As the Long Island Rail Road began warning its workers not to file fraudulent claims for private disability insurance, interviews with insurers this week revealed a fuller picture of how some of the railroad’s retirees and current employees have been able to collect an array of disability payments.
At least five federal and state agencies are investigating the legitimacy of disabilities at the L.I.R.R., where in recent years more than 90 percent of career employees have retired early and claimed disability payments from the federal Railroad Retirement Board. But many of the railroad’s workers also secure disability policies from private insurers that routinely exclude applicants with pre-existing conditions.
Nearly a quarter of the 6,800 current L.I.R.R. workers have bought private insurance through payroll deductions, and in the last five years, more than 300 employees and retirees have filed claims on policies from Aflac and other insurers, according to L.I.R.R. and Aflac officials. On top of payouts for salary loss, some of the private policies also pay car loans and credit-card balances and waive life insurance premiums.
According to one of the brokers who sold most of the private policies, the payroll deductions date to 1998, when rail unions asked L.I.R.R. management to set up the system. The railroad has also allowed insurance agents to walk the tracks and visit its lunchrooms. In addition, at a hearing last month on Long Island, the railroad’s president, Helena Williams, testified that some managers had, without authorization, improperly signed insurance forms allowing workers to collect on private disability policies.
It was against that backdrop that the railroad on Thursday inserted notices in employees’ paychecks saying, “Any employee found to have filed a baseless claim for disability benefits, offered incorrect or misleading information in support of a claim, or assisted another in filing such a claim, is subject to discipline, up to and including termination of employment.”
Since The New York Times first reported on the L.I.R.R. disability epidemic in late September, the railroad has cracked down on the private insurance brokers, ejecting one from railroad property and directing management to treat them as trespassers if discovered on railroad property. This week, railroad officials said that a Metropolitan Transportation Authority police officer issued a citation on Oct. 20 to one of the agents for illegal soliciting in Pennsylvania Station.
That agent, Norman B. Meyerowitz, said in an interview this week that an employee had asked him into the trainmen’s room to talk and that another had asked him for a brochure in the hallway. “I went down there to meet them like I have a million times before,” he said.
Mr. Meyerowitz, 51, of Fair Lawn, N.J., said he and other insurance agents provided a valuable service in short-term disability policies for union employees whose job benefits for illness, pregnancy or off-the-job injury are limited to sick leave, vacation and a short period at a reduced salary.
“They’re completely exposed, completely vulnerable,” he said. “I’m meeting people on their own time off the property right now.”
He added: “If the Railroad Retirement Board is rubber-stamping their disabilities, what does that have to do with me? Our policies are based on legitimate medical representation, X-rays, M.R.I.’s and medical evidence.” (Records indicate that the federal retirement board approves 98 percent of all disability claims.)
The other leading private insurance agent for L.I.R.R. workers, Barry D. Ellis, 61, of Valley Stream, N.Y., said in a separate interview: “This whole thing is whacked out. They may have a problem with the retirement system, but trying to throw this short-term disability into the mix, I don’t believe it should be.”
The Aflac policies can pay $500 to $5,000 a month for up to two years. Nationally, the federal disability payments average $3,000 a month.
Workers who plan to apply for the federal payments generally try to present evidence that they have seen doctors for back problems or other conditions in the months and years before retirement. But that practice has raised questions among investigators, since many of the workers also buy private disability policies that disqualify people with pre-existing conditions.
In taped testimony at the hearing last month, an orthopedic doctor, whose identity was shielded, said about half of his patients who applied for Railroad Retirement Board disability benefits also sought private insurance benefits.
At the same hearing, William E. Capps, manager of Aflac’s special investigations unit, testified that he began investigating 311 disability claims by L.I.R.R. workers for $4.1 million in the past five years after noticing that many of them had been filed near retirement and certified by the same doctors.
An Aflac spokeswoman, Laura Kane, would not be more specific this week, saying the matter was still under investigation. She said Aflac was cooperating with investigators from the state attorney general’s office and the Insurance Frauds Bureau of the State Insurance Department. “I would imagine that depending on the findings we would certainly prosecute for fraud,” she added.
Another insurance company, TransAmerica, said it stopped selling new disability policies to L.I.R.R. workers early this year.
Topic: Insurers Detail Rail Workers’ Path to Disability Pay (Read 451 times)