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Kenneth Nibali, former top Social Security Adminstrator of the Social Security disabilty system, is the plaintiff’s expert in a whistleblower’s suit that has just been filed in Federal Court in Boston. In a must read article in the New York Times on April 1, 2008, Mr. Nibali pointed out that long term disability carriers like Cigna and UNUM, are making their policy holders who are disabled apply for Social Securty disability, even if the claim does not meet the standard for Social Security disabilit benefits. That is fraud!
As a result, it is estimated that over 450,000 applications filed by long term disability policy holders – 18% of the 2.5 million Social Security disability applications filed annually – are not entitled to Social Security Disability benefits. That bogs the Social Security system down causing a delay for legitimate claims.
It also costs the Social Security Administration $4,759.00 to process a case through the first 3 levels of claim review to a hearing in front of an Administrative Law Judge.
While most ERISA policies require a disabled policy holder to apply for Social Security, long term disability carriers do have a reasonably good idea which cases are not going to meet Social Security disability standards. They could weed these cases out and not force denied policy holders to appeal and appeal their Social Security denials.
Weeding out these cases would help reduce the huge backlog that exists and would save millions and millions of our taxpayer money. Money that could be used to streamline the Social Security disability process and hire staff to process Social Security disability claims.
Wouldn’t it be a novel idea if long term disability carriers, who force a policy holder to apply for Social Security over and over, repay the Social Security system the $4,759.00 it costs to process the case through a Social Security hearing in front of the Administrative Law Judge if the Judge denies the claim.
Think of it as a user’s fee the long term disability carrier would pay for clogging the system with baseless claims!