Suits claim insurers clog Social Security

WASHINGTON, April 1 (UPI) -- Routine referrals from insurers to the U.S. Social Security system cost millions and clog the system, lawsuits filed against disability insurers claim.

Disability insurance companies can reduce payments to clients dollar for dollar if they are accepted for government disability benefits. They can also put less money in conservative investments, set aside for payments, if the clients apply for Social Security, The New York Times reported Tuesday.

Lawsuits filed against Cigna Corp. and Unum Group claim the companies force clients to apply for workers' compensation or government disability checks frivolously. The companies reportedly know the government's definition of disability is more stringent than their own but force the clients to apply anyway, the Times said.

"Anybody who is forced to come into this system and who doesn't need to be there is affecting someone else," said former Social Security Administrator Kenneth Nibali.

It costs the government between $1,180 and $4,759 to screen an applicant for disability benefits, Nibali told the Times.

The wait for a hearing from an administrative law judge has grown from 258 to 512 days since 2000, while the number of cases has doubled since that time, the Times said.