurance company suspects fraud. After all, you never hear about the insurance company committing fraud on its own clients. However, voluminous court cases will attest that insurance companies are notorious for denying disability insurance. This is especially true when the claimant makes over $50,000 a year.
The reason you seldom, if ever, hear about insurance companies committing this type of fraud is commonly for one of 3 reasons.
- The claimant is broke and trying to keep food in their belly and a roof over their head. Dealing with both the financial cost and physical pain of their disability leaves little time, or energy, to fight the insurance companies.
- Less than 6% of the people who have been denied their disability benefits will sue the insurance company. This might be due to the fact that the insurance companies have successfully lobbied many states to change their laws to favor the insurance companies.
- Insurance companies have been known to offer a claimant a partial settlement, along with a warning, that if the claimant does sue (and is successful) it will be years before they see any money. For example, if they have a policy worth a half-million they might be offered $50,000 to settle now or wait for whatever money the suit will bring. The insurance companies have lobbied for laws that restrict any awards to the face value of the policy. All settlement payments are given with the stipulation that a non-disclosure form be signed. That is why you never hear about this type of settlement.
A new wrinkle has surfaced in how insurance companies are taking the spotlight off of themselves for denial and have shifted it to a new group called Certified Rehabilitation Counselors (CRC). The Commission on Rehabilitation Counselor Certification (CRCC) certifies and sets standards for rehabilitation counseling in the United States and Canada. It is an non-profit organization with over 35,000 members.
When you file a disability claim one of the first things that will be requested by the insurance company is a list of skills required to do your job. What is not explained to you is that if you can do any one of those skills, that you have listed, you can be denied disability benefits.
The analysis of what marketable skills you have is often performed by a CRC member. It is their job to report to the insurance company if you can be employed with the skill set that remains available to you. It appears that the insurance companies are applying pressure to CRC members to help them in their denial of disability claims. At least that is indicated in a recent survey of 7,660 members.
The CRCC survey queried members about their perceptions of ethical dilemmas and implications for code of ethics revisions. At the top of the list, members were most concerned about being pressured by their employer, followed by confidentiality and exceptions to confidentiality. When members were asked about what concerns they foresee in the future they responded that their concerns for the future are the same as they are today–employer pressures and issues regarding confidentiality.
Some interpret the CRCC survey as further proof that the insurance companies are creating a firewall to burn their claimants. The insurance companies have taken the spotlight off themselves and shifted the attention to the certified rehabilitation counselors. Nolo Press list eight reasons you may denied benefits.