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When dentists file total disability claims, insurance companies will often ask them for a complete financial disclosure. A complete financial disclosure contains more information than even the IRS is entitled to. In the case of total disability, this request may be improper. What follows are tips on how to get through this process as painlessly as possible.
Except for an IRS audit, few requests for information are as unpleasant as a letter from the disability insurance company asking for complete financial disclosure.
If the disability insurance payments are based on practice income, in the case of a claim for partial disability or residual disability benefits, the request for financial disclosure does not seem out of order. How else will the disability insurance company determine the correct payment amount? But this isn’t usually the case. Where a claim is for total disability, however, it may be that the request for such financial disclosure is both onerous and improper.
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Most disability insurance policies sold to dental professionals contain clear language about the amount of monthly benefits to be paid, with no reference to the financial statements of the dentist personally or professionally. So why are the insurance companies asking for documentation of your income, details of your expenses, and more information than the IRS is entitled to?
Financial records are requested to evaluate income, assets and earnings. Expect them to be reviewed under a high-definition microscope. And for a partial or residual disability, expect to provide monthly financial support for your claim.
This is an intrusive process. It is also a strategic move to reveal how hard the dentist is willing to push back. The presence of an experienced disability attorney at this stage changes the dynamic. The representatives from the insurance company are now faced with a professional who is going to challenge requests that a dentist is not legally compelled to fulfill. That doesn’t mean the onerous requests disappear, but they become part of the negotiations for getting the claim resolved.
If you have filed a claim and the insurance company has requested a complete set of your financial records, here are steps you can take to protect yourself:
Find your original disability insurance contract and read it. Locate the section that discusses financial disclosure. This is often governed under a section of the policy called Proof of Loss. If there’s language in there you don’t understand or that doesn’t make sense to you, call an experienced disability insurance law attorney. You may have to provide some records — but it is unlikely that you have to provide everything.
Determine what information is truly appropriate and/or necessary for the insurer to consider your claim properly. Do not permit an insurer to brow beat or intimidate you into disclosing more information than would be appropriate.
You can contact the insurance company directly and ask them to provide their request in writing, and ask them to show you specifically where that language appears in your contract. Don’t expect them to be accurate or comply with this request.
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Document every request and every telephone conversation with insurance company representatives. Be aware of this tactic: A conversation takes place with the insurance company, and a letter describing the conversation is sent, but the description of the conversation does not always reflect the conversation accurately. Included in the letter is often a phrase that if you do not respond to the letter, you have agreed to the statements therein.
All too often, people find the process so unpleasant that those letters go unopened, and the insurance company deems the claimant to have agreed to its version of the conversation.
If you are required to provide practice information, make sure that your office records are up to date and complete. Check with your CPA, bookkeeping service or comptroller to ensure that the records are fully compliant with local, state and IRS requirements. If there are any questions regarding tax issues, the insurance company may not care — but some of their own documentation searches could set up a red flag for local, state or federal agencies. Be prepared to back up your methods of recordkeeping.
Records from other sources of income may also be requested. The disability insurance company is seeking information that would support a reduction in benefits because income from activities that are not part of the “own occupation.” If your practice offers ancillary services or products that could be considered outside of the scope of a regular dental practice, the insurance company will seek to deduct that income from your dental income. In addition, the insurance company will use that information to prove that you are able to work in that other income stream even if you cannot perform the material tasks necessary to be a dentist.
Be aware that dentist’s disability claims are frequently denied because, frankly, they are expensive for the insurance company’s bottom line.
Jason A. Newfield, Esq., is a founding partner at Frankel & Newfield, a national disability law firm, where he aggressively represents claimants in long term disability insurance, ERISA, and other insurance claims and litigation. He holds an AV® Preeminent Peer Review from Martindale-Hubbell and has been named to the Super Lawyer New York Metro list from 2013 — 2016. Mr. Newfield is frequently invited to speak before bar associations, medical organizations and other trade organizations regarding disability claims and has published numerous articles on Disability Insurance. He is a member of the American Conference Institute, regularly presenting to attorneys and claims personnel at national conferences on disability litigation.