DennisBeaverJuly 15, 2006 (Original publish date) • By Dennis Beaver

Chances are that you or someone you know has a Disability Insurance policy, the purpose of which is to assure a steady stream of income in the event of illness or some event that prevents going to work. These policies are sold with wonderful promises. After reading today’s story, I would like your opinion of what’s fair and if Susan and her husband Ed owe Unum Provident anything at all.

We begin in June of 2005 when Susan, a radio and television news writer, was initially diagnosed with acute and extremely painful gastritis. That’s a common problem in America’s aging population, affecting almost one third of us. She was treated with the usual medications, temporarily taken off work, placed on Disability and told to apply for supplemental payments under a Unum Provident Disability Insurance Policy provided by her employer. The payments from Unum began immediately and amounted to a whopping $23 a week!

During a routine CT Scan in July, her doctors discovered that she also had a malignant kidney tumor. This required immediate surgical removal of the kidney, and she was placed on long term State Disability in August.

The Unum claims handler told her to apply for long term disability under their policy, and she and her husband filled out the required forms, waited for months, finding themselves in a nightmare.

Privacy? What Privacy Rights?

“When Susan’s Unum Disability Insurance was first obtained through her employment, no one ever gave her a copy of the master contract or explanatory materials. No one ever explained how disability insurance works, or that Unum had a contractual right to access non-medical information, such as credit reports or employment history. We understood the Unum policy would, in conjunction with whatever State Disability paid, help us financially. As Unum requested, we told them what Susan was receiving from California State Disability, but then, after applying for compensation under the Unum long term disability insurance, one day a letter arrived with a Release of Information to sign. They wanted all of her most personal financial information,” Ed told me.

Identity theft fear

“We were afraid of releasing information that could be the basis of identity theft, and I told the claims handler that we were not going to give them access to that information. In August, 2005, the Unum claims handler sent them a letter which basically stated the following: If the information requested is not provided in 45 days, no further consideration will be given to your claim and we will deny or stop payments.”

Her husband told the Unum claim handler that they could, “simply forget the whole thing, drop the case as there was no way this sensitive information would be released.” With the August letter in hand, the couple assumed the claim would be closed.

However, according to supervisors I spoke with at Unum, the policy was changed, and the couple was free to simply cross out the non-medical information on the release form. But the claims handler never told them that!

Months went by and then money appeared, “accompanied by a very nice letter, in a far different tone from other letters, stating that your long term disability had been approved for renal cell carcinoma.”

A total of $9,800 was received over several months, to the surprise of Susan and her husband. “We just assumed that someone at Unum Provident had taken another look at the file and realized that we were owed the money,” Ed told me. But then, in the month of June, 2006, another letter arrived. This one wasn’t so nice.

“They were asking us to pay them back almost all the money we had received! Their reasoning was that as we had received State Disability, we could only keep $1,000 of the Unum payments,” Susan stated.

Are you guys serious?

When this situation was brought to my attention, with Ed in my office on a speaker phone, I called Unum’s claim handler and realized that his elevator did not quite seem to go to the top floor. “Why did you pay them anything at all, if now you contend they weren’t owed any real money by Unum?” I asked: His answer: Gee I made a mistake. Why did you continue handling the claim in the first place, after your August, 2005 letter threatening to close the case? His answer: Well, I thought I could process it with medical records alone.

Why didn’t you inform them of that? “I forgot.” As Susan’s initial medical problem was gastritis, suddenly I felt an attack coming on myself after speaking with the guy and sought out supervisors, looking for signs of intelligence in the Unum Provident universe. I am still looking.

The Issues

The real questions? Did Unum overpay the claim? If so, should Susan and Ed have been aware of the overpayment, or did they have the right to accept the money? Even if, technically, there was an overpayment, is it fair for Unum to pursue the couple, or should they look to their own incompetent employee for reimbursement?

Both Ed and Susan spent literally days – losing a great deal of time from work – in dealing with Unum. They never knew that the money received should not have been paid, but feel a reduction is appropriate. One of Unum’s less than charming collectors threatened to transfer the account to a collection agency, and totally refused to negotiate, or accept any element of blame. That’s when I contacted Unum’s Corporate Communication Spokesperson, Ms. M.C. Guenther. She promised to look into the matter and get back to me, which she did in less than 24 hours promising a full investigation, and I will let you know what they tell me.

Unum Provident has been in the headlines a lot recently. You can do a Google search and spend hours reading about the claims they deny, and resulting enormous judgments against this company.

Felt on trial

“I felt that I was on trial in dealing with Unum, instead of a patient wanting to get back to work and facing the realities of cancer. Their attitude was harsh, and it seemed as if they were trying to catch us in some lie, or claim fraud. We feel that they are trying to find any way to wiggle out of their legal and contractual obligations,” Susan concluded.

What do you think is a fair resolution? Even if there was a technical overpayment, should the couple be required to pay them back? Or should Unum leave them alone?

Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.