“It’s a standard practice for Unum and other insurance carriers that they require policy holders to apply for social security disability benefits,” says Peter Burke. “They take it as an offset; it reduces the amount of benefits they owe the policy holder.”
Over the years, many people who have been cut off from Unum’s disability benefits have asked this reporter if this practice is legal. It is legal. However, it borders on bad faith practices.
“Most often the policy holder is a company like the policy holder’s employer, and more often than not, it is governed by ERISA,” Burke explains. “And some contracts require that the carrier steer the policy holder to services that help them apply for social security benefits.”
Such is Bob’s case. His Unum representative directed Bob to Unum’s in-house ‘Genex’— which provides disability case management, vocational rehabilitation and related services to corporations, third-party administrators, and insurance companies. “This practice with Genex has always confused me,” says Bob. “I did everything they told me to do. They never requested that I see one of their independent medical examiners. They said an Unum rep would come to my home because I couldn’t go to them--I have a walker and I don’t have a car. Nobody came.
"Genex was helpful and I can understand why they helped me apply for social security. Unum paid me $2700 per month but I only get $1600 per month from social security. Unum was going to make up the difference until I reached 72 -- I just turned 59.” Bob says they never made up the difference.
What is the federal government’s position on this practice—can Unum actually deny Bob by insisting he must collect social security benefits? Burke says the government’s position is that they are only going to pay if Bob is disabled, so it is an entitlement he has a right to, regardless.
This is what ends up happening. “Even though Unum requires Bob to apply for social security benefits, Unum’s criteria for being disabled is different from the government,” Burke explains, “so Unum will say, ‘The government’s definition is different than our policy and therefore, it may be relevant but it is not controlling’.
“Some egregious things can happen where the insurance carrier also requires the person to apply for social security. They go through the process and the carrier—such as Unum—stops paying benefits. Then a year later, the person is awarded social security benefits and Unum demands your overpayment, or back pay. Here is the kicker: Unum will no longer recognize that you are disabled. They will claim the record of the time of that decision is past. So that is where you get caught: the carrier is trying to get the government to accept your disability and pay your benefits, but then the carrier says 'oh by the way, we want you to repay money based on that finding of disability’.”
Burke adds that Unum, and other carriers, will typically give a credit to the policy holder against whatever fee they pay to a lawyer who helps get you that favorable decision from social security. Say you are entitled to $18,000 in back pay and your lawyer receives a fee out of that for $14,000. Unum will ask for $14,000 rather than $18,000. So Unum will acknowledge that the policy holder pays the lawyer. They just aren’t that generous with their policy holders.
If, like Bob, Unum tells you to apply for social security, Burke advises that you check your policy first--there will be a provision in your contract that talks about the duties you owe to them.
“One provision is that you must provide medical information and another is that you apply for benefits that you might otherwise be entitled to, including social security,” says Burke. “It is in your best interest to do so regardless. If you do qualify, the chance that the government cuts you off is a lot less likely than Unum, which is always mindful of the bottom line.
“You don’t necessarily need a lawyer to apply, but I think having one involved in the process, regardless at what stage, is beneficial: Your interests will be looked after in a way that they otherwise wouldn’t be. As well, the attorney’s office can act as a go-between with the medical providers and Unum to ensure that all relevant information regarding your disability is presented.”
Unum wants you to make a mistake. “For instance, Unum likes to put in their notes that you were supposed to call your doctor, you didn’t call, and your doctor didn’t respond,” adds Burke. “Your lawyer will have a paper trail, which is important if you have to appeal the decision. Most times it is done on the administration record, and you want to make sure all your ducks are in a row. In other words, make sure you have all the paperwork.”
Back to Bob…
“I got my first social security check in March of 2010 and Unum hasn’t paid me a dime since. Instead they billed me $10,000. But my social security administrator said my benefits go back to the day you are first disabled so I received back pay.”
Bob says that his social security rep told him not to pay Unum. “She said, ‘Do not pay Unum that $10,000 because they are notorious for taking that money and then canceling your policy,’ and that is exactly what happened. Unum sent me a letter soon after I got my first social security check and said that I was no longer disabled and I was perfectly capable of going back to work.
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I"’m not trying to screw Unum out of money—I just want what is mine. I will always be disabled; it isn’t like I can grow a new spinal column. It is like I have no rights anymore. Now I make $19,000 a year and that is considered beneath the poverty level. I am so grateful to have a roof over my head but that’s it. I have gone bankrupt. I rely on a food bank to get food and I am physically unable to do much.
"I want other people to know that Unum lies. They take money out of peoples’ pockets to further their own business and they definitely do not help their policy holders. I have talked to many people in similar situations. How companies like Unum stay in business is beyond me.”