NOSSCR Board of Directors

The National Organization of Social Security Claimants Representatives (NOSSCR) has published the list of its Board of Directors for the next year.

Fancy OIG Report: Convictions and 1099s to Attorneys

Social Security's Office of Inspector General (OIG) has issued its Fall 2005 Report to Congress, an elaborate full color document produced and, presumably, printed at what must have been considerable cost.

OIG is proud of achieving 2,159 convictions in fiscal year 2005, although no details are given on the nature of the charges.

One OIG recommendation mentioned in the report as not yet having been complied with may be of particular interest to attorneys who represent Social Security claimants:

Recommendation: We recommended that SSA collect each attorney’s SSN, name and address information so that IRS Form 1099 can be issued to attorneys.

Agency Response: SSA’s Executive Task Force is addressing the issue of providing IRS Form 1099 to attorneys and is developing a business process for issuing these forms.

Corrective Action: SSA must develop the automation support necessary to meet the Internal Revenue Code requirement that SSA issue Form-1099s to attorneys who receive attorney fees of $600 or more in a taxable year. The Attorney Fee Task Force has established a revised target of issuing Form-1099s toattorneys to January 2008 (representing attorney fees received during TY 2007). SSA has initiated planning and analysis required for development of the systems enhancements to collect and process the appropriate attorney data required for issuing the Form-1099s. Implementation of the attorney database is planned for the fall of 2006.

More on California LTD Insurance Litigation

I have been unable to find a copy of the order that brought about the litigation between the insurance industry and the California Department of Insurance, but there is a history of conflict over Long Term Disability (LTD) policies in California.

In February 2004 the California Insurance Department issued a letter banning discretionary clauses that gave LTD insurers nearly unfettered discretion in interpreting the meaning of disability in LTD insurance plans on the grounds that this sort of plan was "unsound insurance."

In October 2005, the California Department of Insurance settled a lawsuit with Unum-Provident, the nation's largest writer of LTD insurance. Under the settlement Unum-Provident was hit with a $8 million fine for knowlingly applying the wrong definiton of disability and for abuses of independent medical exams.

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.

California Insurance Commissioner Tries to Stop LTD Offsets

An article in the Sacramento Business Journal reports that an association of insurers has sued to block California Insurance Commissioner John Garamendi from implementing a proposal to impose limits on the types of Long Term Disability (LTD) Insurance that could be sold in California. One element of Garamendi's plan is a prohibition on reducing LTD benefits on account of Social Security disability benefits. According to the lawsuit, Garamendi's proposals would increase costs for group LTD by as much as 46% and for individual LTD policies by as much as 33%.

Backlog in Office of Regulations

Social Security is required to post in the Federal Register every six months a statement showing all proposals for new regulations currently under development. Social Security's most recent Regulatory Agenda showed 45 regulatory proposals that had already been published in the Federal Register. The comment period had long since expired on most of these. Many of these proposals dated back several years. One first appeared in the Federal Register in 1997! It looks as if SSA's Office of Regulations suffers from the same staff shortages and backlogs that afflict the rest of SSA.

The backlogs at SSA's Office of Regulations have potential consequences for two recent major regulatory proposals, Commissioner Barnhart's proposal to revamp disability determination and the proposal to add two years onto each of the age categories of the grid regulations. There were over 800 comments on the Commissioner's proposal. That is a lot of paperwork to wade through to produce a final set of regulations. There are reports that Barnhart wants her proposal finalized by Spring 2006. Certainly, she can order the Office of Regulations to give priority to her proposal, but Spring 2006 may be a hard goal to meet even with pressure from the Commissioner. How high a priority SSA places on the age category proposal is unclear. The proposal indicates that there will be major savings if the proposal is adopted, so there may be pressure from the Office of Management and Budget to adopt the change, but a badly backlogged Office of Regulations could easily cause delays in adoption of this rule.

Significant delay could push implementation of either proposal past the next Congressional election and January 2007, when Barnhart's term in office ends.

Going Paperless

Making the transitition to a "paperless" practice is a hot topic among attorneys who represent Social Security claimants. The National Organization of Social Security Claimants Representatives (NOSSCR) has posted an excellent piece by Charles Martin of Decatur, GA on Using the Electronic Folder with Adobe® Acrobat® Professional: Miscellaneous Tips.

Inspector General Report On Itself

Social Security's Office of Inspector General (OIG) has issued a Performance Report on itself. Not surprisingly, OIG gives itself high marks.