The North Carolina Senate is considering regulating for-profit companies that make money by charging veterans for help when they apply for federal benefits.
The regulations are part of Senate Bill 693, titled “Veteran Access, Liberty, Options for Recovery.” The proposed legislation comes as many claim companies, including one based in Pinehurst, have received cease and desist letters from the U.S. Department of Veterans Affairs for operating outside federal law.
According to federal law, agents and organizations not accredited with the VA cannot charge veterans for assistance in filing for benefits. But the law doesn’t include criminal penalties for charging veterans for such services. Unaccredited, for-profit claim companies continue to operate, creating what The Washington Post called an “unregulated shadow industry.”
SB693 aims to provide protections for veterans contracting with these companies. The bill would prevent those seeking compensation for helping a veteran file for benefits from “aggressively” targeting veterans and accessing a veteran’s passwords and medical information. It also says companies cannot seek medical exams for a veteran’s disability claim from medical professionals with whom the companies have employment relationships.
The bill would also require contracts between claim companies and veterans to include a disclosure that states the company isn’t sponsored by the VA, and that sponsored organizations can provide claim services for free. Companies must print the disclosure in 12-point font and display it in a “readily noticeable and identifiable place,” according to the bill’s text.
“You can look at it like a consumer protection sort of thing,” Sen. Val Applewhite, a Democrat representing Cumberland County and one of the bill’s secondary sponsors, told CityView.
Republican Sens. Danny Earl Britt, Jr. and David W. Craven, Jr., and Senate Majority Leader Michael V. Lee are the bill’s primary sponsors. On May 6, SB693 passed the three readings in the N.C. Senate needed before being sent to the N.C. House.
SB693 is a step in the right direction to protect veterans from being cheated by the claim companies, said Ann Provencher, president of the Cumberland County Veterans Council. However, she wishes the bill would include additional information in the disclosure required from companies. Provencher wants the disclosure to include where free claim resources are available in a given veteran’s county, and a statement saying that the companies can’t guarantee an increase in benefits, a claim she says they often make to get veterans to use their services.
“Will it stop everybody from using them [the claim companies]? No,” said Provencher, who retired as a specialist from the Army Reserves and National Guard. “But at least they’re making an informed decision.”
Applewhite said, in addition to passing SB693, more needs to be done to protect veterans from being taken advantage of by claim companies.
“This is a step in the right direction, at least for these companies to know, in North Carolina, we’re paying attention to you,” Applewhite said. “They’re going to push back, but now we are watching.”
‘The system is broken’
Applewhite is one of the many veterans who have used claim companies to help them obtain benefits.
Applewhite is a disabled veteran, having served for 20 years in the Air Force. For years, she said she struggled to reach the 100% disability rating she knew she qualified for through the free, VA-accredited resources. The VA assigns a rating, from 0% to 100%, based on the severity of a veteran’s service-related disability. The higher the percentage, the more the disability decreases a veteran’s overall health, and the higher the monthly disability payment.
Based on a friend’s recommendation, Applewhite turned to Veterans Benefits Guide, a Nevada-based for-profit claim company, to help her file for a disability rating.
Veterans Benefits Guide got Applewhite to 100%, but its services came with a $5,000 bill. The cost was relatively low compared to what other veterans have paid. Navy vet Jim Peckey was asked to pay $10,000 to Texas-based VA Claims Insider, according to The Texas Tribune. Eric Bearn, a retired Army intelligence officer, had to pay over $21,000 to Veterans Guardian, a Pinehurst-based claim company, according to The War Horse.
“I am glad that I could write the check and move on. But to have other veterans who need support, who don’t have the ability to pay, there’s something inherently wrong with that,” Applewhite said. “The system is broken. We need to fix it so no veteran has to pay money to be compensated for the disabilities or injuries they’ve sustained by defending this country.”
Under SB693, claim companies cannot charge veterans more than five times the one-month increase in their benefits. Companies cannot bill for their services unless a veteran’s benefits increase, and cannot charge an initial fee for service.
However, for veterans without dependents who go from 0 to 100% disability using a claim company, the legislation still means they could pay over $19,150 for the services.
One reason veterans turn to claim companies is because the benefit process is so burdensome, especially on older veterans, Provencher said. While free, VA-accredited resources exist, their availability is limited. Veteran service officers (VSOs), working through organizations like Veterans of Foreign Wars of the United States, provide claim consulting for free or a small fee that can be disputed. North Carolina has just 8,206 accredited VSO representatives to serve the over 618,800 veterans in the state, according to the VA website and data compiled by Deloitte.
Both Applewhite and Provencher said many VSOs in North Carolina need additional and better training to effectively help veterans apply for benefits. Applewhite said her agent from Veterans Benefit Guide was shocked that none of the VSOs she previously worked with could get her to 100% disability.
“He was like, ‘We almost hate to have you pay for this because this is the most clear case of 100% [disability] if we’ve ever seen one,’” Applewhite recalled.
While Applewhite is sponsoring SB693, she said more VSOs are the long-term solution to the problem of for-profit claim companies and is continuing to advocate for their increase in North Carolina.
“If today we could snap our fingers and say, ‘We don’t even need these companies anymore,’ that would be great,” Applewhite said. “But we’re not there yet.”
CityView Reporter Morgan Casey is a corps member with Report for America, a national service program that places journalists into local newsrooms. Morgan’s reporting focuses on health care issues in and around Cumberland County and can be supported through the News Foundation of Greater Fayetteville.