By Brian Patrick Bronson, Esquire
For physicians, the ability to earn a living is inseparable from the ability to practice medicine. Years of education, training, and dedication have culminated in a career that not only provides purpose, but also financial stability. Yet few of us stop to consider what would happen if an injury or illness suddenly took that ability away.
Many physicians believe they are protected through the disability insurance offered by their hospital system, private practice group, or employer. However, relying solely on employer-provided long-term disability (LTD) coverage – particularly when it falls under the Employee Retirement Income Security Act (ERISA) – can be a serious mistake.
The Problem with Employer-Provided LTD Plans
While well-intentioned, employer-sponsored disability insurance plans are governed by ERISA, a federal law that heavily favors insurance carriers in the event of a claim dispute. Under ERISA, if your disability claim is denied, you often face a limited ability to introduce new evidence during the appeals process. Even worse, courts tend to defer to the insurance company’s decision unless it can be shown to be arbitrary or capricious – a high legal bar.
In contrast, an individually owned policy falls under state insurance laws, which often allow more favorable standards of judicial review and a broader array of consumer protections. With a private policy, your ability to appeal or file suit over a denied claim is more robust, and the definition of disability is more precise and physician-friendly (e.g., “own occupation” coverage that protects your ability to practice in your specialty, rather than work in any job).
Why Your Existing Policy May No Longer Be Enough
If you were prudent enough to purchase a personal disability insurance policy early in your career, that’s commendable. But when was the last time you reviewed it? Policies purchased during residency or early practice years often fail to keep up with increased earnings, lifestyle changes, or family responsibilities.
You may be underinsured and not even realize it. For example, a policy that covers $6,000 per month may have been adequate a decade ago, but today it might only protect a fraction of your current income. Many older policies also lack valuable riders such as cost-of-living adjustments (COLA) or future purchase options.
What You Should Do Now
- Get an Independent Review. Whether you have a group policy, an individual policy, or both, now is the time to make sure you’re adequately covered. We encourage all physicians to request a review of their current disability coverage. A Long-Term Disability attorney will examine the terms, definitions, and benefit amounts to help you understand exactly what you’re protected against – and what gaps may exist.
- Don’t Rely Solely on Your Employer. Even the best hospital-provided LTD plan can leave significant gaps. A personal policy, particularly one tailored to your specialty and income level, is your strongest financial safeguard.
- Make Disability Insurance a Priority. You wouldn’t go without malpractice insurance. Disability insurance deserves the same attention because your ability to earn a living is your greatest asset.
The Big Picture
Disability is not a distant risk. It is a very real one that affects physicians more than we might like to admit. Securing adequate, individually owned coverage is not just prudent; it’s essential. And reviewing your current policy is a smart step to ensure your financial future is well protected.
