By Brian S. Kabateck
The presidential election in November 2020 will be one of the most pivotal when it comes to disability policies and long-term disability insurance. A quarter of the nation’s adult population is living with some type of disability, so this is a critical issue.
The Trump Administration has radically reshaped disability policy and procedures in the United States, and four more years could see an even more severe impact. Several Democratic candidates for president have issued very specific plans for those living with disabilities, the most detailed may have come from Senator Elizabeth Warren, all of which could again change how carriers interact with insureds.
Over the past three years, we’ve seen the federal government’s efforts to restructure long-term disability (LTD) by tightening social security disability insurance (SSDI) which will affect the LTD carrier’s bottom line. Basically, it is now harder for the average person to get SSDI which will have a direct impact on how carriers behave.
The more money carriers have to pay out for claims the more claims they will deny in order to stay as profitable as they’ve promised their shareholders they will be. Carriers may also piggy-back on SSDI denials even though definitions of disability are different between carriers and the social security administration.
All of this makes for a very difficult and complex insurance landscape for people who need to make disability and long-term disability insurance claims. There is fear among some disability advocates that Trump’s proposed changes could end disability benefits for thousands of people nationwide.
However, multiple Democratic presidential candidates are looking for a major overhaul of their own that will potentially allow for greater coverage and benefits. Several candidates are pushing to fully fund the Individuals with Disabilities Education Act meant to guarantee free public education for children with disabilities. They are also seeking to end the sub-minimum wage which allows some workers with disabilities to be paid below minimum wage.
Senator Warren’s proposal is extremely detailed when it comes to SSDI and Supplemental Security Income, providing changes to eligibility and income limits. Senator Bernie Sanders has a plan to tackle the issue of disability which includes sections on immigration, criminal justice reform, housing, transportation and more which all impact people with disabilities.
For those with private long-term disability insurance, either through their employer or by other means, anything that happens with federal policy will have a powerful ripple effect. While insurance companies market themselves as being helpful when insureds need help, quite the opposite is true for most Americans. Complex claim processes, contentious reviews, and outright denials are the norm for so many Americans to make claims on their LTD policies with private carriers. When there is a dramatic shift in public disability policy, private insurers will figure out a way to use the new rules to further deny and delay coverage.
Few, if any, people spend much time thinking about long-term disability insurance and most types of disability insurance until it’s too late. The heavy financial burden caused by a disability, no matter how mild, is long-lasting and can often be devastating. In a perfect world, individuals would be able to purchase LTD insurance and should these costs arise later in life, the money would be there for them. For those people unable to purchase this, or to those born with disabilities, the federal government would help provide coverage.
Unfortunately, we do not live in a perfect world and expecting an insurance carrier to do anything but worry about its own bottom line is pointless. If you have private insurance, work for a non-profit or work for the government you have legal standing for an insurance bad faith claim.
California law defines certain acts and conduct that can qualify as bad faith, which includes:
- Unreasonable denial of policy benefits.
- Misrepresenting facts or policy provisions to claimants.
- Failing to respond or act in a timely manner on a claim.
- Lack of reasonable standards for the prompt investigation and processing of claims.
- Failing to either approve or deny claims within a reasonable time period after the loss was submitted.
- Refusing to settle the claim in good faith when liability is reasonably clear.
- Forcing the insured to litigate the claim because the insurance company has refused to make an adequate settlement offer.
- Misleading a claimant as to the legal deadline for filing a claim or initiating a lawsuit.
- Advising the insured not to hire a lawyer.
- Failing to give a reason for denial of a claim.
- Threats by the insurance company to compel its insured to accept an unreasonable settlement offer.
If you wish to learn more about your rights in this area of the law, give us a call today. An experienced attorney at Kabateck LLP can help you explore all of your options and ultimately achieve for you the maximum compensation for your harm.