ERISA Long Term Disability: Is the "Risk of Relapse" a Disability?

A recent First Circuit Court of Appeals decision examined whether the risk of relapse by a long term disability claimant, who is addicted to drugs, constitutes  a disability.  In essence, the question present before the First Circuit in Colby v. Union Security Insurance Co. was whether the risk of substance dependence "can swell to so significant level" as to constitute a disability in the same manner that risk into cardiac arrest or risk of orthopedic complications can constitute a disability.

The Court looked at whether the claimant could safely return to her material duties of her regular occupation as an anesthesia doctor once she had successfully completed a drug rehab program.  The Court found that "categorically  excluding risk of relapse as a source of disability is simply unreasonable".  Consequently, it found that the insurance company abused its discretion in denying the claimant's case by not taking into consideration her risk of relapse.

This appellate decision is directly opposite to a decision issued about five years ago by the Fourth Circuit, which held --in an almost identical case-- that not considering risk of relapse by the plan administrator was not an abuse of discretion.  See Stanford v. Continental Casualty Company.   

Given this clear split between the First and Fourth Circuit, I anticipate that in the upcoming months plan administrators, throughout the country, will be amending plan documents to address this particular issue.  Expect new language in the plans specifically excluding the risk of relapse as a valid claim for disability.

Repercussions of the Binder & Binder Bankruptcy

Binder & Binder one of the Nation's largest, and probably the best known, Social Security Disability law firms has filed for bankruptcy.  The firm became known for their tacky T.V. commercials showing attorney Charles Binder wearing a cowboy hat.

The firm's slogan: "We'll deal with the government.  You have enough to worry about."  is well known by those who spend a good part of the day watching day-time television.  Binder & Binder spends approximately $20 million a year in advertising alone.

Now, it is widely rumored that Binder & Binder is pulling all their T.V. ads off the air.  Binder has also announced that it will be closing offices in several cities through out the nation, including Hartford, in an effort to reduce costs.

Over the past two to three years, Binder's exorbitant budget and heavy caseload was used by the critics of the Social Security Disability programs to wrongly allege that the system was being overly generous to claimants.  Such criticism lacked basis.  In fact, Social Security Disability Law Firms have always had to work with a very small margin of profit.  Binder & Binder's bankruptcy debunks the wrong notion the lawyers are getting rich out of the Social Security Trust Fund.  Moreover, all well informed disability lawyers have known that the boom in SSDI applications has been over for quite some time.  (The boom probably occurred from 2010 to 2011.)  As I have explained in previous posts, the boom was the result of the Nation's demographics, not of a system that was overly generous to claimants.  Unfortunately, lousy politicians in Washington don't want to do a serious analysis of Social Security's problems.  They act as if the Nation's demographics had not changed.  Instead, they find it easier to play the blame game and portray disability lawyers as the cause of the crisis.     

Fraudulent Tax Preparers and Social Security Disability

Lately, I have seen a lot of Social Security Disability claimants get in trouble because they have reported self employment income to the IRS in order to receive a refund under the Earned Income Tax Credit. Unfortunately, in many instances, the claimant never really had any self employment income and the only purpose for falsely reporting this income was to get a refund.  Beware! Those who engage in this practice are committing tax fraud!  

In addition, falsely reporting self employment income will kill your chances of winning your Social Security Disability case.  A person who is self employed will, in all likelihood, be found not to be disabled.  Moreover, a person who has made a fraudulent tax return, is not going to be believed at all by a judge.  If a claimant lied in his tax return, why wouldn't he or she also lie in her SSD application? 

Through out the entire Social Security Disability process, is always good to keep in mind the fact that Uncle Sam knows a lot more about you than you think.  Please remember that, you can't get away with telling one thing to the IRS and then telling something else to the SSA.

I suspect that tax preparers are largely responsible for the large number of fraudulent tax returns seeking an earned income tax credit.  The tax preparers that we frequently see aggressively advertising in the inner city, solicit low income people and lead them to believe that there will be no consequences to filing a false tax return.  In many instances, they convince disabled individuals who have been waiting for a long time for their Social Security Disability hearing and are desperate for money.  This is truly unfortunate.  More needs to be done to educate the public, --particularly those who are disabled--, about the consequences of falsely reporting income in order to get a refund.  It would also be ideal if the government took a more aggressive stand in investigating the corrupt practices of tax preparers who induce low income individuals to engage in this practice.    

Nazis Can't Collect Social Security... Anymore

Did you know that, Jakob Denzinger, a 90 year former Auschwitz guard who later became an American citizen, collects approximately $1,500 per month in Social Security payments. Denzinger has renounced his American citizenship and no longer lives in the U.S.  However, he still gets his monthly check.
After it was discovered this past October that dozens of Nazis who have been forced out of the United States are still collecting Social Security, Congress unanimously passed a bill a few weeks ago terminating benefits for these war criminals. 
Even though these Nazis had lost their U.S. Citizenship, under current law benefits can not be stopped.  In order to be able to stop benefits, a higher threshold is required: there must be a final order of deportation against the Social Security recipient.  Now, if the bill passed by Congress becomes law, benefits would be stopped immediately.
According to Forbes magazine, Social Security payments to Nazis could have reached millions.  It is estimated that as of 1999 at least $1.5 million in benefits had been paid.  The lighter side of this story is that at least members of Congress were finally able to unanimously agree on a piece of legislation related to Social Security.      
Since we all need some humor to get through the Social Security Disability process, here is a report from Stephen Colbert on this subject: 

The Colbert Report
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Lesbian Widow Sues Social Security

A lesbian widow has a filed a complaint in the Federal District Court in Rhode Island alleging that the SSA illegally denied her survivor benefits.

Deborah Tevyaw married Patricia Baker in Massachusetts in 2005.  Back then, same sex marriage wasn't  legal in Rhode Island.  Patricia died of lung cancer in August 2011.  

After DOMA was struck down by the U.S. Supreme Court in 2013, the Social Security Administration continued to deny Deborah Tevyaw's claim for survivor's benefits.  The SSA alleges that she should be denied benefits because RI would not have recognized their marriage at the time of Patricia's death.    

The Social Security Administration's actions in this case are shocking given that back in June 2013, the U.S. Supreme Court in United States v. Windsor struck down the Defense of Marriage Act: a law that defined marriage as a Union between a man and a woman.  In response to pressure from the media, the SSA has responded with a carefully worded statement essentially saying that it is reviewing its policy with the Department of Justice.  In the meantime, Deborah Tevyaw will have to wait --like some many other claimants who are treated unfairly-- and live on a monthly income of $732 a month.

Get a Copy of Your Long Term Disability Plan Early... or Find Out Whether You Have LTD

If you suffer from a chronic condition or illness, preparing to file for disability benefits is something that you should start thinking about very early on.  Everyone should try to work as long as possible. However, it is better to be safe than sorry.  Don't be passive about your situation.  Get educated as much as possible, and learn what benefits will be available to you in the event that  you can no longer work.

Very often I get calls from prospective clients who are thinking about filing for Social Security Disability.  During my conversations with them, I notice that many persons out there don't know whether or not they have a private disability plan provided by their employer.  Unfortunately, only 30% of employees in the private sector have long term disability insurance.

If you have severe health problems or suffer from a condition that might prevent you from working, it is a good idea to contact your human resources department to determine whether or not you are covered by a long term disability insurance policy.  If you are covered, then you should request from HR a copy of your long term disability plan and the plan summary.  The long term disability plan administrator is required by federal law to provide you with a copy of the plan.  

Once you obtain a copy of the plan and of the plan summary, you should spend sometime reading it and learning how it works.  Don't file for short term or long term disability without first reviewing these documents carefully.  It is also advisable to contact a long term disability lawyer who can sit with you and with a copy of the plan and explain to you how its provisions apply to your particular situation. 

Jail Time and Social Security Disability

Felony convictions can affect your Social Security Disability benefits.  In most instances, a felony will not automatically disqualify you from applying but, serious criminal offenses can result in a suspension of benefits or in loosing your claim.  Here are some examples on how spending time in jail and/or being convicted of a felony can affect your benefits:

• You will be denied benefits if the agency finds that your disability was caused or it was made worse because you carried out a criminal offense classified as a felony.  (For example, you cannot claim that you are disabled because you were shot while robbing a bank.)  Moreover, you do not have a valid claim if you allege that your disability arose or became worse while you were imprisoned.  (I get calls on this one all the time.  I get inquiries like: "I suffer from PTSD because I was incarcerated".  Forget it.  I can't help anyone with that type of claim.  It just doesn't work.)
• If you are receiving SSD, your benefits will stop 30 days after the commencement of an incarceration.  You get free food and shelter while in prison.  Don't expect other programs such as SSDI or SSI to pick up the bill.  Your benefits will be reinstated if you get out of jail before a period of 12 months.  However, if you spend more than 12 months in jail, you will have to re-apply and go through the whole application process all over again.      

My advise to all claimants is to stay out of trouble.  I have successfully represented claimants whose benefits have been terminated because they were incarcerated.  However, I must be frank and state clearly that, in most circumstances, I cannot take these type of cases.  I only get paid if I win and these cases are a huge risk for any Social Security Disability Lawyer.  

Finally, if you were caught dealing drugs or committing an economic crime while receiving SSI or SSDI, you probably will not have much of my sympathy.  (And I'm probably going to yell at you when I take your call!)  I take pride in what I do and feel offended when I see that money that is designated for those who are severely disabled is being wasted or misused.