Special Topics in Disability Law: Long-Term Disability Appeals and Working While Receiving Benefits

Transcription

1 Special Topics in Disability Law: Long-Term Disability Appeals and Working While Receiving Benefits Cosponsored by the Disability Law Section Thursday, October 23, a.m. Noon Oregon State Bar Center Tigard, Oregon 2 General CLE or Access to Justice credits

2 SPECIAL TOPICS IN DISABILITY LAW: LONG-TERM DISABILITY APPEALS AND WORKING WHILE RECEIVING BENEFITS SECTION PLANNERS Cheryl Coon, Swanson Thomas Coon & Newton, Portland Micky Logan, Oregon State Hospital, Salem OREGON STATE BAR DISABILITY LAW SECTION EXECUTIVE COMMITTEE Beth Englander, Chair Heidi von Ravensberg, Past Chair Amrit K. Sidhu, Treasurer Micky Feusse Logan, Secretary Cheryl F. Coon Emily Teplin Fox Lin J. Hendler Kathryn L. Kammer Anne Marie King The materials and forms in this manual are published by the Oregon State Bar exclusively for the use of attorneys. Neither the Oregon State Bar nor the contributors make either express or implied warranties in regard to the use of the materials and/or forms. Each attorney must depend on his or her own knowledge of the law and expertise in the use or modification of these materials. Copyright 2014 OREGON STATE BAR SW Upper Boones Ferry Road P.O. Box Tigard, OR Special Topics in Disability Law: Long-Term Disability Appeals and Working While Receiving Benefits ii

3 TABLE OF CONTENTS 1. An Introduction to Social Security Disability Benefits i Cheryl Coon, Swanson Thomas Coon & Newton, Portland, Oregon 2. Wage Earning and Social Security Benefits i Arlene Jones, Disability Rights Oregon, Portland, Oregon 3. ERISA Long Term Disability Appeals i Jerome Larkin, Rizk Law, Portland, Oregon Richard Rizk, Rizk Law, Portland, Oregon Special Topics in Disability Law: Long-Term Disability Appeals and Working While Receiving Benefits iii

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5 SCHEDULE 9:30 Registration 10:00 An Introduction to Social Security Disability Benefits F Two federal disability programs F Eligibility criteria F Process F Evaluation criteria Cheryl Coon, Swanson Thomas Coon & Newton, Portland 10:15 Earning Money Without Losing SSI or SSD Benefits F for work Work Incentives ning and Assistance (WIPA) F Title XVI (SSI) work incentives F Title II (SSDI/SSCDB/SSDWB) work incentives F Progression in real time Arlene Jones, Disability Rights Oregon, Portland 11:00 ERISA Long Term Disability Appeals F Claims process F Strategies F Case law Jerome Larkin, Rizk Law, Portland Richard Rizk, Rizk Law, Portland Noon Adjourn Special Topics in Disability Law: Long-Term Disability Appeals and Working While Receiving Benefits v

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7 FACULTY Cheryl Coon, Swanson Thomas Coon & Newton, Portland. Ms. Coon leads the firm s Social Security Disability Section and represents individuals applying for both SSD and SSI benefits at all stages of the process. She has litigated in state and federal courts and administrative tribunals, worked on public policy issues in the United States Congress as legal counsel and staff director of committees of the Congress, practiced as a senior assistant attorney general in the Oregon Attorney General s office, and taught as an adjunct professor at Lewis and Clark Law School. Ms. Coon is a member of the Oregon State Bar Disability Law Executive Committee and the incoming cochair of the newly established Oregon Trial Lawyers Association Social Security Disability Section. Ms. Coon presents frequently on Social Security disability benefits issues and provides training to caseworkers and counselors on filling out disability applications and reports. She holds an LL.M from the University of Washington School of Law. Arlene Jones, Disability Rights Oregon, Portland. Ms. Jones is a Certified Work Incentives Coordinator (CWIC) and for Work s Project Coordinator. for Work is the Work Incentives ning and Assistance (WIPA) program located within Disability Rights Oregon, providing no-cost benefits counseling to recipients of SSI and/or Social Security Disability living in Oregon and southern Washington who want to work. Prior to for Work, Ms. Jones was associated with Family and Community Together (FACT), a statewide organization empowering Oregon families experiencing disability. Jerome Larkin, Rizk Law, Portland. Mr. Larkin is Of Counsel to Rizk Law. He specializes in the administrative appeals of long-term and short-term disability claims and litigation and appeals of these cases. Previously, Mr. Larkin was in private practice specializing in municipal and appellate law. Before that, he worked for SAIF Corporation for 20 years as trial counsel, staff attorney, and appellate counsel and served as a special assistant attorney general during this time. Richard Rizk, Rizk Law, Portland. Mr. Rizk is an Oregon and federally licensed attorney who represents plaintiffs in civil litigation in the context of injury, disability, and insurance claims. A former insurance defense and coverage lawyer, Mr. Rizk founded his own law firm in Prior to that, Mr. Rizk regularly represented Oregon employers at workers compensation disability hearings as in-house counsel for Wausau Insurance (Nationwide). Later he served with Nationwide in Chicago managing environmental insurance coverage litigation nationally. He is licensed to practice law in Oregon and Illinois (inactive). Special Topics in Disability Law: Long-Term Disability Appeals and Working While Receiving Benefits vii

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9 Chapter 1 An Introduction to Social Security Disability Benefits Cheryl Coon Swanson Thomas Coon & Newton Portland, Oregon Contents 1. Who Is Eligible for Social Security Disability Benefits Are There Different Kinds of Benefits? What Is the Process for Obtaining Social Security Disability Benefits? How Long Does It Take? a. Initial Application b. Reconsideration c. Hearing d. Appeals Council e. Federal Court How Are Cases Evaluated? Other Topics of Interest

10 Chapter 1 An Introduction to Social Security Disability Benefits Special Topics in Disability Law: Long-Term Disability Appeals and Working While Receiving Benefits 1 ii

11 Chapter 1 An Introduction to Social Security Disability Benefits 1. Who is eligible for social security disability benefits An individual is eligible for social security disability benefits under the law if: 1) He cannot do "substantial gainful activity" (A person who is earning more than a certain monthly amount (net of impairment-related work expenses) is ordinarily considered to be engaging in substantial gainful activity (SGA). That amount is currently $1040/month) and 2) His disability is because of a "medically determinable physical or mental impairment"; and 3) His disability has lasted or will last for 12 months or is expected to cause death. 2. Are there different kinds of benefits? Yes. You hear most often about SSI and SSD. But in addition, there are benefits called Disabled widow s benefits and disabled child s benefits which I won t describe further here in our 101 course. SSI and SSD have the same substantive standards. The main difference is that there are additional eligibility requirements for SSI (limited income and resources). And, there are differences in what you get if you win. 3. What is the process for obtaining social security disability benefits? How long does it take? There are multiple steps in the social security disability process; overall from initial application to hearing you re looking at almost two years. a. Initial application Anyone who believes he or she may qualify for Social Security benefits should apply immediately. The process takes time, and benefits are paid based on the date of application. If you are able to go back to work, you can always withdraw your application. The important thing is to get the process started. Call the Social Security Administration (SSA) at to make your application. SSA will contact you for an interview day. You can also apply online at but applying online is not recommended unless you are very computer savvy. SSA will notify you of their decision within approximately four to six months of your application. It s important to know that approximately two-thirds to three-quarters of applicants are denied at this stage. It will take 4-6 months to get a decision. Special Topics in Disability Law: Long-Term Disability Appeals and Working While Receiving Benefits 1 1

12 Chapter 1 An Introduction to Social Security Disability Benefits b. Reconsideration If the decision on your application is unfavorable, you have the right to request reconsideration, and you should do that because many applications are not granted until the third step in the process the hearing. Your request for reconsideration must be filed within 60 days of the date on your denial letter. SSA will notify you of their decision on reconsideration within approximately four to six months of your application. c. Hearing If your claim is denied on reconsideration, you have 60 days to request a hearing before an administrative law judge (ALJ). In Oregon, it currently takes about months days for a hearing to occur after you request it. The hearing is the only time you get to present your case in person to a decision maker in Social Security. You are entitled to have a lawyer at your hearing. Your lawyer will argue your case to the judge and cross-examine the expert witnesses that the Social Security Administration is likely to have at your hearing, such as medical experts and vocational experts. You are also entitled to bring your own witnesses friends and family who know your condition. This can be very helpful to your case. The hearing is a very important stage because over two-thirds of denied claimants who go to hearing have their cases approved. After the hearing, the judge will issue a written decision within three months. d. Appeals Council If the Administrative Law Judge finds you are not disabled and there is a legal error in the decision, the next step is an appeal to the Appeals Council, which is located in Falls Church, VA. This appeal can take an unpredictable amount of time for a decision to be issued. We have seen it take four months or two years. e. Federal Court If the Appeals Council decision is unfavorable, you can appeal that decision to United States District Court. While it s certainly discouraging to keep being denied, you should not give up. Many cases that go to United States District Court are decided in favor of the applicant and are sent back for a new hearing or payment of benefits. 4. How are cases evaluated? Social Security Regulations provide for a five-step evaluation process to determine disability. Special Topics in Disability Law: Long-Term Disability Appeals and Working While Receiving Benefits 1 2

13 Chapter 1 An Introduction to Social Security Disability Benefits Step 1: Income Work generating more than $1040 per month after appropriate deductions constitutes substantial gainful activity (SGA) and disqualifies an applicant for disability benefits. Unsuccessful work attempts of up to 6 months generally don't count. Step 2: Severity A claimant must have a medical condition either mental, physical or both that limits his ability to work. This is called a severe impairment. In addition, the medical condition must have lasted -- or be expected to last -- for 12 months and/or result in death. However, claimants with symptoms that wax and wane may still qualify under this requirement if the active periods of their illness are sufficient enough to keep them from working. Step 3: The listing of impairments. This is a shortcut to being found disabled. The Social Security Administration has a list of illnesses that will result in a claimant being found disabled. It s not just the diagnosis alone, however. It s also how the illness affects the ability to function in a job. It is difficult to qualify as meeting a listing, but not meeting a listing does not mean a claimant loses. In that case, the evaluation continues to Step 4. Step 4: Not able to work at previous jobs. If a claimant is not found disabled at Step 3, the next question is whether he is capable of doing any work that he has performed in the last 15 years, in light of his limitations. Step 5: Other work available. If a claimant is found unable to return to previous work, then Social Security considers whether work exists in the national and local economies in significant numbers that the claimant can do. In this part of the evaluation process, the older a claimant is, the more likely it is that he will be found disabled. For example, a 50-year-old person who performed heavy unskilled labor all his life but is now limited to sedentary work due to an injury may be found disabled when a younger person with the same circumstances may not be found disabled. 5. Other topics of interest: Working while waiting for a decision Working after being found disabled The role of medical evidence Drug and alcohol addiction Special Topics in Disability Law: Long-Term Disability Appeals and Working While Receiving Benefits 1 3

14 Chapter 1 An Introduction to Social Security Disability Benefits Special Topics in Disability Law: Long-Term Disability Appeals and Working While Receiving Benefits 1 4

15 Chapter 2 Wage Earning and Social Security Benefits Arlene Jones Disability Rights Oregon Portland, Oregon Contents Presentation Slides SSI Calculation Sheet for Work Brochure

16 Chapter 2 Wage Earning and Social Security Benefits Special Topics in Disability Law: Long-Term Disability Appeals and Working While Receiving Benefits 2 ii

17 Chapter 2 Wage Earning and Social Security Benefits Wage Earning and Social Security Benefits Social Security Work Incentives Support the Path to Employment Learning Objectives Participants will gain understanding of: The benefits counseling supports and services available through for Work. It is possible for beneficiaries to work and keep Medicaid or Medicare in almost every case. It is possible for beneficiaries to become more financially stable by working even if work affects the Supplemental Security Income (SSI) they receive. Special Topics in Disability Law: Long-Term Disability Appeals and Working While Receiving Benefits 2 1

18 Chapter 2 Wage Earning and Social Security Benefits for Work The Ticket to Work and Work Incentives Improvement Act of 1999 authorized Social Security to award grants to provide community-based work incentives expertise to recipients of Social Security or Supplemental Security Income benefits based on disability. Initially the service was called Benefits ning, Assistance and Outreach (BPAO). In May 2006, with increased emphasis on work incentives, return to work supports and jobs for beneficiaries, the program was renamed the Work Incentives ning and Assistance (WIPA) program. After a brief break in program funding, the WIPA projects were reinstated August 1, for Work for Work is one of 95 WIPA projects in the U.S., its territories, and the District of Columbia, providing no cost benefits counseling. We are housed within Disability Rights Oregon. Our goal is to enable Social Security beneficiaries to make informed decisions about work, how work may impact benefits, and to support them in making a successful transition to financial independence. Our trained Community Work Incentives Coordinators offer guidance through the following services: Information and Referral Benefits Analysis Work Incentive ning Benefits Management Special Topics in Disability Law: Long-Term Disability Appeals and Working While Receiving Benefits 2 2

19 Chapter 2 Wage Earning and Social Security Benefits for Work Eligibility for Work services are available to people who are: Ages 14 years to retirement, and Are receiving a Social Security disability-based benefit, and Are currently working or considering work, and Live in Oregon or Washington s southern counties of Benton, Clark, Cowlitz, Franklin, Klickitat, Lewis, Pacific, Skamania, Wahkiakum, and Walla Walla. Social Security Work Incentives Regulations that make it possible for people who receive disability benefits to work without losing their benefits right away. There are different rules for SSI and SSD, but both programs have conditions that t allow a person time to test his or her ability to work without losing money and health coverage. Special Topics in Disability Law: Long-Term Disability Appeals and Working While Receiving Benefits 2 3

20 Chapter 2 Wage Earning and Social Security Benefits SUPPLEMENTAL SECURITY INCOME (SSI or Title XVI) WORK INCENTIVES How does Social Security Calculate the SSI Payment When The Beneficiary is Working? When Social Security is deciding how much SSI a person should receive, they look at other income the person may have: Unearned Income (such as Unemployment benefits or SSDI) and Earned Income (wages from work or income from selfemployment) Earned income counts in the month received. When Social Security is calculating a person s s SSI payment, they exclude the first $20 of unearned income. This is called a General Income Exclusion. They also exclude the first $65 and half of the remainder of the person s earned income. This is called the Earned Income Exclusion. Special Topics in Disability Law: Long-Term Disability Appeals and Working While Receiving Benefits 2 4

21 Chapter 2 Wage Earning and Social Security Benefits SSI Calculation Based on Earned Income Only Michael works at Safeway as a courtesy clerk and earns gross monthly wages of $800. He has no unearned income. $ Gross Earnings - $ Earned Income Exclusion $ /2 $ Total Countable Earned Income $ SSI Federal Benefit Rate - $ $ Adjusted SSI Amount $ Gross Earnings +$ Adjusted SSI Amount $1, You cannot lose by working! SSI Calculation When Beneficiary Has Both Earned and Unearned Income $ Unearned Income (SSDI) -$ General Income Exclusion $ Countable Unearned Income Katie receives $435 SSDI $ Gross Earnings - $ Earned Income Exclusion $ /2 $ Countable Earned Income +$ Countable Unearned Income $ TOTAL COUNTABLE INCOME $ SSI Federal lbenefit fitrate - $ $ 0.00 Adjusted SSI Amount each month and works at Big Al s earning gross monthly wages of $778. $ Unearned Income $ Gross Earnings +$ 0.00 Adjusted SSI Amount $1, Special Topics in Disability Law: Long-Term Disability Appeals and Working While Receiving Benefits 2 5

22 Chapter 2 Wage Earning and Social Security Benefits Supplemental Security Income (SSI) Work Incentives 1619(b) Extended Medicaid Coverage Allows SSI recipients to keep their Medicaid after their countable earned income is too high to allow SSI cash payments as long as they meet certain requirements: Have been eligible for an SSI benefit payment for a least one month; Still meet the Social Security Administration disability requirement; Meet the Medicaid needs or use test (this means that you have used your Medicaid in the last year, would need to use it if you became ill or injured, or need your Medicaid to continue working); Have GROSS annual earned income less than the current state "threshold amount" of $32,725 (2014), higher in some cases; and Have countable unearned income of less than the current Federal Benefit Rate (FBR) of $721 (in 2014) and resources under the current limit for SSI recipients of $2,000 for an individual, $3,000 for a couple. SSA POMS SI Medicaid while Working What if I Earn Over the 1619(b) limit? Employed Persons with Disabilities (EPD) Program Eligible participants are charged a Participant Fee, based on their income. A person may be eligible for the EPD program if: 1) have a physical, cognitive, mental health or developmental disability or are legally blind; 2) are employed receiving taxable wages or are self-employed; 3) have countable resources of $5,000 or less; and 4) have earned income of no more than 250 percent of the Federal Poverty Level for a family of one, after DHS-allowed deductions. To apply for EPD, call your local Area Agencies on Aging and Aging & People with Disabilities Services office in your area, or call 1(800) (voice and TTY). Special Topics in Disability Law: Long-Term Disability Appeals and Working While Receiving Benefits 2 6

23 Chapter 2 Wage Earning and Social Security Benefits What if I Earn Over the 1619(b) limit? Earned Income Limits $59,388/year or $4,949/month Participant Fees: Under $70 $0 $790 - $ $50 $973 - $2, $100 $2,432 and above $150 Individuals eligible for EPD program are eligible for Medicaid services including the Oregon Health Plus medical benefits package and long term care (if assessed eligible). More information can be found at Additional SSI (Title XVI) Work Incentives Student Earned Income Exclusion Impairment Related Work Expense Blind Work Expense for Achieving Self Support Property Essential to Self Support Special Topics in Disability Law: Long-Term Disability Appeals and Working While Receiving Benefits 2 7

24 Chapter 2 Wage Earning and Social Security Benefits Student Earned Income Exclusion (SEIE) If you are under age 22, and regularly attending school, Social Security Administration (SSA) does not count up to $1,750 of earned income per month when calculating SSI payment amount. SSA will exclude up to $7,060 annually in SSA POMS SI D Definition of Student for Purposes of the SEIE SSA POMS SI Student Earned Income Exclusion Student Earned Income Exclusion (SEIE) Example Student Earned Income Exclusion 2014 If you are under age 22 and regularly attending school, SSA does not count up to $1,750 of earned income per month when calculating your SSI payment amount. The maximum yearly exclusion is $7,060. These amounts are for the year These figures are usually adjusted by SSA each year based on the cost-of-living. YEAR MONTH January February March April May June July August September October November Gross Wages $ $ $ $ $ $ 1, $ 1, $ 1, $ $ $ Cumulative Gross Wages $ $ 1, $ 1, $ 1, $ 1, $ 3, $ 4, $ 6, $ 6, $ 7, $ 7, SEIE $ $ $ $ $ $ 1, $ 1, $ 1, $ $ $ - Cumulative SEIE usage $ $ 1, $ 1, $ 1, $ 1, $ 3, $ 4, $ 6, $ 6, $ 7, $ 7, Special Topics in Disability Law: Long-Term Disability Appeals and Working While Receiving Benefits 2 8

25 Chapter 2 Wage Earning and Social Security Benefits Impairment Related Work Expense (IRWE) Some individuals may have out-of-pocket expenses for items or services they need in order to work. Social Security may subtract these expenses from gross wages after the $85 is deducted. This results in lower countable earned income, which results in a higher SSI payment. An expense may qualify as an Impairment Related Work Expense (IRWE) when: The items or services enables the beneficiary to work; The beneficiary needs the items or services because of a physical or mental impairment; The beneficiary paid the cost and are not reimbursed by another source such as Medicare, Medicaid or a private insurance carrier; The cost is reasonable, that is, it represents the standard charge for the item or service in your community; and The beneficiary paid for the expense in a month he or she is or were working. Impairment Related Work Expense (IRWE) Examples of possible IRWE: Prescriptions co-payments Medical care Assisted Transportation Costs of adaptive devices for automobiles Work related equipment Job coaching Durable medical equipment Prosthetic devices Attendant care SSA POMS SI Impairment-Related Work Expenses (IRWE) Special Topics in Disability Law: Long-Term Disability Appeals and Working While Receiving Benefits 2 9

26 Chapter 2 Wage Earning and Social Security Benefits Blind Work Expense (BWE) Social Security has special rules for SSI beneficiaries who have statutory blindness. Blind Work Expenses (BWE) basically deduction of ANY expense incurred that is related to working. Some common expenses people claim as BWEs include: Service animal expenses Transportation to and from work Federal, state, and local income taxes Social Security taxes (FICA) Attendant care services Visual and sensory aids Translation of materials into Braille Professional association fees Union dues The result is generally a smaller deduction from the beneficiary s SSI payment when working. SSA POMS SI Blind Work Expenses (BWE) SSI Calculation Based on Earned Income and BWE Clara works in a Call Center full time and earns gross monthly wages of $1,732. She pays $160/month for meals at work and $125/month for bus tickets and taxi fares = $ BWE. $ 1, Gross Earnings - $ Earned Income Exclusion $ 1, /2 $ Total Countable Earned Income - $ Blind Work Expenses $ TOTAL COUNTABLE INCOME $ SSI Federal Benefit Rate - $ $ Adjusted SSI Amount You cannot lose by working! $ 1, Gross Earnings +$ Adjusted SSI Amount $1, Special Topics in Disability Law: Long-Term Disability Appeals and Working While Receiving Benefits 2 10

27 Chapter 2 Wage Earning and Social Security Benefits for Achieving Self-Support (PASS) for Achieving Self-Support (PASS) allows a beneficiary to set aside income and/or resources for a specific period of time to pay for expenses associated with reaching a vocational goal. You must outline the steps you plan to take and the items and services you expect to need. If your plan is approved, Social Security may allow you to set aside funds (such as unearned income, countable earnings, or resources) to help you achieve your goal. Since these funds will not be counted, a PASS may allow you to become eligible for SSI and Medicaid or it may increase the amount of your SSI payment. For more information on PASS go to Example PASS plans can be found at Property Essential to Self Support (PESS) Many people who want to be self-employed are afraid that owning a business will count as a resource which may cause the loss of SSI and Medicaid. Under a provision known as property essential for selfsupport, (PESS) SSA will not count the property if the SSI beneficiary Uses it in a trade or business (for example, inventory), or Uses it for work as an employee (for example, tools or equipment), regardless of the value or rate of return. NOTE: The PESS provisions only apply to business structures as sole proprietorships or simple partnerships. PESS provisions do NOT apply if your business is incorporated or structured as a Limited Liability Company (LLC) SSA POMS SI Property Essential to Self-Support Special Topics in Disability Law: Long-Term Disability Appeals and Working While Receiving Benefits 2 11

28 Chapter 2 Wage Earning and Social Security Benefits SOCIAL SECURITY DISABILITY INSURANCE (SSDI, SSCDB, SSDWB or Title II) WORK INCENTIVES How Do Earnings Affect SSDI, SSCDB, or SSDWB? Earned income always counts in the month earned. Trial Work Period A beneficiary has 9 trial work months. You get your full SSDI, SSCDB, or SSDWB during your Trial Work Period (TWP), regardless of how much you earn! In 2014, you must earn at least $770 in gross wages in a month before the month will be counted as a Trial Work month. Trial Work months are not required to be consecutive. Your Trial Work Period ends when you use all 9 months within a rolling 60 month period. SSA POMS DI The Trial Work Period (TWP) Special Topics in Disability Law: Long-Term Disability Appeals and Working While Receiving Benefits 2 12

29 Chapter 2 Wage Earning and Social Security Benefits How Do Earnings Affect SSDI, SSCDB, or SSDWB? Substantial Gainful Activity (SGA) Each year, Social Security uses earnings guidelines when deciding whether or not a beneficiary s earnings show Substantial Gainful Activity (SGA). In 2014, the SGA guideline is $1,070 /month non-blind and $1,800/month blind. Extended Period of Eligibility (EPE) Starts the month after Trial Work Period ends and lasts 36 consecutive months. A beneficiary will receive their disability benefit any month they do not work, or when earnings fall below the Substantial Gainful Activity (SGA) level. Your benefit payment will generally continue until you do work at SGA level, provided that Social Security continues to find that you are medically disabled. Let s take another look at Katie s employment. Katie is an SSI and SSDI recipient. She receives $435 SSDI each month and works at Big Al s earning ggross monthly wages of $778. She does not receive an SSI check payment (non-pay due to excess income from wages) and has Medicaid through 1619(b). If this was her first work attempt since SSDI entitlement to benefits, would she be using her Trial Work Period months? Would it be financially and benefits-wise savvy for her earn more? What if she had already used all her Trial Work Period months and was now in the 36 months Extended Period of Eligibility? Special Topics in Disability Law: Long-Term Disability Appeals and Working While Receiving Benefits 2 13

30 Chapter 2 Wage Earning and Social Security Benefits What happens if my earnings are above the SGA guideline? Additional SSDI Work Incentives Social Security must decide if your work is truly Substantial Gainful Activity. They may apply the following SSDI Work Incentives to help them make this decision: Averaging Unsuccessful Work Attempt Impairment Related Work Expenses Subsidy and Special Conditions Averaging and Unsuccessful Work Attempt Averaging Social Security may average income when monthly earnings are typically under SGA but one or two months are above. If average earnings are below SGA, benefits will not be ceased. Large fluctuations in earnings cannot be averaged; and averaging can only occur during a time period with the same SGA amount, as SGA changes (typically each calendar year). Unsuccessful Work Attempt Social Security may look at how long a beneficiary was able to work at SGA level. Does not apply during Trial Work Period or after cessation. Termination or reduction of work must be due to an individual s impairment or removal of special conditions. Work attempt must last fewer than six months. Special Topics in Disability Law: Long-Term Disability Appeals and Working While Receiving Benefits 2 14

31 Chapter 2 Wage Earning and Social Security Benefits Impairment Related Work Expense (IRWE) Subsidy & Special Conditions Grace Period Impairment Related Work Expense (IRWE) Social Security may deduct the beneficiary s Impairment Related Work Expenses to determine the person s total countable earnings in comparison to SGA. By reducing countable income, IRWE s result in a decrease in the amount counted towards SGA, one can remain eligible for SSDI benefits. Subsidy and Special Conditions Social Security may try to determine the true value of a beneficiary s work. Support received on the job that may result in receiving more pay than the actual value of services performed. Could be support provided by the employer (extra breaks, more time to finish work). Could be something provided by someone other than the employer. Cessation / Grace Period If Social Security decides that a beneficiary s work is SGA, the person will receive payment for 3 more months. The first month is known as the cessation month and the following two months are know as the grace period. After this, the SSDI payments will be suspended. If SGA work were to happen after the 36 months Extended Period of Eligibility, then SSDI would be terminated. Determining Countable Earnings references Averaging SSA POMS DI Averaging Countable Earnings Unsuccessful Work Attempt SSA POMS DI Unsuccessful Work Attempt (UWA) Impairment Related Work Expense (IRWE) SSA POMS DI Determining When IRWE are Deductible and How They Are Distributed Subsidy and Special Conditions Cessation / Grace Period Special Topics in Disability Law: Long-Term Disability Appeals and Working While Receiving Benefits 2 15

32 Chapter 2 Wage Earning and Social Security Benefits What if I must stop working after this 36-month period? Expedited Reinstatement If you are no longer able to work at the SGA leve, and you still have the same or a related disability, you may ask Social Security to restart your benefits without having to file a new application. You must make this request within 5 years of the month in which your SSDI benefits were terminated. Must continue to meet the medical definition of disability and not be earning over SGA. Social Security will pay you provisional benefits for up to 6 months while they make their decision. This process is known as Expedited Reinstatement of Benefits (EXR). After this five year period, you may always file a new application for benefits if needed. SSA POMS DI Expedited Reinstatement What will happen to my Medicare if I work? Medicare will continue while a beneficiary s SSDI benefit payments continue. Even if the beneficiary s SSDI payment stops because of SGA level work activity, the beneficiary s premium-free Medicare Part A (hospital insurance) benefits will continue for at least 93 months after the Trial Work Period if the person remains medically disabled. This work incentive is the Extended Period of Medicare Coverage (EMPC) The person can purchase Medicare Parts B and D at the same price paid by non-working people with disabilities. SSA POMS DI Extended Period of Eligibility (EPE) and Related Medicare Provisions Special Topics in Disability Law: Long-Term Disability Appeals and Working While Receiving Benefits 2 16

33 Chapter 2 Wage Earning and Social Security Benefits Reminders for beneficiaries as they pursue employment Reporting Wages to Social Security Tell Social Security when you start working. Report wages on a regular basis. For SSI beneficiaries, this monthly. This will help avoid overpayment. Social Security may send you a Work Activity Report form. Reminders for beneficiaries as they pursue employment Let Social Security know if Increase or decrease work hours Stop working Get married Leave school or go back to school Move Special Topics in Disability Law: Long-Term Disability Appeals and Working While Receiving Benefits 2 17

34 Chapter 2 Wage Earning and Social Security Benefits Keep Your Records Keep a copy of all your correspondence with the Social Security Administration (SSA). Keep a phone log of all calls to SSA. Keep all your check stubs. Keep all your benefits planning information. Organize this information in a file or binder and put it in a safe place. for Work Work Incentives ning & Assistance (WIPA) Program for Oregon and Southern Washington PLAN for WORK A project of DISABILITY RIGHTS OREGON Disability Rights Oregon 610 SW Broadway, Suite 200 Portland, OR (503) x227 1(800) x227 toll-free statewide pfw@droregon.org fo or Work--2014_10-23 Special Topics in Disability Law: Long-Term Disability Appeals and Working While Receiving Benefits 2 18

35 Chapter 2 Wage Earning and Social Security Benefits Beneficiary Name: WIPA Staff Person: Scenario Description: SSI Calculation Sheet 2014 Date: Step Unearned Income General Income Exclusion (GIE) $20 Countable Unearned Income Calculations $ - - $ - = $ - Gross Earned Income $ - Student Earned Income Exclusion - $ - Remainder $ - GIE (if not used above) $20 - $ - Remainder $ - Earned Income Exclusion (EIE) $65 - $ - Remainder $ - Impairment Related Work Expense (IRWE) - $ - Remainder $ - Divide by 2 - $ - Blind Work Expenses (BWE) - $ - Total Countable Earned Income = $ - Total Countable Unearned Income Total Countable Earned Income PASS Deduction Total Countable Income Base or Full SSI Benefit Rate ($721) Total Countable Income Adjusted SSI Payment Adjusted SSI Payment Gross earned income received Gross unearned income received PASS, BWE or IRWE Expenses Total Financial Outcome $ - + $ - - $ - = $ - $ $ - = $ $ $ - + $ - - $ - = $ Special Topics in Disability Law: Long-Term Disability Appeals and Working While Receiving Benefits 2 19

36 Chapter 2 Wage Earning and Social Security Benefits Special Topics in Disability Law: Long-Term Disability Appeals and Working While Receiving Benefits 2 20

37 Chapter 2 Wage Earning and Social Security Benefits What You should do. Contact for Work if you are receiving SSDI and/or SSI benefits and want to work. If you want our help... Call us at x227 or x227 / Fax: and an Information Specialist will assist you in applying for our services. Helping people make informed choices about working for Work is a project of Disability Rights Oregon Find us on the web at: SW Broadway, Suite 200 Portland, OR Phone: Fax: pfw@droregon.org This project receives funding from the Social Security Administration under grant (6 WIP ). Social Security has reviewed the following publication for technical accuracy only; this should not be considered an official Social Security document. GET HELP UNDERSTANDING HOW WORK AFFECTS SSDI AND SSI WORK INCENTIVES PLANNING AND ASSISTANCE FOR OREGON AND SOUTHERN WASHINGTON Special Topics in Disability Law: Long-Term Disability Appeals and Working While Receiving Benefits 2 21

38 Chapter 2 Wage Earning and Social Security Benefits WORK INCENTIVE PLANNING AND ASSISTANCE If you are a Social Security disability beneficiary and would like to know how work will affect your benefits, we can provide information about work incentives to help you make informed decisions about work. for Work services are for you if you... Our goal is to enable SSDI or SSI beneficiaries to make informed choices about work and to support them in making a successful transition to financial independence. Our trained Community Work Incentives Coordinators will offer guidance through the following services: Have a disability Are receiving Social Security Disability Insurance (SSDI), and/or Are receiving Supplemental Security Income (SSI), and Information and Referral - Information about work incentives and/or referral to other agencies or employment networks. Benefits Analysis - Explanations of work incentives and worksheets showing benefits, work, expenses, etc. Want to know how work will affect your benefits and services for Work services are available to people who are... Work Incentive ning - The development of a customized Work Incentive through discussions, information, and worksheets that will assist beneficiaries in becoming financially independent. Currently working, or Just thinking about going to work Live in Oregon or Washington s southern counties of Benton, Clark, Cowlitz, Franklin, Klickitat, Lewis, Pacific, Skamania, Wahkiakum, and Walla Walla Benefits Management - Periodic adjustments and information to assist in maintaining work and moving toward financial independence. Social Security s Work Incentives Can Help Beneficiaries Return to Work WHAT ARE WORK INCENTIVES? Social Security work incentives are regulations that make it possible for people who receive disability benefits to work without losing their benefits until they become self-supporting. There are different rules for SSI and SSDI, yet both programs have conditions that allow a person time to test his or her ability to work without losing money and health coverage. If your benefits end because of your work and you have to stop working later, work incentives can make it easy to begin receiving benefits again. Special Topics in Disability Law: Long-Term Disability Appeals and Working While Receiving Benefits 2 22

39 Chapter 2 Wage Earning and Social Security Benefits Special Topics in Disability Law: Long-Term Disability Appeals and Working While Receiving Benefits 2 23

40 Chapter 2 Wage Earning and Social Security Benefits Special Topics in Disability Law: Long-Term Disability Appeals and Working While Receiving Benefits 2 24

41 Chapter 3 ERISA Long Term Disability Appeals Jerome Larkin Rizk Law Portland, Oregon Richard Rizk Rizk Law Portland, Oregon Contents A. Overview B. History and Context C. The Administrative Disability Appeal D. Exhaustion of Remedies E. Appeal to Federal District Court Standard of Review Glenn and Structural Conflicts of Interest What Evidence Is Admissible in Federal Court? F. Preemption and Overall Review G. Strategies and Discussion

42 Chapter 3 ERISA Long Term Disability Appeals Special Topics in Disability Law: Long-Term Disability Appeals and Working While Receiving Benefits 3 ii

43 A. Overview Chapter 3 ERISA Long Term Disability Appeals ERISA is an acronym for the Employee Retirement Income Security Act of As explained below, the full title hints at the story behind this vast and crucial federal law. i ERISA is crucial because it directly impacts the lives of working Americans it governs health care, wages, pensions... and most employer provided disability plans. ERISA is not the only federal law regulating employee benefits, but it is certainly the most comprehensive and important. Our scope is limited to employer provided disability plans, policies, claim procedure and litigation. The S in ERISA stands for security. To the American worker security primarily means reliable wages, health care, pensions and disability insurance precisely the scope of ERISA. B. History & Context Before 1974 the pensions of American employees were vulnerable. Many employers did not take adequate steps to protect employee pension plans. As a result, thousands of American workers lost retirement benefits when employers went out of business. Momentum to solve the dissolving pension problem peaked in 1963 when a Studebaker- Packard Corporation plant in South Bend, Indiana closed, and the company defaulted on its promise to pay pension benefits to hourly workers. ii When President Gerald R. Ford signed ERISA into law on September 2, 1974, he commented: Under this law the men and women of our labor force will have much more clearly defined rights to pension funds and greater assurances that retirement dollars will be there when they are needed. Prior to ERISA, employee benefits were governed by a crazy quilt of state laws. To add predictability and uniformity, ERISA, by its own terms, pre-empts inconsistent or conflicting state law. Legislative history shows that uniformity via federal pre-emption was designed and intended to protect plan beneficiaries, rather than insurers or plan administrators. iii ERISA sought to increase worker security by establishing uniform minimum standards for employee benefits. iv ERISA set minimum standards in the following areas: 1. Government re-insurance for benefit plans; 2. Disclosure, funding and vesting requirements; 3. Remedies if ERISA is violated; and 4. Fiduciary duties on plan administrators. According to trust law, a fiduciary is someone who owes a duty of loyalty to safeguard the interests of another person or entity. Common fiduciaries include: a trustee of a testamentary trust; a guardian of the estate of a minor; a conservator of the estate of an incompetent person; an executor of a will; and, an administrator of an estate. Generally speaking trust law is governed by state law. By 2014, most states had adopted the Uniform Trust Code (UTC) in some part. Under the UTC, traditional fiduciary obligations are default rules. v UTC establishes that the terms of the trust trump competing UTC provisions. vi On the other hand, the UTC requires a trustee to: 1. Act in good faith; Special Topics in Disability Law: Long-Term Disability Appeals and Working While Receiving Benefits 3 1

44 Chapter 3 ERISA Long Term Disability Appeals 2. Act in accordance with trust terms; and 3. Act in the interest of the beneficiaries. vii For purposes of ERISA, a fiduciary is a person or entity that has discretionary authority in the benefit plan administration.viii ERISA is based on trust concepts, and employer sponsored plans almost always employ trust instruments. ERISA requires that a qualified benefit plan name a fiduciary whose duty it is to control and manage the operation and administration of the plan in the beneficiary s best interest. ix In 2002, Ed Bradley of 60 Minutes reported that Unum Provident, the nation s largest disability insurer, had set up systems and procedures which placed enormous pressure on disability claims handlers to deny claims. x Dateline NBC produced a similar story regarding insurer pressure on so called independent medical examiner that same year. xi This publicity left many consumer advocates wondering whether plan administrators and insurers had been taking advantage of the absence of adequate remedies within ERISA for bad faith claim handling. Because ERISA was primarily designed to protect workers pensions, little consideration was given to employee welfare benefits such as disability insurance. And, as discussed further below, courts have consistently narrowly construed the rights of beneficiaries who have been denied plan benefits. Critics suggest legislative changes to ERISA are necessary. xii Meanwhile, the US Supreme Court has ruled that ERISA preempts state consumer protection laws. xiii C. The Administrative Disability Appeal Most ERISA disability plans now set out a procedure for an initial independent administrative review by a new disability claim reviewer employed by the same insurer. The deadline to administratively appeal the initial denial is usually 180 days from date the denial is received by the claimant: PRACTICE TIP: The denials are rarely, if ever, sent by certified mail, return receipt requested, and a potential client usually does not record the date of receipt. Conversely, the insurer rarely, if ever, has proof of the date of receipt. The best practice is to calendar the due date for the appeal as 180 days from the date of the denial to ensure timely filing. After the appeal is filed, the plan administrator generally has 45 days to notify the claimant of a decision on the administrative appeal and another 45 days, if extraordinary circumstances exist, if notice of the need for extension is made before expiration of the initial period. TRAP: 180 days is ALWAYS less than 6 months. Use a date calculator. PRACTICE TIP: Focus on the denial letter; then isolate the basis for denial. Identify any and all misstatements and contradictions in the denial. Common reasons for denial include: 1. Lack of Objective Findings 2. Not Actively Treating Special Topics in Disability Law: Long-Term Disability Appeals and Working While Receiving Benefits 3 2

45 Chapter 3 ERISA Long Term Disability Appeals 3. Too Early: Eligible employee? 4. Too Late: No longer an employee 5. Premature: Elimination period not satisfied (usually 90 days) 6. Non-Responsive M.D. 7. Surveillance reveals not disabled 8. Independent Medical Exam [IME] 9. Vocational Consultant 10. Not/no longer disabled under Any Occupation standard 11. Psychological Coverage Expired PRACTICE TIP: Getting medical evidence in the record is much more difficult at the federal district court level. As a result, it is crucial to submit as much well-reasoned medical evidence as possible during the administrative review stage. E-Fax is a preferred method for communication with claims. Claims examiners change. Creating a record of submissions into the claim file is crucial. TRAP: It sometimes takes time for medical providers to respond to opinion requests. Avoid cases where there is insufficient time or means to get necessary medical evidence. TRAP: Some potential clients wish to complete the administrative appeal pro se. Carefully evaluate medical evidence within a claim file prior to taking these cases. It may not be possible to supplement the administrative record once you get to federal court. D. Exhaustion of Remedies Not completing the administrative appeal prior to suit may result in dismissal for failure to exhaust administrative remedies. xiv,xv However, whether exhaustion is required under ERISA to establish a claim for breach of fiduciary duty is subject to argument. xvi In Bilyeu v. Morgan Stanley the Ninth Circuit excused the exhaustion requirement, holding that an insurer failed to engage in meaningful dialogue where the insurer found a treating physician s report insufficient to reverse a denial, but failed to communicate that assessment to the beneficiary. xvii,xviii In remanding the case, the Bilyeu court stated: The district court abused its discretion by dismissing Bilyeu s denial-of-benefits claim for a failure to exhaust administrative remedies. The court also erred when it concluded that Unum had satisfied the requirements for an equitable lien by agreement. The judgment of the district court is therefore vacated and the case is remanded for further proceedings. xix The plan administrator, in terminating benefits, had advised Ms. Bilyeu of two options she must take within 180 days: (1) provide additional information to support your request for disability benefits or (2) if you disagree with our determination and want to appeal this claim decision, you must submit a written appeal. Special Topics in Disability Law: Long-Term Disability Appeals and Working While Receiving Benefits 3 3