Thursday, November 26, 2009

LTD scam

At work the premiums for long term disability have doubled in the last two years. This is after years and years of 10%-30% increases every single year. This is a big part of why.

Indiscreet partier cut off from disability claim

Our LTD carrier is also ManuLife so make no mistake, it's my premiums that were paying for Nathalie's dream to retire at age 28 at my personal expense. Tough luck she was cut off after "only" 18 months. I wonder how many Nathalies there are from coast to coast. Thousands? Tens of thousands? Sitting on the beach enjoying margaritas laughing at the suckers back home.

The thing about LTD is this. This is entirely employee paid. So the employer has little reason to care about premiums. Also the scheme is mandatory so ManuLife and other carriers have a captive group of policyholders. They have little incentive to deal with fraud and abuse since the costs are just transferred directly to the captive policyholders who aren't going anywhere. It is mathematically impossible for LTD rates to increase as much as they have without being accompanied by systemic fraud and abuse.

In the past when I started out in high tech LTD was a good thing. For a negligible cost you could protect your income in case something serious and unexpected happened. Something like a major car accident or a serious stroke where someone was clearly messed up and indisputably unable to be at work.

That's no longer the case and now we need to make changes. The reality is that the way disability is defined today is that basically anyone with moral blinders and a bit of moxie can get himself classified as disabled. Even someone who otherwise looks and acts healthy, partying it up with friends at the strip club.

What I'd like to see is to give employees choice in LTD. I don't disagree with forcing employees to purchase at least some level of LTD coverage. We should be allowed to take our business elsewhere if the carrier is not doing enough to control increases in claims. Specifically I'd like to see a competitor emerge which provided more traditional LTD as it was originally designed and intended at a much lower cost to the policyholder. The following conditions and more would specifically not be covered.

- clinical depression
- chronic fatigue syndrome
- chronic muscle soreness
- environmental illness/ multiple chemical sensitivity
- stress

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