Texas Long Term Disability “Discretionary Clause”

Average SSD Payment

The average SSD payment in 2008 was $1,063 a month. Once you have received disability payments for two years, you automatically qualify for Medicare coverage.

Ohio, Michigan, Minnesota, Wisconsin, Indiana, Nebraska, Illinois, Missouri, the District of Columbia and Alabama face the 10 worst Social Security Disability Insurance (SSDI) hearing-level processing backlogs.

Hearings are held when an SSDI decision is appealed, many people have already waited 12 or more months following their application, denial and, for many, reconsideration. By the time they reach the hearing, it's not unusual for applicants to have waited two to four years for an SSDI decision.

The 10 states with the lowest wait times are Delaware, Maine, Texas, Louisiana, West Virginia, Utah, Massachusetts, Oklahoma, Connecticut and Hawaii.

The SSA reports the national average processing time for a hearing decision is now 442 days, down from 514 days in September 2008. The total hearings backlog has decreased by more than 71,000 cases since December 2008.

Last year, more than 2.8 million people filed SSDI applications, and the SSA projects 3.3 million will file disability claims in 2010. The SSA recently reported that the level of initial claims pending now exceeds 1 million people - nearly a 40 percent increase over the level from FY 2008.

High Rate Claim Denial in Texas

In Texas at the initial claim level (the application), SSD and SSI claimants have been denied at the rate of 61.5%.

For those who were denied and chose to file appeals, Texas claimants were again denied at an even higher rate: 84.2%.

More initial claims are denied than are approved and an astoundingly high percentage of first appeals are likewise denied.

Steps to protect your Social Security Disability, Veteran's or Pension Benefits:

Do NOT commingle Social Security and exempt benefits with nonexempt funds.

Do NOT obtain a loan or credit card from the bank where your Social Security or pension is deposited. If sued, go to court and demand proof of the debt.

If your bank account is frozen, file an exemption claim within 10 days.

IRS and SSD

The IRS can take money each month from a Social Security disability check.

The practice is part of the agency's Federal Payment Levy Program, which allows up to 15 percent of any federal payments a delinquent taxpayer receives to go directly to the IRS until their overdue taxes are paid in full.

The IRS employs an automated levy system that withholds Social Security payments to taxpayers with incomes below the poverty line. If this is happening to you ... call.

Ask for a person -- not a computer -- to provide a review. You may be classified by the agency as unable to pay.

IRS Taxpayer Advocate: 1-877-777-4778

If your reasonable expenses are more than your income you may be eligible to have an IRS levy from your bank account refunded. The IRS will have a telephone interview with you to determine your ability to pay. This includes and discussion of your assets and resources. They will then ask for your monthly expenses. Typically you will have to fax the IRS your last three months of bank statements.

While the IRS has ten days to decide on a refund they actually can and usually do act more quickly. You bank may require 72 hours to restore your funds. In reality the IRS may act more quickly than your bank.

There is a possibility that you will have a partial restoration of funds rather than a full restoration.

A restoration of funds for hardship and a classification of 'unable to pay' does not mean your debt is forgiven. You will continue to owe your debt. However, your funds for living expenses may be partially or fully restored.

Posted by admin • March 15, 2010 • Printer-friendly

Texas Asks for Halt on Discretionary Clauses, Considers Ban

Ruling Expected April 2010

See: Tx Dept. Ins.

The Texas Department of Insurance is asking all insurers writing accident, health and life policies to suspend the filing of policy forms containing discretionary clauses while it considers prohibiting their use.

The state Office of Public Insurance Counsel, a separate agency, asked Insurance Commissioner Mike Geeslin to consider a ban in October 2009. The department expects to resolve that request within 90 days of Jan. 7, 2010, TDI spokesman John Greeley said.

In 2007, California Insurance Commissioner Steve Poizner banned discretionary clause language from all disability income insurance policies in the state (BestWire, July 3, 2007). The order stemmed from a settlement with a life insurer to no longer contain the clause that gives insurers complete discretion when determining whether an injured worker is entitled to benefits.

The American Council of Life Insurers opposes the proposed Texas ban. Such clauses allow an employer-sponsored group benefit plan to use a single entity to provide efficient and effective administration, ACLI senior director and actuary Steve Clayburn said. In 2008, insurers administering employer-sponsored disability plans paid out more than $7.9 billion in long-term disability insurance claims to more that 570,000 individuals.

"Discretionary clauses do not change the terms and conditions of the ERISA plan nor do they affect the consumer protections contained in state insurance laws," he said. "Discretionary clauses have been included in disability income policies for decades -- a time in which the industry has paid out billions in disability claims."

In a letter to Geeslin, America's Health Insurance Plans Regional Director Cindy Goff said discretionary clauses protect employers and individuals by providing consistency to benefit eligibility determinations and interpretations of policy terms. "They operate to ensure that employers and consumers are afforded reliable, uniform and affordable benefits," she said.

Lee Ann Torrans
Attorney at Law
6532 LBJ Freeway
Dallas, Texas 75240

http://socialsecuritystrategy.com

ltorrans@gmail.com

214-500-5410 (cell)
214-231-2886 (E-fax)

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