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Articles Posted in Health Insurance

Disability insurance is a unique type of insurance that protects a person’s ability to earn a paycheck if that person experiences a serious injury or illness. Disability insurance is meant to provide employees with a way to receive a portion of their expected income if they later become unable to work. Disability insurance is often categorized as either short-term or long-term. The primary difference between short-term and long-term disability plans are the periods of time a person may receive benefits due to her inability to work. Short-term disability plans usually work in tandem with long-term disability plans. Generally, once short-term benefits are exhausted, then a long-term disability policy would become effective in an effort to continue providing an employee with income until she is able to return to work. Some long-term disability plans may last for the lifetime of the policyholder, most will usually provide coverage for approximately thirty-six (36) months.

Most employers provide some type of disability insurance coverage for their employees. It might be time to refresh your memory on what your employer provides you with specifically. In an unpublished opinion, the Ninth Circuit recently determined that an employer provided disability insurance company was within its rights to reduce an employee’s disability benefits by $800,000. The $800,000 came from a recent personal injury settlement the employee received on a completely unrelated matter. Haddad v. SMG Long Term Disability Plan, No. 16-CV-01700-WHO, 2021 WL 2187979 (E.D. Cal. May 28, 2021).

The case turned on the legal distinction between “offsets” and “exclusions” and “limitations” in regard to long-term disability plans. This marginal difference may be the difference between receiving the anticipated total value of long-term disability benefits or having that total value later diminished. Exclusions and limitations carve out areas from the scope of an insurance policy’s coverage. Offsets reduce the total amount owed for covered claims.

covid-19-and-insurance-claimsThough the COVID-19 pandemic may now be the new normal to many of us, courts are continuing to address new questions stemming from ongoing issues related to the pandemic. As businesses struggled to remain unharmed by the pandemic and protect their employees from illness, some insurers have made the task even more difficult through denials of coverage relating to COVID. A Federal Court in Virginia recently dealt with one such issue in Carilion Clinic v. American Guarantee and Liability Insurance Company.

The Plaintiff in this case, Carilion Clinic, brought suit against their insurer alleging damages for the insurer’s denial of coverage under the Plaintiff’s $1.3 billion property damage and business interruption policy, for which they paid approximately $1 million in premiums. The insurer failed to honor the terms of the policy and provide coverage after more than 10% of the Plaintiff’s employees became ill with COVID. The Plaintiffs alleged that this failure manifested in two ways, first that the insurer failed to provide coverage for property damage sustained through the spread of COVID on company property, and second for denial of coverage relating to business interruption.

Though many courts have held that damages related to COVID do not require coverage, the Court in this case stepped away from that line of thought and stated that the Plaintiff’s claims relating to business interruption warranted extended discovery, as the filing deadline resulted in a hasty discovery process and issues relating to business interruption had not been fully presented to the Court.

Health insurance companies are supposed to protect their policyholders by providing financial protection and reimbursement against losses. They collect premiums from their clients over a period of time to pay for future losses. When a person buys an insurance policy, they are entering into a contract. This contract is expected to be upheld and followed even when unexpected accidents and expenses occur. There are laws set in place to help and protect policyholders from health insurance companies when they wrongfully deny coverage to their insured. Read on to find out how you can identify the signs of wrongful treatment and how to protect yourself.

What Should Health Insurance Companies Cover

This list does not include all the possible items and instances of coverage. To see a full list of items that should be covered by your insurance company, take a further look into the details of your health insurance policy. The list below includes major services that should be covered under basic policies:

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