Largest Private Disability Insurer Found Fraudulent

Ever wonder why it often takes over two years before claimants are approved for Social Security Disability benefits?  An October 23, 2008 New York Times article is shedding some light on the issue.  The story is about a Federal court case in Boston.  The nation's largest private disability insurer, Unum, has been found guilty of fraud because the company asks people who qualify for their private disability benefits under Unum's policies to apply for Social Security Disability benefits - even if the claimants have no chance of qualifying!
Private companies like Unum and Cigna make this requirement with the hope that the federal government will pick up their tabs.  Most private policies have language that gives these companies a dollar for dollar credit against Social Security disability benefits.  For example: If Unum owes a disabled policy holder $1300 per month, but that same individual begins to collect $1000 a month in Social Security disability benefits, then Cigna will only have to pay $300 per month to their policy holder.  I have seen in the past where these private companies will actually send their policy holder a bill if they learn someone collected a check for past due disability benefits.  The companies also benefit from forcing the disabled to apply for Social Security disability because it allows them to lower their reserves (increase their profits) while their beneficiaries are waiting for decisions from the Social Security Administration.
There are many reasons why it takes so long to navigate the Social Security disability process (like Social Security's limited funding and staffing).  However, delays are worsened when large insurance companies insist on trying to pass off their liabilities onto the Federal government.  Let's hope the government sticks to its guns on this issue and works hard to prevent obviously able-bodied applicants from clogging up the system.