When the dust settles: it may be years before insurers see the last of the disability claims related to Sept. 11. (Life/Health).

A persistent cough and burning, irritated eyes constantly remind Jason and Johanna Schlossberg of the lingering clouds of dust and smoke that blanketed their New York City apartment for several months following Sept. 11. The Schlossbergs, like thousands of people whose homes are near ground zero, are experiencing a variety of health problems as a result of the World Trade Center collapse.

A recent survey by the New York City Department of Health and the Centers for Disease Control and Prevention found that half of 414 surveyed residents living near the World Trade Center site continue to experience physical symptoms--such as nose, throat and eye irritations--that are likely related to the attacks.

In addition, researchers predict that many residents, employees working near ground zero and people throughout the country who were traumatized by the events may experience behavioral health conditions, such as posttraumatic stress disorder, in the coming months and years.

While the Schlossbergs' health problems haven't caused them to miss much work or to file disability claims, insurers are waiting to see if there will be many more disability claims stemming from Sept. 11. While some anticipate that such claims, including mental-nervous claims for various behavioral health and psychiatric-type conditions, may arise in the near future, others do not expect many more claims.

Health Problems Rise

According to a recent report by the Natural Resources Defense Council, a nonprofit environmental organization, huge clouds of debris and dust released hundreds of different contaminants into the air on Sept. 11, with "short-term health impacts for at least 10,000 persons." Many residents living near the World Trade Center site have reported nosebleeds, persistent coughs, asthma-related conditions, headaches and more serious illnesses.

Like the Schlossbergs, Elizabeth Story-Maley and her family lived in the shadow of the towers and are now experiencing a variety of respiratory and chronic health problems. "I can't prove the events are related, but if you look at our previous health records, I just can't understand how my son and I can suddenly develop asthmatic problems when we never had such problems prior to that time," she said. "It's just too much of a coincidence."

Immediately following Sept. 11, Story-Maley's then 8-month-old twins suffered from several health problems, including her daughter's bout with stridor, a sign of upper airway obstruction, and her son's continuous inhalation and asthmatic problems. In addition, Story-Maley has suffered several asthma attacks and continuous inhalation difficulties during the past several months.

While the Environmental Protection Agency assures New York City residents that the air quality in and around ground zero is safe, many residents are skeptical. In September 2001, EPA Administrator Christine Whitman announced that ongoing monitoring of drinking water in New York City provided additional reassurance that city residents are not being exposed to dangerous contaminants, including asbestos, radiation, mercury and other metals, pesticides and bacteria. But some officials and politicians have refuted those claims, as well as the EPA's reassurance that the air quality in lower Manhattan is safe.

Medical experts predict that it will take several years to assess the damage to residents' health, and public health specialists are only beginning to study the effects of these conditions. The federal government is expected to make about $10.5 million available to finance medical and health studies and worker environmental training related to Sept. 11.

Anticipating Claims

While insurers so far have seen only a handful of disability claims as a result of Sept. 11, many are saying the full number of such claims is the "big unknown." Health-related problems and mental-nervous conditions are predicted to hit hundreds or thousands of residents across the nation, mostly in New York City.

Hartford Financial Services, which already has seen some claims activity as a direct result of Sept. 11, is sure it hasn't seen the last of these claims. The majority of disability claims filed with the company since Sept. 11 have been closed, but a few claimants remain out of work on long-term disability claims.

New York City-based Metropolitan Life Insurance Co. also continues to see some claims activity from those affected by the tragic events. Of these claims, 35% percent were filed by individuals present at the World Trade Center site, 35% were from people employed near the site, a handful were from individuals who lost family or friends in the tragedy, and a small number of claims were from people who had no connection to the terrorist attack but said Sept. 11 was the reason for their missed workdays, said Dr. Ronald Leopold, vice president and national medical director of disability

Some insurers, such as UnumProvident, put aside reserves for anticipated Sept. 11-related claims. Chattanooga, Tenn.-based UnumProvident, the nation's largest disability income protection insurance writer, put up nearly $10 million in reserves to cover its individual disability exposure, with another $7 million to cover its group disability business. Tom White, vice president of corporate communications, said the company estimated its Sept. 11-related claims at $65 million before reinsurance recoverables, including $30 million in disability claims.

Blue Bell, Pa.-based PMA Insurance Group, on the other hand, believes that the industry has seen nearly all of the claims it will receive as a result of Sept. 11. "I'd be surprised if we see many additional claims, because enough time has elapsed now that I think if it was going to happen it would have happened in October, particularly with the anthrax situation," said Leo Tinkham, vice president of integrated disability and workers' compensation at PMA. "We don't expect to see another bout [of claims] unless circumstances warrant them."

Asbestos Exposures

Insurers also are wondering what the extent of their asbestos exposure will be over the long term, said Pat Teufel, partner in charge of actuarial services for the professional services firm KPMG LLP. "It is well documented that asbestos was in the WTC building and was released with the collapse of the towers," she said. In addition, other potentially hazardous substances, including fiberglass, pulverized concrete and acrid smoke, were released in dust clouds following the collapse. Workers and residents who are exposed on a daily basis are concerned about what the continuous exposure may mean for their health in the future, Teufel added.

Between Sept. 11 and Jan. 22, the EPA collected and analyzed 4,946 air samples in lower Manhattan in search of airborne asbestos. Thirty-one of the samples exceeded the Asbestos Hazard Emergency Response Act standard, which is the most protective indoor air standard to test for asbestos in the outdoor air. Exposure to asbestos, a fibrous mineral often used in building insulation, including parts of the twin towers, is associated with the health effects of asbestosis, or scarring of the lungs, and cancer.

While experts believe that the likelihood of developing diseases from short-term, low-level asbestos exposures associated with the World Trade Center collapse is low, workers cleaning up the site are believed to be at greater risk due to the duration and intensity of their exposure.

Low Health Risk

In a recent panel of the American College of Preventive Medicine, Dr. Stephen M. Levin reported that for the vast majority of people exposed to asbestos--such as those who ran through dust clouds as the buildings collapsed or those exposed while cleaning debris from their homes or offices--the risk of ever getting sick was "very, very small," according to a recent article in The New York Times. "It's not a zero increase in risk, but it's not a magnitude of risk that I think people ought to be terrorized by or fearful of on a day-to-day basis," said Levin, medical director at Mount Sinai School of Medicine's Irving J. Selikoff Center for Occupational Health and Environmental Medicine.

But some insurers indicate they will keep a watchful eye on the possibility of asbestos exposure related to Sept. 11. Because asbestos generally has a latency of 20 to 25 years, it is too early to predict what effect its exposure will have on residents and workers and the potential rise of disability-related claims stemming from the fibers.

Mental-Nervous Claims

The number of disability claims for mental-nervous conditions has been lower than many insurers anticipated. While researchers predict more behavioral health problems will arise from the events, insurers are waiting to see if such disability claims also grow.

An estimated 90,000 people in lower Manhattan surveyed in random telephone interviews reported having symptoms consistent with a diagnosis of post-traumatic stress disorder or clinical depression five to eight weeks after the Sept. 11 attacks, according to a recent report in The New England Journal of Medicine. Another 34,000 met the criteria for both diagnoses. Overall rates of posttraumatic stress and depression found in the study were two to three times as high as those normally found in any given year.

Another study conducted by the New York City Department of Health and Centers for Disease Control found that almost 40% of residents living near ground zero had symptoms of post-traumatic stress disorder. In addition, New York City mental health emergency hot lines received twice the average number of calls following the attack.

Some insurers are beginning to see some mental-nervous case files trickle in from New York City residents and others throughout the United States. For example, a Texas woman, suffering from post-traumatic stress disorder caused by the trauma of flying on Sept. 11, filed a disability claim Oct. 1 with MetLife. Nearly 75% of claims filed with the company are linked to some type of psychiatric condition, particularly post-traumatic stress disorder, caused by Sept. 11 events. But the number of such claims filed with MetLife was lower than the company had anticipated.

MetLife believes, however, that additional mental-nervous claims may be filed in the near future. "It is possible that this current six- to 12-month period following Sept. 11 will bring an additional uptick of claims," Leopold said.

Cigna Group Insurance, based in Philadelphia, also has seen fewer behavioral health claims than it anticipated. "We were prepared for an influx and did a lot of preparation to ensure we could provide the fastest and best resolution and management of such claims," said Dr. Barton Margoshes, vice president and chief medical officer. For the two months following Sept. 11, Cigna saw an increase of 9% in mental-nervous claims, the majority including acute anxiety, depression and phobic disorder diagnoses, compared with the same time one year ago. For the six-month period after the events, there was a 7% increase for these claims compared with the same time a year earlier.

"While post-traumatic stress disorder has been around for a long time, typically after catastrophic events and wars, it's anticipated to be seen again now with Sept. 11, which was one of the most severe traumas anyone could witness," said Barbara Swiecki Campbell, director of claim operations and best practices at Hartford Financial. Many of the post-traumatic stress disorder claims filed with the company include individuals suffering from nightmares, social contact avoidance and survivor guilt, in which sufferers question why they survived an event when others weren't as fortunate.

The availability of numerous community resources, including the Red Cross and local hospitals, was the reason Hartford has received fewer post-Sept. 11 disability claims than expected, Campbell said. Those efforts helped people overcome their mental-nervous conditions associated with the terrorist attacks.

Disability insurers are more cognizant of the connection and issues associated with behavioral health and disabilities as a result of the events of Sept. 11, said Veronica Hellwig, senior consultant with the global consulting firm Watson Wyatt. "They are now beefing up staff in areas, such as having nurse case managers who can triage and manage behavioral health claims to manage lost time," Hellwig said. Disability carriers now recognize that to manage risks they have to be able to manage behavioral health issues, particularly since the World Health Organization estimates that by 2020, severe depression will be one of the top three causes of death and disability, she added.

Because many psychiatric conditions may take weeks, months or even years to develop, insurers cannot accurately predict the future of mental-nervous claim activity.

MetLife, Cigna, Hartford, UnumProvident and PMA are some of the insurers that have worked closely with employer-assistance programs and health-care providers to help individuals out on disability return to work. The role of employer-assistance programs increased tremendously after Sept. 11. UnumProvident, for example, saw a 63% increase in employer-assistance programs and counseling services for its customers during the week of the events.

Immediately following the disaster, Cigna Behavioral Health, a specialty company of Cigna Corp., aided customers and noncustomers by establishing a toll-free number for anyone suffering from a mental-nervous condition. Consumers who called the number were connected to behavioral health specialists for employer-assistance programs or counseling assistance.

"The biggest concern to individuals was not knowing what the process was, and we helped by explaining to them exactly what was going to happen, what they needed to do, what their doctor needed to provide us in order to process their claim and what their doctor's rules were about the claims process," said Margoshes.

Hartford, which has always had employer-assistance program services as part of its product offering, believes Sept. 11 showed employers the importance of these employee-support services. "Employers are now likely more interested in these programs and will be looking to identify the positive impact we've had as a result of the events," said Campbell.

Disability Sales

Sales of disability insurance also have risen since Sept. 11.

"We've definitely seen some changes in sales patterns over the past several months," said PMA's Tinkham. "After Sept. 11, September and October business opportunities practically evaporated." He attributes this to both the destruction of the World Trade Center offices of Marsh and Aon, major distributors for many carriers, and an increased anxiety and uncertainty during the 60 days following the attacks.

"However, this has since reversed itself, and sales activities have returned to normal," Tinkham said.

Coveted Commodity

MetLife's Leopold believes disability insurance is going to be a more coveted commodity as a result of Sept. 11. "We're living in an era where there is a lot more uncertainty than there used to be, and, therefore, people are more apt to buy life insurance, and some--but to a lesser extent--disability insurance," he said. "I think that is going to put greater value on the product line."

One area that some insurers explored immediately after the events was the possibility of adding terrorism or war exclusions to their disability policies. "I'm not aware of any carrier that has added terrorist exclusions to their disability policies or put in load factors or increased prices because of the terrorist attacks," said Tinkham. "Given the competitive climate in our industry, some carriers are reluctant to raise prices, but prudent carriers must still take into consideration the extreme exposures associated with terrorism or similar acts and situations."