Everything You Need to Know about Disability Claims

3 minutes

Revised December 10, 2024

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).

2. 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.