Physical and mental health disability claims are treated differently. Here's what to know.

People don't get to choose the illnesses that render them too disabled to work, but insurance companies have the power to approve or deny claims based on where in the body their condition exists.

It's a disconnect that Jessa Victor, a shareholder attorney at the Madison office of Hawks Quindel, specializes in. She's seen what can happen to people with mental health disorders denied long-term disability coverage, putting them in situations they would never face if their problem was physical.

"Every time somebody calls me for help with a disability, they say — and every single person says this — 'I never thought I'd be in this position. I never thought I'd need disability insurance,'" said Victor.

Mental health coverage appears to be locked in a time warp. Here are some key questions and answers.

How are physical and mental health-related disabilities treated differently by insurance companies?

When someone has a physical illness that impairs their ability to work, they can apply for long-term disability coverage after they've been out of work for 90 to 180 days — typically a process that follows short-term disability coverage.

If approved, that person can receive a portion of their income up until retirement age.

When someone struggling with a behavioral health condition applies for long-term disability coverage, however, they face a much higher rate of refusal, and even if approved, can only be compensated for 24 months.

And, as long as they're with the same employer, the time off accumulates. For example, someone who took three months off this year would only have 21 months left for as long as they're with their employer.

Additionally, if someone with physical ailments has secondary mental health symptoms — say, depression that comes from having chronic back pain — that too may trigger the 24-month limitation.

How many employees apply for disability related to mental health and substance use disorder?

Nationally, it's estimated that 7% to 8% of all long-term disability claims are related to mental health, according to a testimony provided by Richard Leavitt, a consulting actuary at the Smith Group, a disability reinsurance risk manager and consultant.

How often are mental health-related disability claims denied?

Companies aren't obligated to disclose such data. However, reports from the few companies that do release data, such as Sedgwick, a third-party claims administrator, indicate mental health claims are nearly twice as likely to be denied as other claims.

Why are so many mental health claims denied?

A nationwide shortage of psychiatrists certainly impacts someone's chances. More than 150 million people live in federally designated mental health professional shortage areas, which makes it difficult to be assessed adequately.

But for those who have a mental health professional, other problems arise. Insurers can hire mental health specialists to peer-review someone's medical documents, and that assessment can override a claimant's team of specialists. Mark DeBofsky, principal attorney at DeBofsky Law in Chicago and a member of the 2023 ERISA Advisory Panel, said that even if a medical professional is hired by an insurer and makes an inaccurate determination, there's very little recourse.

"They don't face any potential malpractice liability. In this instance, they're just giving an opinion," DeBofsky said. "And there's no accountability for having that opinion."

What are discretionary clauses?

For people appealing the denial of their claims for mental health or addiction, insurers almost always have the upper hand because of "discretionary clauses," Victor said. In essence, insurance companies are allowed to interpret the provisions of their plans and determine eligibility as they see fit.

The role of a judge in these cases, Victor said, isn't to determine whether someone has a disabling condition and should have been paid benefits. Instead, it comes down to whether the insurance company was reasonable in how it interpreted its own policies.

"It gives the benefit of the doubt to the insurance company's decision, even if a judge disagrees with the decision," Victor said. "If they can't prove that the decision was unreasonable, it has to be upheld."

Discretionary clauses have been banned in 20 states. Wisconsin, however, is not one of them.

Have you been denied disability coverage for mental health or substance use disorder?

As the Journal Sentinel continues to investigate and flesh out its series, "The Nervous Limitation," we want to hear from those in Wisconsin who have been impacted by insurers' denying them disability coverage. Please note this is separate from Social Security Disability Insurance and Supplementary Security Income.