New POMS: LTD Representers May Face Discipline If They Do Not File Fee Petitions

Social Security has recently issued a POMS (Program Operations Manual Series) change entitled Conduct Subject to Suspension/Disqualification to list circumstances that might justify suspension or disqualification of an attorney or representative. The issuance includes the following language that may affect representatives who have worked on behalf of long term disability (LTD) insurance companies:

A claimant has a private insurance policy that pays him benefits when he is unable to work. The insurance company informs the claimant that the terms of the policy require that the claimant file for title II DIB. The claimant receives assurances that the insurance company will provide, at no charge, a representative who will represent him before SSA. The claimant agrees to this representation. Later, SSA awards the claimant title II DIB. The representative informs SSA that he or she is waiving his or her fee in this representation. Following the terms of the policy, the claimant notified the insurance company about the award of title II DIB. The insurance company then paid the representative $5,300 for his representation of the claimant before SSA. Next, the insurance company deducted $5,300 from the claimant's insurance policy benefits. The representative and the insurance company have not acted in accord with the regulations described in GN 03970.010B. based on knowingly charging, collecting, and retaining a fee in excess of that authorized by SSA, and knowingly making a false or misleading statements, assertions, or representations about a material fact or law concerning the $5,300 fee which only SSA can authorize.