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Everything You Need to Know about Disability Claims

Everything You Need to Know About Disability Claims

3 minutes

Revised October 7, 2021

The disability claims process is a lot more complicated than just the employer/employee submitting a claim application and then waiting for an approval/denial decision.

Here’s an overview of how the claim process works, and why your claim might be taking longer to process.


How Claims Work

Getting insight into how claim decisions are made can clarify why the process can be quick for some claims and slower for others. Check out the flowchart below to see what happens during the disability claim process.

Two Reasons Why Your Claim May be Taking Longer than Anticipated

  1. Incomplete Claim
    To start the claim determination process, the insurance carrier must have a complete claim. Since each claim is unique, what constitutes a complete claim varies from one case to another.

Let’s start with the basics: the claim application is the first step toward a complete claim. The claim application form consists of three sections: the Employer, Employee, and Physician Statement. Each form needs to be completed in full by the appropriate party and submitted to the insurance carrier.

Important! The claim is considered pending until the insurance carrier receives all three parts of the application. The employee and employer will receive correspondence advising which forms, if any, are still missing. That means no work is being done on the claim until the claim is complete.

Based upon the paperwork submitted, the claims examiner performs an initial claim review. During this review, the claims examiner evaluates the claim application and submitted medical records and decides if it is enough to substantiate the claim.

Medical records are required on many claims, and it's recommended that records be submitted along with the initial application. Insurance carriers may be able to request medical records on an employee’s behalf but note that this will delay the processing of the claim. If some but not all records are released, the carrier may not be able to do a complete review, and this could cause the claim to be pending until all pertinent medical records are received.

Once the review is complete, the claims examiner will determine if the claim is approved or denied. If the claim is approved, an approval letter will be sent to the employee and a copy will be sent to the employer. If the claim is to be denied, denial letters will be sent out to the employee and employer. Both letters are distinct. The employee’s letter will explain why the claim was denied and information on how to appeal a claim. The employer's letter will be more generic in nature regarding the claim being denied (for privacy purposes).

  1. Inaccurate Expectations of Turn-Around Time
    Some carriers may have a stated turn-around time for claim processing, but this figure is often mistaken for the total amount of time a claim will take. The stated time is generally how long it takes the carrier to complete the claim determination once the claim is considered complete. As we learned above, the claim is not complete until all requested forms, records, and other information is received by the carrier.

Claim payments are issued or scheduled immediately upon approval. The time frame for approval may be delayed should the carrier determine that additional information is needed to support the disability (medical records, vocational information, eligibility confirmation, etc.) and that is all dependent upon the unique circumstances of each claim.

Struggling with an employee's disability claim? Download our Disability Claims Checklist to help guide you through the process.Click to Download FREE Disability Claims Checklist for Employers

National Insurance Services is not a law firm and no opinion, suggestion, or recommendation of the firm or its employees shall constitute legal advice. Readers are advised to consult with their own attorney for a determination of their legal rights, responsibilities and liabilities, including the interpretation of any statute or regulation, or its application to the readers’ business activities.

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Catie Anderson

Catie Anderson

Catie Anderson believes in the importance of service, volunteerism and community. After college, she joined AmeriCorps VISTA (Volunteers in Service to America), a national service program designed to fight poverty, where she coordinated urban after-school programs and developed learning partnerships. Joining the NIS team was an easy decision for Catie, because the core NIS values so closely match her own. Her experience in customer service has taught her to approach every day with a positive attitude and put her best effort into her work. She says, “Clients can be confident in the fact that I am working hard to make sure they have what they need and consistently receive a high level of service”. As Senior Customer Service Manager, Catie oversees the activities of the service representatives, ensures quality and timely customer service to clients and provides technical and administrative support to NIS account reps, sales reps, and regional vice presidents. Catie is a licensed insurance agent with a Group Benefits Disability Specialist (GBDS) designation.