Late applying for disability benefits from ACTIVE private policy. Help?
June 7, 2022 8:46 PM Subscribe
This is all happening in NY state. YANML. tl;dr: I need advice on how to get long term disability insurance payments from NW Mutual, a private insurer, on a policy that is currently fully active and up-to-date wrt premiums, but which says that the deadline for applying for benefits has passed a long time ago. Details inside.
Details:
My friend, who had worked as an accountant for 25 years at the same employer, became disabled and stopped working in Sep 2020. After losing their sibling to cancer in April 2020, their pre-existing conditions of bipolar disorder, anxiety, and severe insomnia became suddenly exacerbated, their previously used medications stopped working, and they also became severely depressed (incl. suicidal for many months). My friend's psychiatrist is willing to provide documentation attesting to these issues, including certifying that my friend is disabled and cannot work.
My friend gets a panic attack (fainting, high heart rate, sobbing uncontrollably, shaking uncontrollably) when they think about doing any kind of paperwork. (And due to their issues with meds, there is no medical solution to reduce the panic attacks.) Directly as a result of their disability, my friend has failed to follow up on applying for disability. They did not do any of the necessary steps to apply for disability benefits. I found out about this just three weeks ago, and I am now tackling it on their behalf.
(1) State & Federal disability: They did not apply for the small amount of NY state STD benefits for which they were eligible. I haven't looked into this yet, no idea whether it's still possible to apply. They have not applied for SSDI either. I have not yet looked into or started working on the SSDI application because I've heard it's very complicated, and right now I would like to go after low hanging fruit first if possible. SSDI benefits will also be much smaller than the benefits from the active LTD policy described in (3) below, so I am leaving SSDI for later. (I am a single parent with a full time job and a house to manage on my own. Time is limited. I can't do everything for my friend at once.)
(2) Employer-paid Disability Policies: There were two NW Mutual policies that were provided and paid by the employer: STD and LTD. Both of these expired (we assume) once employment ended because the employer stopped making payments. We are not currently trying to get payments from these policies, I have not investigated.
(3) Self Paid Disability Policy: There is another NW mutual policy for LTD which was originally purchased as an optional additional policy through the employer but never paid for by the employer. Premiums used to be taken out of my friend's paycheck directly but now the premiums are being taken out of their bank account directly. This policy is still active. My friend is making premium payments on this policy still. I see withdrawals from my friend's bank account monthly. The payments from this policy would be quite high, if my friend was successful in getting it. Therefore this seems to me like low-hanging fruit that we should go after right away.
This last NW Mutual long-term disability policy says that my friend must apply for it within 90 days of the start of the disability. That deadline has long since passed. When I called NW Mutual they were extremely unhelpful, saying my friend must first apply for short term disability (the PRESUMABLY LAPSED (??!!) employer-provided STD policy which is through the same provider - wtf) before applying for this long term disability payment. I had to hang up due to time constraints, but I want to be better prepared for the conversation next time.
My question is: what should we do about obtaining the benefits from the NY Mutual LTD policy which is still current? Is it a lost cause? Should we just give up? It seems like my friend ought to be entitled to payments since the policy is active! And because the delay in applying is 100% because of the disability itself!! But how?
TIA
Details:
My friend, who had worked as an accountant for 25 years at the same employer, became disabled and stopped working in Sep 2020. After losing their sibling to cancer in April 2020, their pre-existing conditions of bipolar disorder, anxiety, and severe insomnia became suddenly exacerbated, their previously used medications stopped working, and they also became severely depressed (incl. suicidal for many months). My friend's psychiatrist is willing to provide documentation attesting to these issues, including certifying that my friend is disabled and cannot work.
My friend gets a panic attack (fainting, high heart rate, sobbing uncontrollably, shaking uncontrollably) when they think about doing any kind of paperwork. (And due to their issues with meds, there is no medical solution to reduce the panic attacks.) Directly as a result of their disability, my friend has failed to follow up on applying for disability. They did not do any of the necessary steps to apply for disability benefits. I found out about this just three weeks ago, and I am now tackling it on their behalf.
(1) State & Federal disability: They did not apply for the small amount of NY state STD benefits for which they were eligible. I haven't looked into this yet, no idea whether it's still possible to apply. They have not applied for SSDI either. I have not yet looked into or started working on the SSDI application because I've heard it's very complicated, and right now I would like to go after low hanging fruit first if possible. SSDI benefits will also be much smaller than the benefits from the active LTD policy described in (3) below, so I am leaving SSDI for later. (I am a single parent with a full time job and a house to manage on my own. Time is limited. I can't do everything for my friend at once.)
(2) Employer-paid Disability Policies: There were two NW Mutual policies that were provided and paid by the employer: STD and LTD. Both of these expired (we assume) once employment ended because the employer stopped making payments. We are not currently trying to get payments from these policies, I have not investigated.
(3) Self Paid Disability Policy: There is another NW mutual policy for LTD which was originally purchased as an optional additional policy through the employer but never paid for by the employer. Premiums used to be taken out of my friend's paycheck directly but now the premiums are being taken out of their bank account directly. This policy is still active. My friend is making premium payments on this policy still. I see withdrawals from my friend's bank account monthly. The payments from this policy would be quite high, if my friend was successful in getting it. Therefore this seems to me like low-hanging fruit that we should go after right away.
This last NW Mutual long-term disability policy says that my friend must apply for it within 90 days of the start of the disability. That deadline has long since passed. When I called NW Mutual they were extremely unhelpful, saying my friend must first apply for short term disability (the PRESUMABLY LAPSED (??!!) employer-provided STD policy which is through the same provider - wtf) before applying for this long term disability payment. I had to hang up due to time constraints, but I want to be better prepared for the conversation next time.
My question is: what should we do about obtaining the benefits from the NY Mutual LTD policy which is still current? Is it a lost cause? Should we just give up? It seems like my friend ought to be entitled to payments since the policy is active! And because the delay in applying is 100% because of the disability itself!! But how?
TIA
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(1) Make sure you have the policy numbers for all the policies the next time you call, so you can make sure they are not making any mistaken references to the lapsed policies.
(2) It may be that the 90-day restriction simply refers to one's ability to receive retroactive payments (e.g., if you wait five years to apply, they're not going to pay for the full five years). But very hard to tell without seeing the policy. Some policies do have such restrictions. However, they usually also have some sort of "good cause" exception built in, but you may have to push for that.
(3) There is probably some sort of "elimination period" which is sort of like the insurance equivalent of a health care deductible. That is, the policy doesn't kick in until the policyholder has been disabled for [x] number of days. The waiting period, or most of it, would ordinarily be covered by short-term disability.
(4) NY state STD benefits do require you to apply within 30 days of becoming disabled, so you're probably out of luck there.
(5) Insurance in NY is overseen by DFS, and you can make a complaint here. They can't represent your friend, but sometimes state involvement can help cut through red tape.
(6) Note that when you're ready to look at SSDI, you can get a lawyer to assist with an SSDI benefits application on contingency (there's a statutory cap on the percentage they get). There's a whole cottage industry of such lawyers. Note that the private insurance probably requires your friend to apply for SSDI within a certain time period after beginning payouts, and may offset those payments against its own.
I'm sorry your friend is going through such a rough time. I hope this helps a little.
posted by praemunire at 9:52 PM on June 7, 2022 [2 favorites]