Frequently Asked Questions for Disability Claims
As you and your employees have questions about disability claims, we provide resources to answer those questions promptly. Common questions & answers:
- Claims Process
- Claims Management
- Disability Claims
- Life Premium Waiver
- Life Claims
- Critical Illness Claims
From what location will your organization process claims?
Life and Disability claims are primarily administered by Principal Life Insurance Company’s home office in Des Moines, Iowa. The claim area is staffed 7 a.m. to 5 p.m. Central Time. The Life & Disability Claim department has both a toll-free phone number, 800-245-1522, and a toll-free fax number, 800-255-6609. All staff has voice mail, allowing messages to be left 24 hours a day, 7 days a week. Additionally, our 800-fax number is available 24 hours a day, 7 days a week.
When should a Short-Term Disability (STD) or Long-Term Disability (LTD) claim be filed?
For STD, you should encourage the employee to file the claim as soon as you are aware that the employee will be off work beyond the elimination period. For LTD, we typically advise that the claim is filed no later than halfway through the LTD elimination period.
There are many advantages to filing a claim early. Early notification helps us be proactive in obtaining additional information that may be needed to make the initial claim decision. It also assists us in making timely decisions. Once the claim is filed, a claim manager is assigned to the claim. The claim manager will be your point of contact for any claim questions that may arise.
There are four sections to the claim form: the HIPAA Authorization, the Employer Section, the Employee section and the Physician section. All four sections must be completed. Note: If you have both STD and LTD coverages with Principal Life, and you have already filed an STD claim for your employee, you do not need to file a separate form for the LTD coverage.
How are claims submitted?
A Disability claim can be filed the following ways:
- Online: claim form from the Forms Library
- Fax: 1-800-255-6609
- Mail: Principal Life Insurance Company
Attn: Group Life & Disability Claims Department
Des Moines, IA 50392-0002
- Telephonic claim submission available upon employer request.
Once I have submitted the claim, will additional information be needed?
Having the claim form completed in its entirety will assist us in our claim evaluation, as well as reduce our need to contact you for additional information. If the insured completes the online claim form or the telephonic claim form is completed by the employee, we will contact the employer to obtain additional information. The employer information must be provided by someone other than the claimant.
If your benefits are based on W-2 earnings and an employee has been employed for more than one calendar year, we ask that the employer provide a copy of the prior year’s W-2. For those employed less than one calendar year, we will need earnings for all completed months. If the claim is filed for an owner, please make sure to specify this on the form and we will contact you regarding what is needed for this situation.
For customers who have contributory coverage and are self-accounting groups, we request a copy of their enrollment form. This form assists us in verifying that an employee enrolled for coverage on a timely basis. It also shows us what coverage the insured elected.
What is the timing goal for STD claim determinations?
Our goal for adjudicating STD claims is ten business days from the receipt of the claim. In circumstances where additional information is needed to make a decision, we will pend the claim until we receive the additional information.
How often are STD benefit checks issued?
We issue STD benefits on a weekly basis in arrears. For routine maternities and some routine surgeries, we offer a lump sum payout for the approved duration period. Claims will have a payment day equal to the accrual day. For example if the Elimination Period is satisfied on a Wednesday then the payment is issued Wednesday of the next week.
If the benefit is taxable, how is this handled?
For insured business we do not automatically withhold state or federal taxes. These can be withheld at the claimant’s request. FICA tax is withheld for 6 months from the date last worked. For ASO business applicable state, federal and FICA tax are automatically withheld.
Why do you sometimes need additional information before making a decision on a claim?
To be eligible for benefits, a person must meet the definition of disability according to the insurance contract. Objective documentation such as physician’s office notes, treatment records, hospital records or a physician statement may be required. If we are waiting for information from an outside source, the decision time will depend on when the information is received.
Are benefits guaranteed once a disability claim is filed?
No. The employee must meet the definition of disability as defined by the contract. Medical information submitted must support the definition of disability and cannot be based simply on a physician’s opinion. Each claim is reviewed to determine if it meets the contractual requirements for benefit payment.
What is the timing goal for LTD claim determinations?
The claimant will be contacted with an acknowledgement letter within five business days of receipt of the LTD claim. A follow-up phone call will be made to conduct a phone interview to gather additional information. Our goal is to make the LTD decision by the later of 45 days from the receipt of the claim or by the completion of the elimination period.
If we have both STD and LTD coverage, will we need to file a second claim form for the LTD?
A new claim form is not required when moving from STD to LTD when you have an integrated disability program. Our goal is to provide integrated claim processing to streamline claim administration. Some of the features of our integrated process include: single notification of claim, one claim form, smooth and timely transition from STD to LTD whenever possible, early intervention and case management.
If the group has life coverage with us, we will also automatically review for waiver of life insurance premium benefit.
What options do employees have for receiving their LTD benefits?
Principal Life offers two monthly LTD payments options:
- Regular check - We will mail a check to the employee’s address on the benefit due date. LTD payments are made on the 10th of the month in arrears.
- Electronic Funds Transfer (EFT) - Employees can elect EFT, which allows us to transfer the employee’s LTD benefit to a bank account designated by the employee. We will transfer funds allowing sufficient time to reach the employee’s account by the benefit due date.
How do you figure the employee’s disability benefit?
The contract dictates the percent of benefit or defines a flat benefit the employee is entitled to. The benefit is calculated by multiplying the employee’s pre-disability income by the benefit percent, less income from other sources as identified in the contract. The contract may also contain a maximum and minimum benefit payable.
Can an employer pay the difference between the claimant’s salary and the disability benefit?
If there is a salary continuance offset in the other income source section of the policy then any salary continuance paid is directly reduced from the disability benefit. This doesn’t allow the employer to supplement income with salary continuance. If salary continuance is not included in the other income source definition then an employer can supplement the claimant’s income; however the weekly payment limit will limit the individual from receiving more than 100%of their Predisability Earnings.
What is integration with other income sources?
Our contract supports the integration of other income sources with the benefit the employee is eligible for. This means the employee’s benefit is reduced by the amount of income received from other income sources, such as (see the contract definition section for group specific language):
- Social Security, Employee and Family
- State Disability Benefits
- Worker’s Compensation
- Salary Continuance
All income should be reported to the claim examiner along with the type of income that is being received. The claim examiner will then consult the policy language for that client to determine if an off set is needed.
If returning to work on a part-time basis, how are part-time earnings provided?
We must receive part-time earnings information on a weekly basis for STD and a monthly basis for LTD. We will need the number of hours worked each week per month and the rate of pay. Use our form to submit this information to us via our 800-fax (800-255-6609). We can calculate the partial benefit once we receive this information. For examples of calculations, please refer to form GP55122.
What are benefit duration guidelines?
Principal Life uses several common industry resources to evaluate the length of disability, as well as our in-house nurses, physicians and outside consultants. We consider each claim to be unique and evaluate every claim individually. Additional factors are taken into consideration when applying duration guidelines, including the employee’s age, occupation and possible secondary diagnosis.
How are phone calls handled?
We have a trained, dedicated Call Center to assist with general questions. More specific questions are transferred directly to the claim examiner. This ensures that the person talking to the employee will have the most knowledge concerning the claim.
Callers also have the ability to direct dial to the specific claim examiner that has been assigned to his or her claim. Our phone system allows calls that have not been assigned to be distributed randomly by “hunt groups” to allow for continuous coverage and back-up by trained claim staff.
Who screens claims for case management?
We prioritize our claims and develop an action plan on all claims, except for normal pregnancy and claims where the employee returns to work within the expected duration guidelines. The claim analyst, nurse consultant, vocational consultant and Social Security consultant participate in this process. We believe this team approach allows us to identify the appropriate case management resources for every claim as early as possible.
Do you have a formal rehabilitation program?
We have qualified rehabilitation professionals on staff to provide rehabilitation services to our claimants. We prefer to use our in-house professionals, rather than outside vendors, as it gives us greater control over the quality of services and better outcomes on cases. We utilize vendors when there are geographical issues best handled by someone locally.
Our primary goal is to help employees return to work at their regular occupation with their employer. If this will not be possible, we work with the employee to find alternate placement through a full spectrum of vocational and outplacement services.
Do you help disabled employees apply for Social Security disability benefits?
We emphasize referrals to our onsite Social Security liaisons as early as possible. If a claim has been identified as one that might meet the eligibility requirements for Social Security, our coordinators begin working immediately to refer the file to our highly respected Social Security vendor. Our vendor works directly with employees to assist with gathering information and submitting the application. They can explain the benefits of Social Security, including Medicare coverage, retirement savings protection, cost of living increases and other benefits. Even after receiving a Social Security denial, the vendor will work with the employee on the appeal process.
What information is needed when the employee returns to work?
We ask that we be notified as soon as possible once the employee returns to work to avoid overpayment. You may reach us at 800-245-1522. We will need the employee’s name, the date he/she returned to work, and whether the employee returned to full- or part-time work.
How are maternity claims handled?
Following delivery generally these claims are paid in a lump sum. From the date of delivery 6 weeks is considered the recovery period for a normal delivery and 6-8 weeks can be certified by the physician for a cesarean section. These timeframes include any applicable elimination period that may apply.
How is prior coverage considered when the pre-x provision may apply?
If the claimant files their claim within the first 12 or 24 months of coverage with PLIC depending on the policy language, we will first determine if they had prior carrier coverage. If yes, we will determine if coverage had remained in force if the claim would fall under the prior carrier pre-x provision. If not, we will compare the plans and pay under the lesser policy. If so, we complete the pre-x investigation to determine if treatment occurred during the pre-x timeframe set out in the policy to determine if the pre-x provision will apply to the claim.
How is the STD pre-x language administered if it includes the 6 week provision?
We use the period of time from the date the claim is received through our standard service timing of10 business days to investigate if the claim is pre-existing with nothing payable during this review period. In certain situations this will result in nothing payable on the claim if it is found the claim is pre-existing during this time period.
If additional time is needed to complete the pre-existing review, and the claim is otherwise payable, we would begin weekly payments from the end of the service timing period to the earlier of: 1) the date the pre-existing review is complete or 2) up to a maximum of 6 weeks from the date of disability.
In situations where the claim is not filed timely, this may result in nothing payable while the pre-existing investigation is being completed. If the condition is not determined to be pre-existing we would pay any back benefits due and continue our normal claim management.
|Example 1||Incurred date 2/1/14||Accrual date 2/8/14||Claim received 2/12/14|
|We would review for pre-existing through 2/25/14 with no benefits payable. If additional time is needed to complete the pre-existing review benefits will begin on a weekly basis from 2/26/14 up through a maximum of 3/14/14 which is 6 weeks from the incurred date of disability.|
|Incurred date 2/1/14||Accrual date 2/8/14||Claim received 3/12/14|
|There would be nothing payable until the pre-existing review is completed. Service timing review period expires 3/25/14 and this date is already greater than 6 weeks from the incurred date of disability which ended 3/14/14.|
How are owner claims handled?
Earnings is the claimant’s share of the business income plus their compensation. The financial information needed for an STD or LTD claim would be dependent on the form of business. However, generically speaking we would need the W-2’s and the K-1 (for S-Corps and Partnerships) or first few pages of the business return (C-Corp) for the two years prior to the year of Disability.
If working ceases for disability or any other reason, do I need to notify Principal Life?
When an employee ceases to work for any reason, it is important for the employer to review the Continuation section of the applicable STD, LTD or Life insurance products you have with us. This will assist you in determining how long premiums are allowed to be continued for the employee’s benefits. With regards to Life coverage, the employer should determine if they are responsible for offering the employee the right to convert their policy to an individual policy when appropriate.
What happens to ongoing benefits if an employee is terminated or the group terminates with PLIC?
For a standard insured policy eligibility is based on the incurred date of disability. As long as coverage was in force on the date of disability subsequent employment status or group coverage ending doesn’t affect the claim. For ASO coverage, the specific termination language for that policy should be referenced.
Do premiums need to be continued during STD or LTD?
STD does not contain a waiver provision so premium should be continued while a person is receiving STD unless employment is terminated or LTD is approved. LTD premium is waived at the time the LTD claim is approved using the LTD accrual date as the effective date of the waiver.
Do you accept online enrollment information?
We do accept electronic or online enrollment information. The online system must be accessed by the employee directly through a secure login and password. The screen print must clearly show the claimant’s name, coverage, election date and effective date of coverage. A screen print of the enrollment can be forwarded for claim documentation.
Do acts of terrorism fall under the war exclusion?
Claims resulting from terrorist acts will not be declined based on the “war or act of war” provision, as long as the terrorist attack was not in a war zone or in a situation where war has been declared.
Is life premium waiver offered on every life contract?
No, life premium waiver is not included on every group life insurance contract. The employer must elect this provision as part of the employer-sponsored benefit program.
How do we apply for life premium waiver if we have an employee who becomes disabled?
A Disability Insurance Claim form must be completed and forwarded to our office. All three sections of the claim form must be completed (employer, employee and physician sections). This is the same claim form used for disability and can be submitted in the same manner as a disability claim noted above.
If we have both disability and life coverage will we need to file a second claim form for the life premium waiver?
No. We utilize the same claim form for short-term disability (STD), long-term disability (LTD) and life premium waiver. If you’ve already submitted an STD or LTD claim, you do not need to submit another form for the life premium waiver. We will automatically evaluate for other applicable coverages and begin our claim evaluation. The same disability analyst who handles the LTD claim handles the life premium waiver claim. This allows us to handle claims efficiently and effectively.
If our employee’s disability claim is approved, does that guarantee the life premium waiver claim will be approved?
No. Our standard contracts for disability and life products have a different definition of disability. Our standard LTD contract requires a member, due to sickness or injury, to be unable to perform the majority of the substantial and material duties of his or her own occupation during the first two years of the benefit payment period. Beyond the first two years, the member must be unable to perform the majority of the substantial and material duties of any occupation for which he or she is or may be reasonably qualified based on education, training and experience. The definition of disability for life premium waiver is consistent with the LTD definition beyond the first two years.
In addition, there are other provisions that apply to life premium waiver, such as the age limitation. The member must be under the age of 60 at the time of disability and must meet the definition of disability in order to qualify for life premium waiver.
Is there a time limitation for submitting a life premium waiver claim?
Yes. The contract specifies that written proof of total disability must be sent to Principal Life within one year of the date total disability begins.
When should life conversion be offered?
Anytime life coverage ends for any reason, unless the employee already has an APPROVED claim for life coverage during disability, the individual purchase rights in the policy should be reviewed to determine if/when conversion should be offered.
If an employee or covered dependent dies, when and how should we file a death claim?
We recognize how difficult it can be to lose an employee or family member. We recommend you file the Life Insurance Claim form with us as soon as possible following the death. As the policyholder, you need to complete the employer section on the Life Insurance Claim form. The beneficiary will also need to complete a portion. A certified death certificate and valid Beneficiary Designation form should accompany the claim form. Additional information may be necessary depending on the circumstances of the claim. This additional information may include, but is not limited to, an accident or official investigative report, toxicology and/or other autopsy report, trust or estate documentation or guardianship information for a minor beneficiary.
How are claims submitted?
Claims can be filed the following ways:
- Submit online by selecting the Life Insurance Claim form from the Forms Library in the Tools section on the Principal Financial Group® Website at www.principal.com
- Fax the Life Claim Form to 1-800-255-6609
- Mail to the Life Claim Form:
Principal Life Insurance Company
Attn: Group Life & Disability Claims Department
Des Moines, IA 50392-0002
Is there a filing limitation for submitting a death claim?
There is no filing limitation on submitting a death claim. However, the sooner you can submit the claim, the easier it will be for us to obtain the information needed to process the claim. Over time, it can become more difficult to obtain needed documentation and proof of loss information. It is up to the beneficiary to provide the required information to substantiate coverage and loss.
What is the timing goal for life claim processing?
Our goal for adjudicating Life claims is seven days from the receipt of the claim. In circumstances where additional information is needed to make a decision, we will pend the claim until we receive the additional information.
How are life proceeds issued?
Life proceeds are paid by check in a lump sum.
What if there is not a named beneficiary at the time of our employee’s death?
If there is no named beneficiary or the beneficiary is deceased, our contract provides us with guidance on who the proceeds should be paid to. This is called Facility of Payment.
Can the beneficiary make a funeral home assignment?
Yes, the beneficiary can assign proceeds to a funeral home. The beneficiary will need to obtain a Funeral Home Assignment form from the funeral home. This form should designate Principal Life Insurance Company as the insurance company, specify a dollar amount for the assignment and list the policy number and funeral home tax ID number. The beneficiary should sign the form.
What if there are multiple primary beneficiaries and one is deceased?
The proceeds would default to the other primary beneficiaries named.
What is needed if the life proceeds are to be paid to an estate?
We need to receive court documents of appointment before proceeds can be issued to an estate. The documents of appointment are referred to as the Letters of Administration (issued when there is no will) the Letters of Testamentary (issued when there was a valid will at the time of death). This documentation will need to name the personal representative of the estate, often referred to as the executor, administrator, executrix, etc.
What is needed if the life proceeds are to be paid to a trust?
Before paying to a designated trust or trustee, we will verify that the trust is in force and that the trustee has not changed. We need to receive a copy of the trust, which names the trustee. After receiving this documentation, proceeds will be paid to the designated trustee.
What is needed if the life proceeds are to be paid to a minor child?
By law, minor beneficiaries are incapable of giving a valid release for the receipt of any benefits paid to them.
- Whenever possible, proceeds are paid to the legal guardian or conservator of the estate of the minor. We need to receive a copy of the court order appointing guardianship, along with the claim form, before making payment of proceeds.
- If guardianship documents are not submitted, the proceeds may be paid to an interest bearing individual annuity account to be claimed when the minor reaches the age of majority.
- In some instances, the Uniform Transfers to Minor Act (UTMA) can be used to pay the proceeds. Many states have specific criteria, which must be met to utilize this option of payment. In general, Principal Life would select a custodian, who would select a bank. The proceeds are paid to the custodian and minor beneficiary and forwarded directly to the bank account.
Can a non US citizen be named as a beneficiary?
Yes. If the person doesn’t have a SS number, ITIN, or EIN and interest is payable, up to 30% of the interest may need to be withheld as foreign backup withholding depending on where the beneficiary resides and our tax treaty with that country at that time. If a portion of the interest is withheld, the beneficiary may be able to obtain a Tax Id Number (TIN) and provide us with a W-8BEN within the same calendar year in which the interest was withheld to retrieve the withheld interest. That too is dependent upon our tax treaty and we would advise the beneficiary of their options when payment was made. NOTE: Payment to citizens or residents of a foreign country would be subject to OFAC sanctions.
Are Life Insurance Proceeds Taxable?
It is our understanding that life insurance benefits are not considered taxable income; however we encourage beneficiaries to speak with a tax advisor to answer this question.
How can a Critical Illness claim be filed?
A claim can be filed the following ways:
- Claim form from the Forms Library or Virtual Supply
- Fax: 1-800-255-6609
- Mail: Principal Life Insurance Company
Attn: Group Life & Disability Claims Department
Des Moines, IA 50392-0002
How can a CI-Wellness claim be filed?
The same way a Critical Illness claim is filed with the addition of an online submission option.
What is the CI-Wellness benefit?
This is a flat $50 benefit that can be payable once per calendar year per household (Member and Dependent Spouse) for receiving one of the eligible screening tests listed in the policy.
How is the pre-existing provision applied?
If the Member or Dependent incurs a Critical Illness within the first 12 months of coverage a preexisting review will be completed. The review will focus on the time period specified in the policy prior to the effective date of coverage. The standard language is 6 months prior to the coverage effective date. If a person was seen by a physician during this period or taking medication for the illness they have filed a claim for, the condition will be deemed to be preexisting.
Is a Critical Illness Benefit or Critical Illness-Wellness Benefit taxable?
The taxability of the Critical Illness benefit and CI-Wellness benefit depends on how the premiums were paid by the employer. If the premiums were paid with pre-tax dollars then the benefit is taxable. If the premium is paid with post-tax dollars then the benefit is non-taxable. If the premium is a mix then only the portion paid with pre-tax dollars is taxable.
Can we pay multiple Critical Illness claims?
Yes, benefits will be payable if the Critical Illness is Incurred more than 12 months after the preceding illness. If the additional claim is a recurrence of the same Critical Illness, a 12-month treatment free period is required. The waiting period and treatment free period can vary (90 days - 24 months).
How do we determine if it’s a First occurrence or an additional occurrence?
The claims department will review the medical documentation which should identify when the definition of Critical Illness was met. For the First Occurrence this will be the first time the Member or Dependent meets the definition of Critical Illness while insured under this Group Policy.
What is considered treatment free when a second claim is filed?
Medical care including medication for active disease is considered treatment. If a Member or Dependent has a routine follow up appointment or is taking medication for preventative purposes in the absence of disease this is not considered treatment.
Is there a maximum lifetime benefit?
Yes, a Member and each covered Dependent can receive up to 200% of their Scheduled Benefit.
If death occurs suddenly due to a Critical Illness is a benefit payable?
No, the policy requires that the Critical Illness be diagnosed while the Member or Dependent is alive. The reason is Critical Illness insurance is intended to help cover expenses associated with a Critical Illness. When an individual immediately dies from a Critical Illness they aren’t likely to have these expenses and would rely on their life insurance at that point.
Can critical illness benefits be assigned?
No, Critical illness insurance is not a medical reimbursement product. It does not pay for medical treatment or procedures. Since it is paid directly to the Member, it can be used in any way. Assigning the benefit to a provider or employer would be contradictory to how the product is filed with regulatory agencies and may have tax implications.
What is the difference between Cancer One and Cancer Two?
Cancer One cancers tend to be life threatening types of cancers that have metastasized (spread) and require surgery, radiation and/or chemotherapy, while Cancer Two cancers typically aren’t life threatening and are in the early stages or contained to the origin site.
|IN17640 - 04/2006|