Individuals applying for long-term disability insurance (LTD) benefits are likely to encounter a number of obstacles in getting their claims approved. LTD rules for prior medical conditions can be among the most frustrating, as well as the most common, examples. Pre-existing conditions’ long-term disability eligibility for coverage will depend on the terms of the specific policy, but most disability insurance companies will conduct some type of pre-existing conditions and LTD eligibility overview before approving a claim. A comprehensive guide to pre-existing issues in LTD may give you a useful starting point, but because approval of your LTD claim ultimately depends on the provisions of your specific policy, you may also want to consider working through the policy documents with the assistance of a legal professional who is accustomed to handling disability insurance cases.
Pre-Existing Conditions and LTD Eligibility Overview: Can Insurance Deny You Based on Pre-Existing Conditions?
Many insurance policies contain provisions allowing the insurance company to deny claims if the condition that leads to the claim meets the policy’s definition for a “pre-existing” condition. Exclusions for pre-existing conditions are widespread in disability insurance. They also remain common in some types of health insurance plans, although certain provisions of the Affordable Care Act (ACA) have made it more difficult to deny coverage for pre-existing conditions under policies sold on the Healthcare Marketplace and some employer-sponsored health insurance policies.
Health insurance coverage for pre-existing conditions can have some important implications for long-term disability applications, as LTD rules for prior medical conditions generally allow long-term disability insurance companies to review a patient’s history of health insurance claims to look for evidence that the individual sought diagnosis or treatment for the condition that has led to his or her disability within the “look-back” window. The length of the look-back window is established in the terms of the LTD policy, but in a comprehensive guide to pre-existing issues in LTD you may see periods of one, two, or five years mentioned.
What Qualifies as a Pre-Existing Medical Condition?
“Pre-existing condition” may be defined somewhat differently, depending on the type of insurance making the assessment. The terms of the particular policy will specify what exclusions the policy makes for pre-existing conditions and how those are defined, but generally life insurance policies are looking for conditions that increase an individual’s risk of early death, while health insurance companies offering policies not subject to the rules prohibiting exclusions for pre-existing conditions under the ACA or the somewhat narrower provisions of the Health Insurance Portability and Accountability Act (HIPAA). Pre-existing conditions and LTD eligibility overviews tend to employ a “look-back” period, during which any medical care the covered person sought may be reviewed to determine if the medical diagnosis or treatment might have a connection to the condition that has more recently caused the individual to file a long-term disability claim.
What Is Considered a Pre-Existing Condition for Health Insurance?
Today, most health insurance policies purchased through the federal Healthcare Marketplace or obtained through employers are required to cover pre-existing conditions under the ACA. Private health insurance plans not purchased through one of these methods are still generally subject to an older set of provisions established in the 1990s under HIPAA.
The “portability” provisions under HIPAA established that an individual enrolling in a new health insurance policy could not be denied coverage for pre-existing conditions as long as the individual had not gone uninsured for more than a set time period prior to enrolling in the policy. Typically this window of eligibility was about 60 days, and one of its major advantages was that individuals had some flexibility to change health insurance plans without “resetting the clock” with respect to their pre-existing conditions. The new policy could exclude specific conditions from coverage on other grounds, but not simply on the basis that the individual had the condition prior to enrolling in the policy.
How To Get Around Pre-Existing Conditions in Health Insurance?
For most people purchasing health insurance policies through the federal Marketplace today, or obtaining health care coverage through employers who are subject to ACA regulations, it is no longer necessary to go to great lengths to secure coverage for pre-existing conditions. Because many people have health insurance coverage through their jobs and applying for disability generally means losing that employer-sponsored health insurance, however, there are a few points you may wish to keep in mind as you make the transition to long-term disability.
- Qualifying Life Events (QLEs): While most changes in health insurance do take place during “open enrollment” periods typically scheduled in the fall, Healthcare Marketplace enrollment and some private insurance plans allow individuals to enroll at other times throughout the year if they have had a recent Qualifying Life Event (QLE). Losing health insurance through your job is generally considered a QLE, and what it may qualify you for is a Special Enrollment Period (SEP). An SEP simply means that you can enroll right away, without needing to wait for the next open enrollment.
- Open enrollment: The Healthcare Marketplace holds an open enrollment period each year, generally starting around the beginning of November. Insurance companies offering plans that comply with the ACA also frequently allow individuals to enroll through their systems directly during this time period. Some states operate their own healthcare exchanges and may have open enrollment dates that vary slightly from the federal system, and Medicare has its own open enrollment period for those who are old enough to qualify. For those who leave work late in the year, the state and national open enrollment periods may be realistic options for finding new health insurance plans, but be sure to keep an eye on the dates that apply in your area.
- COBRA continuation of coverage: The Consolidated Omnibus Budget Reconciliation Act (COBRA) established provisions that allow individuals who lose their job-based health insurance to purchase “continuation” policies that temporarily extend the same coverage they had under their employer-sponsored health insurance plans. The enrollment window for these policies tends to be relatively short, so if you think you want to use a COBRA continuity of coverage policy it is important to communicate with the benefits specialist at your employer to identify your options and begin the enrollment process as soon as you know this is the direction you want to take. The advantage of these continuation of coverage policies is that they can extend the window of time you have to search for an appropriate alternative to the employer-sponsored policy you are leaving. Keep in mind that you will have to assume the full cost of policy premiums that were previously covered by your employer, usually with an added administrative fee of up to 2% of the premium total.
Filing a successful long-term disability claim generally requires a great deal of medical documentation, so maintaining active health insurance coverage as you transition to long-term disability is often crucial to making sure you have access to the medical assessments you may need throughout the process.
Does Long-Term Disability Cover Pre-Existing Conditions?
The protections against denial of coverage for pre-existing conditions in long-term disability are not nearly as broad as those that apply to health insurance. LTD rules for prior medical conditions differ from one policy to another, but any comprehensive guide to pre-existing issues in LTD needs to address one common source of confusion: In relation to pre-existing conditions, long-term disability eligibility may be determined along two distinct fronts.
Pre-Existing Conditions, Long-Term Disability Eligibility, and Enrollment: Denial of Coverage
An insurance company may sometimes refuse an individual’s application to enroll in a disability insurance plan on the basis of the person’s risk factors. Risk factors could include not just pre-existing conditions, which are often excluded from coverage under policy terms, but also lifestyle factors that the insurance company’s actuaries have identified as associated with an increase in LTD claims. Denial of initial enrollment may be more likely for policies purchased individually, since the group plans negotiated between insurance companies and employers often contain provisions that entitle anyone working for the employer to coverage. Alternatively and perhaps more frequently, an insurance company may approve an individual for enrollment but charge a higher premium based on the same type of risk assessment that might otherwise lead to denial of coverage for the individual.
Pre-Existing Conditions and LTD Eligibility Overview: Denial of Claims
Denials of LTD benefit claims are much more common than denials of initial enrollment. With a claim denial, there is no implication that the individual filing the claim is not covered by the LTD policy. Rather, the denial is made on the basis that the specific circumstances of the claim do not qualify for LTD benefits. Often pre-existing conditions’ long-term disability eligibility is specifically excluded by provisions in the insurance policy. The same individual might be eligible for LTD benefits for a number of other conditions, but LTD rules for prior medical conditions can allow the insurance company to deny coverage not just for disability related to a condition that was diagnosed prior to the person’s enrollment in the policy, but for any condition that an applicant treated for during the policy’s specified look back period that the company’s claim reviewers can connect to symptoms and conditions that are disabling the LTD applicant as part of the review process for long-term disability claims.
Review Your Policy Terms Carefully
Although most long-term disability insurance companies do include broad provisions for the exclusion of pre-existing conditions, LTD rules for prior medical conditions may contain certain exceptions. The length of the “look-back” period the long-term disability company uses in its pre-existing conditions and LTD eligibility overview may make a difference, as conditions that have been well-managed since long before you enrolled in the policy may not always count against you, especially if the conditions themselves are not common causes of disability claims.
Even the most comprehensive guide to pre-existing issues in LTD will not be able to account for all variables potentially introduced by the specific wording of the provisions regarding pre-existing conditions in the terms of an individual policy. These pre-existing conditions long-term disability eligibility provisions will be one of the most important factors in determining whether your disability is likely to be excluded from coverage under the terms of the policy. Policy documents can be difficult to interpret, particularly since most people have very little personal experience in dealing with the type of language commonly employed in policy terms. Always review your own policy terms carefully, and consider consulting with a disability insurance attorney to gain perspective on what those terms may mean for your case.
