When healthcare companies falsely deny disability insurance claims, it can mean a long process of appeals to regain benefits. Research shows that the average long-term disability lasts nearly 35 months, which can mean a negative financial impact on the disabled person. When healthcare companies deny disability benefits for reasons of bad faith – violating their duty to deal fairly with customers’ claims – an insurance attorney can help recover damages for benefit payouts and financial or emotional distress.
Healthcare companies deny disability claims for many reasons. The regulations according to the Social Security Administration (SSA) state that disability benefits can be denied for the following reasons:
- The disability is not expected to last more than one year.
- The impairment is not considered severe enough.
- The disabled person can still perform their employment duties.
- Another type of work can be performed.
- The disability is a result of drug or alcohol abuse.
- The disabled person is uncooperative, does not follow treatment plan or develop the claim, or returns to work ahead of claim approval.
In the case of private insurance companies, the reasons for denial can be the same, similar or completely different from the SSA regulations. All healthcare insurance companies have different disability definitions, so it is important for customers to carefully read their plan and coverage details.
According to the Council for Disability Awareness, the average long-term disability lasts 34.6 months. The 2014 Annual Report of the Institute on Disability reports that the median income of Nevada residents with disabilities was between $22,283 and $30,208. A three-year absence from work because of disability could mean a loss of up to $90,000 – if claims are not paid out. Of those between the normal working ages of 18-64 years old in the state of Nevada between 10.5%-12.6% are living with disabilities, the Institute on Disability reports.
Insurance companies have a duty to their customers to operate on good faith and practice fair dealings. When they violate this duty – such as wrongfully denying disability benefits – it is called bad faith. Bad faith by insurance companies can also be through benefits delay or a failure to give reason for the denial. A Reno bad faith insurance lawyer can help appeal a denied disability claim and recover damages due to emotional distress or financial loss caused by wrongful denial.
