Disability insureds have seen tremendous changes concerning the manner in which insurers review and pay claims. While the majority of change was due to COVID and the necessity of handling increased claims without mounting losses, the truth is that disability insurers had already cut-back overhead to meet financial needs long before the SARS 2 outbreak.
The usual stereotype of insurance companies, with a campus and centralized leadership, transitioned into remote access employees that could be geographically anywehre. Although I’m sure there exists some sort of management of disability claims, there is evidence suggesting that claims handlers are more or less left to their own reviews of information, but still lack the autonomy to make claim decisions on their own.
The fragmentation of the claims process continues to cause problems as ill-trained claims specialists and absent leadership continues to cause problems involving timliness of decisions, access to communications, and lack of customer service. While in the past insurers prided themselves on their customer service, contacting a claims specialist is nearly as impossible as raising the dead.
I would also suggest that claims handlers are not well trained and often cannot answer questions of any substantive value. In the last several months I’ve spoken to several managers who also appear to be devoid of any knowledge concerning ERISA in particular. The lack of leadership in combination with ill-trained claims personnel is causing insureds and claimants even more confusion and frustration about their claims than in the past.
The ultimate result of insurer company fragmentation is a process that no longer goes from Point A to Point B. The breakdown of various communication centers and admin areas have shown that more and more paperwork submitted by insureds is getting lost. Insureds often have to fax or send information several times before it gets to the right place, if it every does. In the meantime, no one knows where it is, and no one can find it.
Claims handlers are not reading the “totality of each claim file, therefore, specialists lack full knowledge of the circumstances of each claim. From my communications with claims handlers, it appears to me anyone who has access to files reads only the first 10 pages or so. This is usually enough to deal only with “current” issues and requests, but not enough to see the macro view of a disability.
Reports and calls to claims managers is largely 5 minutes no one can get back, since they, too, are lost in the maze of knowing what’s going on. And although it’s their job to stand behind their direct reports no matter what, managers usually promise to help and supervise, but rarely do. They are also working remotely, and are hard to get in touch with.
Perhaps my biggest concern as a managing Consultant is that very few parties within the claims process, whether working remotely or not, seem to have any knowledge of Plan or policy language beyond what they are told by templates to cite in their letters. As a Consultant, and expert contract specialist, my practice is to hold insurers accountable for what’s in the contract.
But, claims handlers, and often, managers, have no idea how to adjudicate policy or Plan provisions. Still, when writing letters contract language mysteriously appears as rote templates taken from official documents. How can a claims handler manage claims when they have limited knowledge about actual Plan or contract policy provisions? It’s a nightmare because most insureds also have limited knowledge and don’t know how to support “what the Plan or policy says.”
These new sporadic internal methods of managing disability claims will NOT be rolled back as COVID winds down. So, the question is, “Where do insureds go from here?” Unfortunately, claimants and insureds will be required to know much more about their claims, provisions, and rights than ever before, and will have to support their claims in ways that involves constant written communications and citations of Plan or policy provisions.
In the past, I used to say, “It’s not our job to do the insurance company’s job for them”, but that’s not true today. All insureds will be required to know exactly how to support and manage claims, because there is no one on the other side that knows what they’re doing either. Claims handlers basically just push pape, and do what they are told.
Insureds are in a position today of knowing what to do, what to say, and how to position their claims in support of their own disability. Although I know that money is a definite factor these days, it doesn’t make sense to engage in a process that insureds may not be fully informed about, causing more harm to their claims than good. Help may be needed.
Although I don’t write these articles to “plug” my services, what I do write about is the truth of how things are. If you’ve been on claim for more than two years, the insurance industry and processing of claims will be unrecognizable to you. I hope this article helps to put the present into perspective, and explains what you can expect to deal with in the future.
