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LTD Buy Outs

A long term disability (“LTD”) benefit “buyout” is where the insurance company pays a lump sum instead of continuing to make monthly payments in the future.  Should you accept a buy out?  A buy out will always be less than the possible total amount of future benefits remaining, for which there are valid reasons.

The insurer will continue to reassess the claim.  The insurer may believe that it is possible for your condition to improve, at which point your benefits will be terminated.  That is why insurers do surveillance, and pay “IME” doctors thousands of dollars to opine that the claimant has improved.  The insurer will also want a discount to reflect the chance that you might die from some unrelated cause.

I typically advise my clients that their only concern should be if the buy out makes financial sense – could they invest the lump sum to earn approximately what the monthly payouts would equal. To determine if a buy out makes sense, you should always discuss it with your financial advisor, who can evaluate the present value formula that the insurer is using.  To oversimplify, if you win a lottery, you can choose a lump sum or annual installment payments.  The former is always smaller than the total amount of the jackpot.

The key to analyzing the present value is the “discount rate,” which is an interest rate.  A lottery uses a discount rate to reflect the annual rate of growth of the invested lump sum for a typical individual, which is what the present value of a lump sum is supposed to do.  Disability insurers knowingly misuse the term present value.  Instead of using an interest rate that reflects the expected rate of investment growth, the disability insurer uses the corporate bond rate because that supposedly reflects the cost to them of borrowing to pay for the lump sum.  However, that has nothing to do with the present value of a lump sum to you; only the cost of the lump sum to them.

Most of the time, we advise claimants that buy outs are offering far too little relative to the overall claim.  We negotiated a buy out for a Unum client today.  The claimant understood that there was a significant discount for Unum.  However, the claimant already had to relocate from Queens to Upstate New York where the cost of living is lower.  After discussing the buy out with financial advisors, despite the discount, the claimant felt she had to accept the buy out due to financial stress.

Covid Long Haulers

As if it wasn’t hard enough to get approved for Social Security Disability (“SSD”), Covid has complicated the matter even more.  Some people who have had Covid have become “long haulers.”  They have experienced lingering medical issues, and new medical issues, which have left them unable to return to work.  While they can apply for SSD, the Social Security Administration (“SSA”) is not prepared for how to treat these cases, and will most likely deny them,erroneously.

How many more of our fellow citizens are going to be subjected to the uneducated decisions of the “analysts” at the State agency who review their claims?  These “analysts” are civil service workers, not doctors or lawyers, who most of the time are ill prepared for what they are doing, and are not really interested in trying.  Under the new acting Commissioner of the SSA, we can only hope that the SSA trains their employees about how to handle long haulers’ claims, and that they do not automatically deny them or make them wait years for a decision.

Remand for Benefits

There are three possible outcomes when appealing a Social Security Disability (“SSD”) case in Federal court:  the appeal can be denied, remanded for further proceedings, or approved and remanded for a calculation of benefits.  The third possibility is the best for a claimant, but is also the rarest, occurring only 2% of the time.

Unfortunately, more claimants are having to litigate in order to receive SSD benefits.  Social Security has precipitously reduced the percentage of cases that it approves and remands at the Appeals Council since 2016.  It seems that Social Security made the cynical decision that it is a win-win for it to reject more cases at the Appeals Council.

Social Security calculated that many claimants will not go to court, and if they do, then the court will decide if a remand is needed.  Basically, Social Security has foisted its obligation to determine if a remand is needed onto the courts.  Social Security anticipates that the courts will respond to the increased SSD caseload by denying more cases in order to discourage appeals.  At worst, a remand significantly delays the time when Social Security has to pay benefits, and Social Security does not pay interest on past due benefits.

We represent a 36 year old catering manager from Mineola with multiple impairments, including pseudotumor cerebri, which causes headaches.  Administrative Law Judge (“ALJ”) Roxanne Fuller denied the case, which the Appeals Council rubber stamped.  U.S. District Court Judge Brian Cogan reversed and remanded the case today for a calculation of benefits.

Judge Cogan rejected the ALJ’s argument that because the claimant’s headaches were not disabling because she did not experience them during all her examinations.  Since the record was sufficiently developed, and no medical opinion contradicted the opinions of the treating physicians who concluded the claimant cannot work on a regular basis, Judge Cogan held that a calculation of benefits was the proper remedy.

Our client cannot express her gratitude enough, for our handling and outcome of her claim.   She had originally applied on her own and realized that filing for SSD was an arduous and complex matter.   She was referred to us by an old client of ours, who highly recommended calling us, based on their own positive experience, knowing that we specialize in disability claims, and are able to litigate claims in Federal court when necessary.  Our office offers free phone consultations and have offices conveniently located on Long Island in Nassau and Suffolk counties.

Prostate Cancer

We represent a claimant with complications from prostate surgery who was approved today for Social Security Disability (“SSD”) benefits without even having to attend a hearing with an administrative law judge (“ALJ”).  The ALJ not only found that urinary impairments and fatigue prevented the claimant from performing his past work, but also any other work as well.

Transferability means applying work skills that the person has demonstrated in vocationally relevant past jobs to meet the requirements of other skilled or semi-skilled jobs.  The ALJ concluded that any skills the claimant acquired from his past work were not transferable to any other jobs; that any other occupation would require too much vocational adjustment in terms of tools, work processes, work settings or the industry in order for any acquired skills to be transferable.

Vocational considerations take on added significance when the impairments at issue are non-exertional.  Therefore, we retained and worked with a vocational expert (“VE”) on this matter.  Without the VE, it is unlikely that the claimant’s SSD application would have been approved without a hearing.

More Good News?

SS Commissioner Fired

COVID Long-Haulers

COVID has affected the lives of millions of people. While some people who have had COVID recover after two weeks, and return to their normal life, there are many people who are left with long lasting, even permanent, medical conditions that they did not have before contracting COVID. These people are referred to as “long-haulers”. One of the many problems these people face is their inability to return to work, for an unknown period of time, or permanently. They face the difficult challenge of applying for disability, whether through Social Security, or from a group or private insurance policy, neither of which is prepared for “long-hauler” claims. But they need to prepare quickly, because there are going to be a lot of people left disabled from this virus, and they will need disability payments to survive.

SDNY Affirms SSD Win

Judge Ronnie Abrams rejected the decision of Administrative Law Judge (“ALJ”) John Carlton that our client from the Bronx with spinal impairments was not disabled. The decision is of significant importance because Judge Abrams clarified that “the law that an ALJ may not substitute his own medical opinion for that of a physician” even after the treating physician rule was decodified. Thus, an ALJ cannot base a residual functional capacity (“RFC”) assessment on his own interpretation of the medical evidence. In order for an RFC to be supported by substantial evidence it must be based on a physician’s opinion.

It is vital to make sure that the disability attorney who will represent you when applying for Social Security Disability will also fight for you in Federal Court if necessary. Not many disability attorneys are qualified and willing to litigate their clients’ claims if they have to go to Federal Court, and they will refer you to a litigation attorney. We can and do litigate our clients claims. Please feel free to call our office for a free phone consultation. Our offices are located on Long Island in both Nassau and Suffolk counties.