Surveillance is a frequent tool used by disability insurance companies to try to deny or terminate claims. We often hear from claimants: "I have nothing to worry about, because I am actually disabled. Let them follow me;" "I would know if I were under surveillance;" and "my claim is not worth enough for my disability insurance company to pay to surveil me." Unfortunately, these common misconceptions about insurance company surveillance all too often result in claimants being stunned that their truly deserving claims have been denied or terminated.
In a clip from FRONTLINE's League of Denial, neuropathologist Dr. Ann McKee discusses the brain of Penn football player Owen Thomas, who took his own life at age 21. After Thomas's death, Dr. McKee studied Mr. Thomas's brain and was shocked to find evidence of Chronic Traumatic Encephalopathy.
Lincoln Financial Group has announced that it has entered into an agreement to acquire Liberty Life Assurance Company of Boston from Liberty Mutual Insurance Company for $3.3 billion. The acquisition is expected to be completed in the second quarter of 2018. With this acquisition, Lincoln Financial is posed to become number one in combined fully insured disability sales market share in the group benefits area, as well as third in the combined total life and fully insured disability sales market share. It is not yet clear when the full transition will take place, whereby current Liberty Mutual customers will be dealing directly with Lincoln Financial.
Hartford Financial Services Group just announced that it will purchase Aetna Inc.'s U.S. group life and disability business for $1.45 billion cash. Reuters reports that Hartford will use $273 million it has outstanding from its 2017 equity buyback program for the transaction, as well as dividends. It will not issue debt or equity for the purchase. "Hartford is financing the deal by dividends and clearly mentioned that it will not authorize an equity repurchase plan for 2018, driving the shares down," Atlantic Equities analyst John Heagerty said. The transaction will make Hartford the second-largest provider of group life and disability insurance in America with more than 20 million customers. It will also give Hartford access to Aetna's digital assets to improve its workers' compensation and disability claims processes. The assets include an integrated absence management platform.
Almost fifteen years ago, Unum Provident entered into a historic multi-state settlement with 3 lead states, 46 other states and the District of Columbia, as well as the U.S. Department of Labor, that cost it in excess of $120 million to comply, required it to reassess claims it has denied dating back to 1997, and called for an additional $15 million in fines. Maine Superintendent at the time, Alessandro Iuppa, was quoted by the Insurance Journal as saying, "This action is one of the most significant multistate insurance regulatory actions in history, providing a uniform, verifiable and effective state-based settlement for the benefit of UnumProvident policyholders nationwide." But did the over $135 million paid by Unum and the substantial, extensive corrective action and requirements of Unum under agreement, along with risk of another $145 million or more in fines, deter UnumProvident from continued bad faith claims handling?
Troiano v. Aetna Life Insurance Company, No. 16-1307 (1st Cir. 2016), involved a disability insurance claimant who was approved by an ERISA Plan Administrator, Aetna, for monthly disability benefits. However, the parties disputed how benefits should be calculated. A provision within the Aetna Disability Plan allowed Aetna to offset the amount of Social Security disability income ("SSDI") benefits the claimant received from the Social Security Administration ("SSA") from the benefits Aetna paid the claimant on a monthly basis. The claimant argued that the provision only allowed Aetna to deduct the net (post-tax) amount. Aetna argued it was permitted to offset the higher, gross (pre-tax) amount. The district court ruled that Aetna's interpretation of the disability Plan language was reasonable and entitled to deference. The First Circuit Court of Appeals upheld the district court's rulings, noting that the dispute was not about whether the claimant's SSDI benefits could offset the monthly Aetna disability payments, but whether the administrator may use the higher, gross amount of the SSDI payments for offset purposes.
After putting herself through law school, Victoria was offered and accepted a position as an associate attorney in a medium size law firm handling contract disputes. Victoria enjoyed the practice of law immensely and due to her strong work ethic and drive, she ultimately became a partner in the firm. Eight years after starting her career, Victoria began to experience severe and overwhelming fatigue and vertigo. At first, she dismissed her symptoms, believing that she was run down from her busy work schedule. However, overtime her fatigue and dizziness intensified and she developed several alarming new symptoms such as chronic full body pain, numbness and tingling in her face and extremities, blurred vision, walking difficulty, and cognitive deficiencies. Victoria and her physician were understandably concerned. After a full work up, Victoria underwent an MRI of her brain which revealed significant white matter. She was eventually diagnosed with Multiple Sclerosis ("MS"). The diagnosis was devastating, but Victoria was determined to remain active and continue to work.
Most consumers purchase disability insurance coverage with the hope that they'll never have to use it....that the policy document will gather dust in a filing cabinet somewhere. The reason the disability insurance premiums are a justifiable cost is because the insurance provides a monthly income benefit if you can't work because of illness or injury. The coverage promises to protect you, your family and your assets if you become unable to earn an income because of a medical or psychiatric condition. So it should be no surprise that insurance companies capitalize on the purpose behind disability insurance in their advertisements. Carriers show images of unforeseen illnesses or injuries and desperate families with bills piling up, while comfortingly portraying their company as dependable, strong, compassionate, and there when you need them. The irony is that many times disability insurance companies act directly contrary to the caring and reliable images contained in their advertisements when it is actually time to pay claims of their truly disabled consumers.