DCS, Inc. has been receiving many calls and emails concerning whether or not the federal stimulus recovery checks will be an “offset” from disability benefits. As always, to ensure accuracy I made inquiries to a few prominent attorneys to solicit their take on this.
The general consensus from those I contacted is that the stimulus does not meet the “benefits received” or “disability or retirement” language in ERISA Plans and therefore should not be taken as an offset. In the end, the payment is not a disability connected BENEFIT, but a stimulus PAYMENT AND SHOULD NOT BE TAKEN AS AN OFFSET.
However, at least one attorney mentioned that if a Plan, in reference to offsets, says “benefits paid”, insurers might still try to take the stimulus as an offset, causing claimants a great deal of grief. These efforts on the part of insurers should fail, but not without a great deal of stress and anxiety to claimants.
I agree with the attorneys I contacted that “offsets”, as defined in various ERISA Plans, must always be paid as related to “disability” or “retirement”. The stimulus is more closely related to tax return refunds than it is to “additional income as a result of disability or retirement.”
As a Consultant, I’m also concerned that too many people may be trying to cash in their stimulus eggs before they’re hatched. It’s my understanding the amount of the stimulus will be based on Individual Tax return filings. A new deadline has been set to July 15th, so it could be that stimulus checks won’t be immediately forthcoming until after tax returns are filed and processed.
At the end of the day, we’re not talking about a BENEFIT, but a stimulus PAYMENT and it should not be taken as an offset.
But there are other things to be concerned about when it comes to disability claims. Attorneys, as am I, are concerned about insurers denying thousands of STD claims submitted by people who have been told to lock-down and stay at home. Insurers are likely to take the position that many people will submit Short-Term disability claims while locked-down and that these claims should be denied.
Think about it. Even if the impairment for STD is legitimate, making the choice to remain in self-imposed quarantine prevents individuals from returning to work, even when there is no opportunity of returning to work because employers are also locked down.
Those who have been laid off who suddenly apply for STD, and even those who are already on STD will be presumed to be making a “choice” not to return to work, and therefore STD will not be paid. Several attorneys have mentioned this as definite concern in the long run.
I have also been receiving many questions about what happens when treating physicians have closed their offices and it is not possible to provide completed forms. Patient records facilities have also closed down and patient notes cannot be obtained or submitted.
Insureds CANNOT PROVIDE WHAT THEY CAN’T GET, OR WHAT THEY DON’T HAVE. I have spoken to nearly all of the US insurers and have found the claims reps working at home without office resources. All of them have been very willing to extend any previously communicated deadlines and have told me that they will not be enforcing previously stated deadlines.
The problem seems to be back dated letters requesting updates from insureds prior to the outbreak of COVID-19 that are scaring insureds to death about meeting deadlines. Insurance companies are not likely to deny benefits for failure to provide during a national lock-down. Use common sense.
The key is COMMUNICATION. If your treating physician, facility, or patient medical record center has closed its doors, then you need to notify your insurer (in writing only) that you are unable to meet deadlines due to “government recommendations to lock-down until April 30.” Assure your insurer that your physicans have scheduled appointments into the future and you will provide the information as soon as possible.
It is not going to do insurers any good to wrestle with claimants/insureds over deadlines during a national pandemic. If you are my client, I will communicate the information to your insurers for you.
If you are not a client, I suggest notifying your claims rep in writing that your doctor’s office is closed until further notice. Communicate the fact that you are unable to meet the current deadlines, but that you understand the request and will provide the information as quickly as possible when you are able.
The worst thing insureds can do is NOT COMMUNICATE what’s going on, and just not respond to any request. Let your insurer know what’s going on. My impression is that all claims reps are scared themselves and are very cordial and flexible with deadlines.
Some insureds are panicked about deadlines, but insurers are taking the high road on this and are actually not enforcing deadlines, even if they could administratively. Claims reps are on lock-down themselves, without office resources, and are only checking their voice mails every few days.
So, my recommendation to insureds is to take a breath, apply common sense, and COMMUNICATE the situation to insurers in writing. YOU CANNOT PROVIDE WHAT YOU CANNOT OBTAIN, OR DO NOT HAVE. Inform your insurers, making sure you are putting documentation in your file if your physicians’ offices have been shut down.