People purchase long-term disability insurance in the hopes that they will never need to use it. Unfortunately, accidents and incidents can happen and make it necessary to file a claim. Those who expect a rapid decision and to receive benefits are often disappointed with an extended wait time.
Although a waiting period is to be expected when filing a claim, an unnecessary delay can exacerbate the challenges the worker and their family will face. Those who have a workplace plan are protected by the Employee Retirement Income Security Act of 1974.
Still, after a claim, people who believe the delay is beyond that which is reasonable should know how to ensure they get that decision in a timely manner. If the claim is denied, they must also be aware of what options are available to them.
Once a person has ensured they are eligible to receive benefits, they must file the claim. Under ERISA, there are limits as to how long it takes to conduct an evaluation and decide. The decision is expected to be made in a “reasonable” time-frame. In general, the decision must be made within 45 days from when the claim is received. Despite that, there are situations in which it takes longer.
The insurance company might say it needs more time to conduct its review. This is allowable if the claimant is informed within the 45-day window; there is an explanation as to why this is the case; there is no request for more information; and the person is told when they can expect the decision. It can be extended for up to 30 days. It can also ask for more information in this context and this too will warrant an extra 30 days to make the decision.
After the first review, the plan can ask for another extension before deciding on whether to approve or deny the claim. The person must be told prior to the expiration of the first extension. Then the case can be extended for another 30 days. If they ask for more information, the person will have 45 days to provide it and this too will extend it for 30 days. In some cases, the plan will ask for still more time to make its decision. It cannot delay the decision any longer unless the person approves the extension.
After a denial, the person must be notified with a clear explanation as to the basis for the denial. The plan might even deny the claim if a medical professional or vocational expert who examined the person and provided treatment stated it was appropriate to approve the claim.
Each plan has provisions, rules, guidelines and more that the person should be cognizant of beforehand as these could be used to justify the denial. After a denial, knowing how to lodge an appeal is critical.
The objective of having long-term disability insurance is to be prepared. However, those who are vigilant and have insurance to mitigate the possibility of an accident, illness, condition, injuries and cognitive issues might be surprised to see a delay in the decision. This will be made worst if it is subsequently denied.
Simply because there is a delay does not automatically indicate there will be a denial. Despite that, it is wise to be prepared by knowing the parameters of a claim, when the plan can ask for extensions, what the plan specifically says and what can be done after a denial. It may be necessary to fight for the benefits. There are various avenues available to make sure there is a fair determination.