"Finally a light bulb went off: my job required me to terminate and deny claims."
Nee worked for Unum from 1994–2002. During that time she worked for the VP of compensation and says she was privy to pre-merger and executive stock-related information. For the last six years she was a Claims Handler, until she was terminated.
Nee was fired shortly after Dateline NBC and 60 Minutes aired an exposé of Unum in October 2002. According to Nee, she was fired for whistleblowing, but Unum said she was terminated for "poor performance," even though she received considerable pay raises up to and including a month before she was terminated. "But if I were Unum I would have fired me too," says Nee. "I was a lead customer specialist giving away Unum's unfair claims practices to regulators."
According to Bloomberg (December 2003), Nee, a veteran claims handler at Unum's head office in Portland, Maine, and other employees there say they started seeing a more ruthless approach to claims. The pressure peaked, they say, in the last month of each quarter—the "scrub months," when managers looked for claims to terminate to get under budget. The company vigorously denies that it rejects claims for financial reasons and says that Nee was fired for poor performance. Nee, who worked for Unum for eight years, confirms that she was terminated, but says it was because the company began to see her as a whistleblower.
"I thought if I went to management and brought to their attention illegal and unfair claims practices, they would listen to me. Instead they put me on probation and basically told me to 'shut my mouth.' Unfortunately management was paranoid about who was blowing the whistle (Dateline NBC had the whistleblowers behind screens—Unum didn't know who they were) so I got caught in the crossfire. But after Dateline aired I was fired, even though I was bringing in millions of dollars for the company—one of their 'best and finest.'"
(In April 2004, The Los Angeles Times reported that "A novel whistle-blower lawsuit filed in Los Angeles alleges that the nation's largest disability insurer, UnumProvident Corp., withheld benefit payments to meet financial targets…Linda Nee claims that she was fired 18 months ago after bringing reports of wrongdoing to the attention of her supervisors.")
What exactly are financial reserves? Nee explains that, when an individual makes an application for a disability claim, there are federal and state regulations that require Unum to set aside a certain amount of money as a buffer to pay for this claim. This buffer creates a liability—or loss—for the company. On the other hand, when a claim is denied, it creates an immediate contribution to profit. So the game of disability insurance is really about how the company can decrease its financial reserves and show a profit.
"Nothing happens at Unum unless they have a financial reserves agenda," Nee adds. "Their motivation is how everything affects the financial reserves. There is no philosophy or internal procedure in place that asks a claims handler to talk with clients. Some handlers have even telephoned clients in the recovery room, right after surgery—Unum isn't a people-oriented company."
According to Nee, this is how it worked while she was an Unum employee.
"Unum tries to identify the 'biggest bang for the buck.' If they can get a list of the financial reserves in decreasing amounts, the manager would tell the claims handler to, say, concentrate on the $5 million claim, then the $3 million claim, etc. Why try to deny a lot of claims when you can deny the bigger claim?
"Say I have cancer, for instance. My claim is $7,000 per month until I am 65 years old, so it could be worth about $4 million. Your claim is only $75,000 so Unum will go after my claim. When I terminate your claim, Unum will only get $75,000 profit. In other words, claim handlers are instructed to locate and terminate the highest claims with the biggest financial reserves. And based on file information that I review, it appears that Unum is still doing this same practice."
How does Nee know that Unum is still practicing this tactic? "I know that because unfortunately, I did it," she says. The bottom line is that Unum has their claims process so fine-tuned that any good Claims Handler can randomly select a claim; put it through the process; deny it and make it look credible—internal protocols are that good.
"At first, I told my boss that I didn't have any deniable claims—but my job was at stake. Then I would simply shut my eyes and randomly pull out a file. That claim would be denied within a reasonable period of time. I was made to do it. I'm not proud of it and that is why, for the past ten years, I've been working with people on the other side of the fence."
Which begs the question: How can any insurance company practice bad faith so blatantly? "Regulators need to conduct more audits in which actual claim files are reviewed," Nee opines. "Insurance is state-regulated, so some insurance commissioners provide little support to insured and they are reluctant to enforce insurance consumer protection laws that are already on the book. Rather than investigate and make an appropriate decision, Unum pays out a certain amount of claims so they can maintain a certain amount of profitability."
Nee goes on to say, "Just about all disability insurers practice bad faith insurance, but Unum crosses the line more than the other companies. And Unum is the only company that has been fined significantly. The multi-million dollar settlement in 2003-2004 also required Unum to reassess 250,000 claims." In January 2006, insidermagazine.com (the site is now blocked) reported that:
"The multi-state settlement agreement reached after an examination by a Boston Law firm cozy with the company spells out that the claims will be reassessed by a special unit formulated within UnumProvident.
But according to confidential employee sources and claimants who have been through the new loop, business is the same despite the agreement that calls for favorable reinstatement of claimants already on Social Security Disability. But the company had provisions written in the multi-state settlement giving them the option to deny those claims again based upon what it deems as incompetence of Social Security Awards."
But did Unum reassess all of those claims? Nee says that, based on the information she has, Unum did reassess the claims but there is some controversy. She believes that only about 60 percent of the claims were reversed, so for 40 percent of denied claimants, the reassessment process didn't turn out well.
And there was no admission of guilt by Unum. "If Unum has done any wrong, they won't reverse their decisions. They will take the claimant into bankruptcy and lowball the settlement on the courtroom steps.
In March of this year, LawyersandSettlements.com reported that a class action was brought against Unum after plaintiff's claims for disability insurance benefits were denied or terminated. But in April 2008, regulators with the DOL had determined that Unum had met all requirements of a Regulatory Settlement Agreement (RSA) that was put into place after the class-action lawsuit against Unum had already been launched…
Why does Nee hit Unum so hard? "Because I think they cross the line more than any other insurance company," she says. "And I can see what is going on in the disability claims industry nationwide. Recently Unum is attempting to deprive insureds of having a witness at independent medical examiner evaluations (IME). They are excluding witnesses based on qualifications." Nee showed this reporter a letter from the Unum Benefit Center (May 2011) to a claimant requesting as much.
"In other words, Unum is now claiming the right of excluding a witness and they have no right to screen witnesses," explains Nee. "And Unum is now claiming that, if an insured wants to audio-record an IME, they must use a court reporter selected by Unum; they have to pay for it; and they have to give Unum a copy of the report. What a good deal for Unum!"