Insurers are pushing unqualified applicants for disability benefits into the Social Security system, according to critics quoted today in a New York Times article.

A “flood of referrals” from insurers is making it difficult for the Social Security Administration to help people who are truly disabled, Kenneth Nibali, a former administrator of the Social Security disability program, told the Times.

Forcing individuals who don’t meet the criteria for being in the Social Security Disability Insurance program into the SSDI system holds up payments to individuals who need benefits, Nibali says.

Insurers quoted in the article insisted, however, that they were handling disability claims in a fair and legal way.

The average wait for applicants waiting for hearings on Social Security claims by an administrative law judge is 512 days, the Times reports.

SSA officials estimate the SSDI trust fund could run dry by 2026, the Times reports.

Insurers whose claimants are accepted by Social Security can take much or all of benefits costs off their rolls, transferring the costs to the government, industry critics told the Times.

The Times refers to lawsuits brought by people who allege that some insurer claim-referral practices constitute deliberate fraud, which would violate the federal False Claims Act.

Unum Group Corp., Chattanooga, Tenn., a company cited in one of those suits, responded by calling the article “biased toward the viewpoint of the plaintiff’s attorney.”

Unum says there is no merit to the case, company spokesman, Jim Sabourin says.

Most American workers pay Social Security insurance premiums, and they have a right to have their disability claims reviewed, Sabourin says.

“The impact of what the plaintiff’s attorney is seeking would be that many people who receive Social Security disability benefits today would no longer even be able to apply,” Sabourin says.

Unum is helping the SSA to develop a program to expedite disability reviews for claimants with the most severe conditions, Sabourin says.

Dan Allsup, communications director for Allsup Inc., Belleville, Ill., contends that some SSDI representation firms make a significant effort to screen disability insurance applicants to see if they qualify for SSDI.

Allsup Inc. helped 275 insurers and 500 self-insured employers screen about 50,000 disability applications in 2007. The company also represents many individual insureds in SSDI proceedings.

“Major insurers that use companies like ours are depleting the [SSDI processing delay] problem, not adding to it, because they keep dubious claims from getting to SSDI,” Allsup says.

“Companies like ours that work with insurance carriers and self-insured employers are doing the opposite of overloading the system,” Allsup says. “When [insurers] ask us to look at their policyholder claims for disability insurance, we do a thorough screening, and if it appears to us the claimant does not qualify for SSDI benefits, they do not even apply to Social Security. The vast majority, probably 60%, we never represented [to SSDI] because they did not meet SSDI’s rigid requirements.”

Karen Ignagni, president of America’s Health Insurance Plans, Washington, says the Times article is “laced with inaccuracies.”

AHIP is planning to provide data for the Times and other groups “about how the system actually works vs. what was suggested in the article,” Ignagni says.

AHIP also is preparing to issue a more comprehensive response by the end of the day Wednesday, Ignani says.