New Jersey Disability Lawyer Blog

Common thinking about disability coverage would cause the average individual to expect that if they become unable to perform the specific duties of their occupation, they would qualify for disability benefits.  For example, if your employer requires you to travel for your occupation, then if you cannot perform this essential duty, you should qualify for coverage. The insurance companies would prefer to profile the occupation in a generic sense, because the manner in which one employer requires the employees to perform their duties may be particular to that work setting, or even geographical area of employment.   This issue is often litigated because many policies define “occupation” based on how the job is performed in a fictitious “national economy,” which is a term of art.  Courts are split on their treatment of this issue. Should insurance companies evaluate whether a claimant can perform their actual duties or should they evaluate whether a claimant can perform the duties of their occupation as it is generally performed?

Recently, the Third Circuit re-affirmed the established principle that if the policy refers to the “regular occupation,” or even “own occupation” this terminology is ambiguous and refers to the usual work that the insured was actually performing immediately before the onset of disability.” Patterson v. Aetna Life Ins. Co., 763 F. App’x 268, 272-73 (3d Cir. 2019).  The purpose of disability insurance and the modifier “his/her” before regular occupation made clear the analysis had to be conducted based on the insured’s own occupation. The Court in Patterson added “Additionally, even if a difference between “own occupation” and “regular occupation” could be teased out, the words “own occupation” would seem even more directly to capture the idea of one’s actual job duties than the words, regular occupation.”  Courts have recognized that the distinction between “own occupation” and “regular occupation” is one without a legal difference.  Hankins v. Std. Ins. Co. 677 F.3d 830 (8^th Cir. 2012).

Another example concerns the occupation of an attorney.  The demands of an attorney vary across specialty and firm size. In 2018, a Utah trial attorney at a large firm became disabled after a quadruple bypass surgery. Dewsnup v. Unum Life Ins. Co. of Am., 2018 U.S. Dist. LEXIS 208688 (D. Utah Dec. 10, 2018).  The Unum policy defined “disability” as “unable to perform each of the material job duties of his regular occupation.”  The Court held that Unum was entitled to consider how an attorney functions in the “national economy”, but rather than consider “generalized” attorney duties to judge his disability, Unum was required to consider the physical and cognitive demands of a litigation attorney including competencies for cognitive excellence. Dewsnup’s claim was successful.

Disability policies contain a provision explaining that coverage will not be extended for a claim based on a “legal disability.”  Legal disability relates to the individual’s eligibility to work due to necessary licensing, such a financial advisor (Series 7 license), lawyer (bar license) and physician (medical license).  What happens when a disability caused by a physical or mental disability results in the professional becoming legally prohibited from working in their occupation-due to suspension or revocation of their license? This may occur if an attorney develops dementia, commits ethical violations and becomes disbarred- or if a doctor develops a substance abuse, such as addiction to fentanyl, and loses his medical license.  Recently several doctors have been incarcerated for Medicaid fraud.  What is the root cause of the disability? Do they have a valid claim for disability benefits while their license is suspended?

Insurers will often take the position that a claimant’s legal difficulties are the cause of his inability to practice in his occupation, and cite to the “legal disability” coverage exclusion. In reality it might be that a claimant’s medical impairment, the “factual disability” due to sickness or injury caused an inability to engage in his or her occupation and led to the legal consequences of their behavior.

Courts have identified this problem, and often it’s a “what came first” assessment, or a “but for” assessment. Eligibility for benefits depends on three factors:  (1) “whether the claimed factual disability is medically bona fide;” (2) “whether its onset actually occurred before the legal disability;” and (3) “whether the factual disability actually prevented or hindered the [client] seeking disability benefits from engaging in his or her profession or occupation.”  Jacobs v. Nw. Mut. Life Ins. Co., 957 N.Y.S.2d 347, 351 (N.Y. App. Div. 2012).  The basic idea is that professionals “who would still be practicing their profession had their licenses not been suspended or revoked are not entitled to disability benefits.”  Mass. Mut. Life Ins. Co. v. Jefferson, 104 S.W.3d 13, 27 (Tenn. Ct. App. 2002)

 Reliance Standards’ unreasonable and bad faith claims handling , was carefully scrutinized by Judge Reeves, sitting in the Southern District of Mississippi.  Reliance and its competitors in the industry, as the Judge notes, “have conflicting missions of deciding who qualifies for benefits and ensuring those decisions do not undermine their own bottom line.”  Nichols v. Reliance Std. Life Ins. Co., No. 3:17-CV-42-CWR-FKB, 2018 U.S. Dist. LEXIS 109526 (S.D. Miss. June 29, 2018).  This conflict of interest has become very evident to the courts, which frequently criticize the practices of disability insurers; yet insurers refuse to change their ways, seeking to preserve their financial interests.

The case involved 62 year old Ms. Nichols who spent her entire life working as a Hazard Analysis and Critical Control Points Coordinator at a chicken processing plant in Mississippi.  Her duties included training employees on quality assurance procedures and inspecting, packaging, and exporting meat products in processing areas, which were maintained at near-freezing temperatures. Ms. Nichols suffers from circulatory disorders, including Reynaud’s Syndrome rendering her unable to tolerate cold temperatures because doing so would cause her arteries to spasm and could lead to serious medical complications, such as gangrene.

Ms. Nichols’ medical conditions clearly prevented her from performing the duties of her occupation, which required exposure to cold.  Reliance sought a way to deny Ms. Nichols’ claim turning to the policy’s definition of  “regular occupation”—which defines a claimant’s occupational duties as they are “normally performed in the national economy,” rather than “the unique duties performed for a specific employer or specific locale.”  Reliance excluded Ms. Nichol’s duties associated with exposure to the cold by generally classifying her job to ignore the meat inspection, packaging, and exporting duties of Ms. Nichols’ occupation and denied her disability claim.  Ms. Nichols brought suit in federal court, and she won a resounding victory.

We often suggest to our clients that they carefully limit their exposure on social media. It is simple for insurance companies to track a claimant’s whereabouts if they are regularly posting on Facebook, and not making it private, uploading pictures on Instagram, or other people are tagging them in photos or discussing their whereabouts. An example of the use of social media to deny a claim occurred recently in Goros v. Sun Life Assurance Co., No. 2:16-cv-233-FtM-38CM, 2017 U.S. Dist. LEXIS 137446 (M.D. Fla. Aug. 28, 2017).  Mr. Goros claimed that while he had a motorcycle he was sorrowfully unable to use it due to his back and arthritic conditions. However, social media of his girlfriend reported their long trips and motorcycle rides. The Court took this into account when challenging his credibility and as establishing his ability to perform occasional travel which was one of his job duties.

People that are disabled do not have to stay indoors, they can continue to perform their daily activities and readjust to live a full life with their impairment. However, if they demonstrate through their non-work activities that they can perform physical or mental requirements which are similar to those of the workplace, or if they are more social than they claim to be, this creates potentially legitimate concerns by the disability insurance company of the veracity of the claim and the depth and breadth of the impairment.

It is notable that many states, including New Jersey have passed laws regulating an employer’s access to the personal account social media website of an employee.