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David vs. Goliath: How Disability Insurance Companies Unfairly Contest Long Term Disability Claims, Particularly ME-CFS Claims, and What To Do About It

It is often the case that people submitting claims for long-term disability benefits to disability insurance companies do so naively. The mistaken belief is that insurance companies will appreciate the nature of the medical condition and recognize that the person would much rather lead a happy, productive work-life rather than be disabled from work.

In reality, however, long-term disability claims are difficult to get approved, and lawsuits can be even more difficult to win. The purpose of this article is to bring to light the difficulty in getting a disability claim approved in general, and a disability claim based on ME/CFS in particular.

Insurance companies are especially antagonistic towards CFS. Although significant medical advancements in diagnosing and treating CFS patients have been made, and though there has been a slow erosion of public misunderstanding of the illness, insurance companies continue to deny perfectly valid CFS disability claims. But denying long-term disability claims creates financial hardship and life-stressors that can exacerbate the medical crisis of those suffering from CFS.

The failure of the law to afford legal protection to people with disability claims is perhaps the most significant reason insurance companies deny valid claims for long-term disability benefits. Not only is the law unfavorable, but the law arguably creates incentives for insurance companies to deny claims.

Most long-term disability insurance claims and lawsuits are governed by a federal statute called the Employee Retirement Income Security Act of 1974 (“ERISA). If the claim for disability benefits is made under a group disability insurance policy obtained through employment (as opposed to an individual disability insurance policy purchased directly from an insurance company or broker), then chances are ERISA applies. Conversely, state law governs individual disability insurance.

The difference in law is significant. Whereas most states have insurance laws that provide adequate safeguards and legal recourse to challenge denied disability claims, ERISA falls way-short in this regard. A memorandum by an insurance company executive succinctly summarizes the disadvantages of ERISA to the unwary person fighting to get disability benefits approved:

. . . state law is preempted by federal law, there are no jury trials, there are no compensatory or punitive damages, relief is usually limited to the amount of benefit in question, and claims administrators may receive a deferential standard of review.[1]

One federal judge – Judge William Acker, Jr. – has been vocal about this disdain towards the federal statute, remarking that ERISA stands for “Everything Ridiculous Imagined Since Adam”.[2] The irony of ERISA is that one of the stated purposes the United States Congress enacted the statute was to “protect . . . the interests of participants in employee benefit plans and their beneficiaries” by setting out substantive regulatory requirements for employee benefit plans and to “provid[e] for appropriate remedies, sanctions, and ready access to the Federal courts.” 29 U.S.C. § 1001(b).

It’s no secret that insurance companies are disliked by most juries, but no jury trials are permitted in ERISA disability cases. Rather, a federal judge will decide who wins and the law may restrict the judge to considering only the documents in the claim file created by the insurance company during its review of the disability claim. Add to that limitation the fact that the judge may also be required to “defer” to the insurance company’s decision, meaning the insurance company loses only if the judge believes its decision to deny benefits was not just wrong, but also completely without a reasonable basis.

There is simply no teeth in the law to hold insurance companies accountable for the consequences to a disabled person when benefits are denied. An insurance company that loses a lawsuit – and they actually win most – will only be required to pay the benefits it should have paid in the first place (and likely your attorney’s fees). As should be obvious, the unintended consequence of ERISA is that it has created an incentive to deny disability claims.

It’s no wonder insurance companies will deny long-term disability insurance claims. CFS disability claims are particularly vulnerable because the illness, and disability because of it, cannot be proven using “traditional” medical testing (such as MRIs, X-rays, CT Scans, or other diagnostic tools). Insurance companies are aware that this sort of medical proof is not available. Yet, they routinely demand “objective” proof of disability in order to approve a CFS disability claim.

Another tactic employed by insurance companies is to hire a physician who either does not believe in the existence of the illness or does not have the medical expertise in CFS to examine the disabled person for the purpose of giving a medical opinion. Insurance companies will also have the person’s medical records reviewed by a physician it knows or should know is hostile towards CFS or just does not have the appropriate medical background.

Demanding “objective” proof of disability where no such proof exist can successfully be argued is unreasonable, particularly if the disability policy does not require such proof. An insurance company’s decision to retain the service of doctor(s) that lacks the appropriate expertise in CFS is also unreasonable.

While many legal arguments can, and should, be made, working closely with the treating doctor(s) to provide a mountain of medical evidence that proves disability will also help immensely. Focus on providing other forms of evidence that can be considered “objective” evidence, such as repeated clinical findings upon physical examination and clinical observations by the treating physicians. Getting under the care of a physician with expertise in CFS further strengthens this type of medical proof.

Medical questionnaires specific to CFS should also be completed by treating physicians and submitted to the insurance company. Also, while no test is perfect, some tests are better-suited for establishing physicals restrictions and limitations for illnesses like CFS. The CPET is one such test and it can be a useful tool for establishing disability since post-exertional malaise – one of the hallmark symptoms of ME/CFS – is factored into the testing.

Finally, it is important to send all available proof of disability as soon as possible. Once the insurance company denies a long-term disability appeal, no additional evidence will be accepted by the insurance company and possibly even by the federal court in any ensuing lawsuit.

Despite the uneven playing field in long-term disability claims, understanding why insurance companies deny perfectly valid claims and what to do about it will increase the likelihood of getting disability benefits paid.

[1] John H. Langbein, Trust Law as Regulatory Law, 101 Nw. U. L. Rev. 1315, 1321 (2007).

[2] This comment was imbedded in Judge Acker’s decision in the case of Florence Nightingale Nursing Service, Inc. v. Blue Cross and Blue Shield, 832 F. Supp. 1456, 1457 (N.D. Ala. 1993), affirmed, 41 F.2d 1476 (11th Cir. 1995).