People who qualify for benefits under a private disability policy are sometimes denied by Social Security, and the reverse also happens. The two systems apply different definitions of disability.
The federal definition is framed around any work
Social Security disability requires an inability to engage in substantial gainful activity because of a medically determinable impairment expected to last at least a year or result in death. The impairment must be documented medically.
The question is not whether the claimant can return to a former occupation. It is whether any substantial work existing in the national economy can be performed.
That framing is deliberately restrictive, because the program is intended for people unable to work rather than people unable to continue a particular career.
The evaluation proceeds in steps
Adjudicators work through a sequential evaluation, beginning with whether the claimant is currently working above the earnings threshold. Earnings above it generally end the inquiry.
The next steps consider whether the impairment is severe, whether it meets or equals a listed impairment, and whether past work can still be performed. Only then is other work in the economy considered.
Age, education and transferable skills enter at that final step. The framework treats an older claimant with limited transferable skills differently from a younger one.
Private policies usually ask a narrower question
Individual disability policies frequently define disability by reference to the insured's own occupation, at least for an initial period. That is a materially easier standard to satisfy.
Many group policies shift after a defined period from an own-occupation test to an any-occupation test, which moves closer to the federal standard without matching it. The transition point is stated in the contract.
Because the tests differ, an approval under one system is evidence but not a determination under the other. Each decision is made on its own terms.
Why private insurers care about the federal claim
Group long-term disability policies commonly offset benefits by amounts received from Social Security. The insurer's payment falls as the federal benefit rises.
That is why insurers often require claimants to apply, and sometimes provide assistance with the application. The assistance serves the insurer's interest as well as the claimant's.
Retroactive federal awards can create an overpayment under the private policy, which the insurer will seek to recover. The policy language sets out how.
Where the process leads
Initial federal decisions are frequently denied, and the appeal path runs through reconsideration, a hearing before an administrative law judge, and further review. Deadlines at each stage are short.
Medical documentation and functional evidence carry more weight than narrative descriptions of difficulty. The record is what the decision is made on.
Program rules, earnings thresholds and procedures change over time, and private policy terms vary. An attorney experienced in disability claims, or a licensed agent for the policy itself, is the appropriate next step.