COVID-19 Update: Impact on Long Term Disability/ERISA Claims

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Insurance policies often have different terms of coverage for disabilities caused by “accidental injuries” and “sickness” so it is important that your claim is correctly classified.  A recent case by an endodontist disabled by advanced degenerative arthritis in her hands illustrates the tactics used by insurers to limit coverage.  Chapman v. Unum Life Ins. Co. of Am.  Unum asserted that her claim was based on sickness, which limits disability benefits to age 65.  Dr. Chapman claimed that she was entitled to lifetime benefits under the “accidental injury” clause in her policy on evidence that her arthritis condition was caused by repetitive stress injuries to her hands from work, causing micro traumas evidenced in x rays.

Secondly, Unum claimed that even if the condition was caused by injuries, it was not an accident, imputing knowledge to Dr. Chapman that she was highly likely to suffer this injury by her work.  The court disagreed, explaining, that it “strains credulity to conclude that any endodontist views the possibility of disabling arthritis simply by practicing endodontia as highly likely.  If this were the case, the dental field would be suffering a severe shortage of endodontists.”

The court considered the reasonable expectation of the insured:

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We are often asked by our disabled clients if they must stop all cease or limit their daily activities in order to prove they are unable to work in their occupation.  The answer is no.  Insurers do poke around, asking claimants on “Activities of Daily Living” forms questions such as how far they can travel, what computer devises they operate, whether they tend to their yard, or clean their home or exercise at a gym.  Detailed prodding often seeks information about how the claimant spends their day from the moment they awaken to when they go to sleep at night.

We have handled appeals for clients who suffer from chronic pain but are able to mow their lawn, or clean their own home, or care for children.  Hartford, Cigna, Unum and Prudential often deny claims of individuals whose lives outside of work appear to be too busy or too “normal” to justify a disability claim.  However when rushing to deny a claim, the insurer does not ask how often the person is able to perform these activities, or under what conditions.  We have successfully appealed cases where the insurers have challenged our client’s claim because they admit to using a computer or smart phone. The insurer simply concludes that the person surely can perform the duties and demands of their sedentary job which requires sitting at a computer during the normal work day.    We have established the key difference between using a mobile device and computer periodically to check emails, or the news,  and functioning in an executive capacity, performing cognitive demanding, time sensitive work duties on a daily basis.   We advise our clients to be careful when completing insurer forms and to place their acitvities into the proper context.

A recent case by a Software engineer, disabled by cognitive and depression symptoms outlines the courts analysis on this issue.  In Chapin v. Prudential Ins. Co. of Am., Prudential alleged that Mr. Chapin was not disabled due in part to his doctor’s noting that he continued to exercise, ski and hike. The court noted “Being able to ski, hike and work out in no way transfers into or supports performance as a software engineer.”  Evidence supported that he was disabled from his cognitively demanding occupation despite his continued attempts to remain physically active.

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Recently our firm has seen a significant upsurge in disability insurance companies including Hartford, Cigna, Aetna and Unum suddenly denying long term disability claims that have been paid for many years.  It is the burden of the disabled claimant to remain under medical care for their disabling condition and to periodically provide updates to the insurance company.  But often, after years of being on claim, and reaching the point of medical care that is palliative, many people reduce their doctor visits and learn to live with their condition with minor medical care.  A recent legal case reminds us that being on claim for a long time does not automatically mean your claim will not be challenged.  In  Skinder v. Fed. Express Long Term Disability Plan      Aetna found Ms. Skinder, a FedEx account executive totally disabled from working in any occupation in 2004 due to a back condition and paid her ever since. Suddenly, Aetna’s medical consultant performed a paper file review and decided that Mr. Skinder was no longer unable to work! The court examined the evidence and determined that the paper reviewer failed to thoroughly review all of the evidence and cherry-picked favorable medical records to support his biased view. Aetna was admonished for failing to advise Skinder of exactly what medical evidence they needed to continue to approve the claim after so many years.  The court reasoned, “a denial without new medical information to justify that decision should be treated with significant skepticism.” Aetna’s failure to “get to the truth of the matter undermines its claim that it used a deliberate, principled reasoning process.”

The lesson of this case is, to stay on top of your medical proofs, be sure that you keep up with periodic medical evaluations and provide your doctor with all of your symptoms and continuing medical problems so their records are complete.  Do not assume that since you have been on claim for a long time, the insurer will just put your file away and not question your disability in the future.

We at Bonny G. Rafel LLC monitor our clients’ cases to be sure that their medical proofs remain supportive of their disability. We are prepared to update the disability insurers periodically to advocate for our clients, as the Voice of The Disabled.

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Disability insurance should cover individual claims for loss of income due to contracting COVID-19 and its after effects on medical health.  What about our medical providers who were exposed to the horrors of the illness in hospital settings for example, and develop mental health impairments.  Are they required to continue working, suffering in silence?  No. ,Disability insurance policies provide for coverage for conditions of mental health, but unfortunately, many policies, especially group policies limit the duration of these claims to 24 months. The Parity Health Parity and Addition Equity Act enacted in 2008 bars health insurers from offering different benefits for the treatment of chronic physical conditions and mental health conditions. This act does not apply to disability claims. It is a travesty that  disability insurers can limit their benefits based on the type of illness, whether related to mental health or physical health.  Millions of Americans are struck with symptoms of anxiety, panic, depression, and turn to their disability policies only to learn that their illness is limited in coverage.  With the increase of these claims as related to COVID-19, the insurers will tighten their purse strings, and try their best to limit their financial exposure and continue to discriminate against those with psychiatric conditions.  This is a disheartening failure of our congress and the judicial system.

Even with the safety equipment provided by employers, must all employees return to the workplace?  Would disability cover the class of workers who are at high risk of contracting the COVID? Individuals with conditions that place them in a risk of severe medical illness from COVID may qualify for disability insurance since they need to remain sequestered until the risk of the virus passes.  The Centers for Disease Control and Prevention have identified certain conditions that warrant such restrictions, such as severe asthma, lung conditions, heart disease, people who are immuno-compromised, and several others.  These claims have not been litigated yet, and you can be sure that the disability insurance companies are deep in discussions on how to limit these claims.  There is some precedential decisions in this area of the law, mostly related to individuals with a high risk of severe medical complications such as a person with severe cardiac disease who risks heart damage including a heart attack, if exposed to high work stress.

Medical practitioners will be facing new challenges as their patients seek their support for seeking disability benefits.   What patients will be eligible to continued disability benefits because their medical health does not warrant them returning to the workforce?  We have helped many offices address this issue, and come up with a viable strategy when facing their dual roles as treating physician supporting and as a specialist advocate for their patient remaining out of the workforce.

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The Department of Labor Employee Benefit Security Administration just established by Federal Regulation an extension of certain timeframes under ERISA for group health plans, disability and other welfare plans during the COVID-19 National Emergency.  On March 13, 2020, the government declared a National Emergency Concerning COVID-19 in effect as of March 1, 2020.  As a result of the National Emergency, participants and beneficiaries covered by these plans “may encounter problems in.. filing or perfecting their benefit claims.. and the EBSA has taken steps to minimize the possibility of individuals losing benefits because of a failure to comply with certain pre-established time frames.

Subject to the statutory duration limitation in ERISA section 518 and Code section 7508A, all group health plans, disability and other employee welfare benefit plans, and employee pension benefit plans subject to ERISA or the Code must disregard the period from March 1, 2020 until sixty (60) days after the announced end of the National Emergency or such other date announced by the Agencies in a future notice (the “Outbreak Period”)8 for all plan participants, beneficiaries, qualified beneficiaries, or claimants wherever located in determining the following periods and dates—

(6) The date within which claimants may file an appeal of an adverse benefit determination under the plan’s claims procedure pursuant to 29 CFR 2560.503-1(h),

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The disabled must navigate the maze of insurers’ roadblocks to maintain their disability benefits often when they are too ill to tend to the demands of the insurers.  Insurers aggressively find ways to deny the payment of bona fide disability claims.  Over a decade ago, the Supreme Court recognized that insurers have an incentive to hold onto the benefit dollars they owe to claimants because it clearly improves the company’s finances. Insurance companies have what is referred to as a structural “conflict of interest when a plan administrator both determines eligibility for benefits and pays benefits claims.” Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 128 S. Ct. 2343, 171 L.Ed.2d 299 (2008).

A common thread in disability denials is the company’s decision that the insured can perform “sedentary work” despite their restrictions and limitations.  Sedentary work, simply considers the physical condition of the person- can they sit most of the time, and walk or stand for brief periods of time.  The DOT definition for sedentary work conveniently focuses exclusively on the physical demands and disregards any other aspect such as cognitive.

In Smith v Reliance, Reliance paid LTD benefits out for several years to an executive who had strokes and suffered from heart problems. Reliance then reversed course and concluded Mr. Smith could return to work, alleging he had to prove that he could not perform sedentary work due to a physical limitation on, for example, sitting, typing, or speaking.  The court disagreed, holding that if someone had to prove they could not sit, speak or type, in order to receive disability benefits, “such a rule would erase disability eligibility for all but the bedridden. Some serious diseases are debilitating because of their effect on the mind or because they worsen with stress.” Smith v. Reliance Standard Life Ins. Co., 2019 U.S. App. LEXIS 18518, at *14 (4th Cir. June 20, 2019)

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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 (8th 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.

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We regularly file appeals of disability insurance denials of long term disability claims.  Our clients are bound by ERISA regulations which require that all appeals must be filed within 180 days of the insurance company denial. We meet with our clients as early as possible following their receipt of the denial, to strategize what evidence to collect to challenge the wrongful denial of LTD benefits. We always demand a copy of the insurance company’s entire claim file, because we have a right to the record and it often provides great insight as to the thoughts of the insurer as they planned their denial of the claim.

The insurance companies that administer these claims are required to adhere to the ERISA regulations as well, which require them to make their appeal determination within 45 days of their receipt of the appeal, unless they establish “special circumstances” to extend the deadline another 45 days, for a total of 90 days.  In our experience, insurance companies regularly ignore these deadlines.  They wait until the first 45 days has gone by, and then ask our client to provide medical information or documentation, even to undergo an insurance medical examination.  The insurance companies state that since they have to wait for this information, they can toll the deadline to make their decision on appeal until our client adheres to their demands.  Aggressive lawyers like us have challenged the insurance company’s right to “toll” the deadline.  Of special concern is the insurance company waiting until we file an appeal to require our client to undergo a medical examination with their doctors.  We object to our clients having such an exam during the appeal.  It is our view that once the denial has been issued, the contractual obligations of our clients stops and is not restored until the denial is overturned.  Of note is a recent case, McIntyre v. Reliance Standard Life Ins. Co., 2019 U.S. Dist. LEXIS 88536 (D. Minn. May 28,, 2019) where the court explained that Reliance could toll the deadline until it received medical records it had ordered from the providers which was not within their control, but could not toll the statutory period for the IME since they could have scheduled it earlier.  We have recently filed several lawsuits against insurance companies when they have not decided the appeal we filed within the statutory deadline.  Our disabled clients are entitled to a full and fair review of their claim on appeal, obviously the insurers are not interested in the financial havoc their denials have on our clients and their families.

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This is the first in a series of articles designed to showcase various topics related to disability claims that are particularly relevant to medical professionals.  When a client seeks our assistance regarding their need to file a disability claim under an insurance policy, we first determine when they became disabled. If the disabling medical condition is caused by a sudden accident or injury the date of disability is usually clear. Often the disability is instead caused by a progressive illness or condition that was initially manageable but became more limiting over time. Some examples of these long term conditions may be Multiple Sclerosis, herniated discs in the neck or low back, essential tremors or arthritis.

Most professionals will attempt to make accommodations or adjustments to their practice in order to remain at work as long as they can before beginning the process to file a disability claim. Steps taken might include relinquishing certain work duties/procedures that exacerbate the condition, reducing or eliminating hospital or emergency call, and reducing patient care hours. The medical professional may refer difficult cases out to other colleagues. These are all prudent and reasonable accommodations to make but they often lead to a significant loss of income over time.

Stoic individuals that continue to work despite brewing disability are essentially “working while disabled.” In these instances, we take the time to determine when exactly the disability began, and when did it interfere with the established duties of the occupation. The reason for this analysis is to evaluate whether we can date the claim to a time period even before the client meets with us. Why does this matter? Three incentives: establish a claim earlier so the waiting period for benefits has already occurred; establish a loss of earnings from the “working while disabled” period of time so that benefits can begin; and thirdly establish a basis for calculating a loss of earnings when the professional was earning the most in his/her profession.

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Many individuals with chronic permanent medical conditions reach a level of treatment that is palliative, that will not improve their symptoms or effect their prognosis. Continuing to visit a medical provider to monitor your condition  that does not provide any medical benefit may seem pointless, and can use up valuable time and money resources. The disabled may reduce the frequency of medical visits, especially when the provider advises that no treatment is necessary.  Nonetheless, claimants on long-term disability must fulfill the burden of proof showing that they remain disabled over time. Such a requirement includes furnishing continuing proof of disability, such as medical notes or disability forms signed by a current treating medical provider.

The incompatibility of these two situations clash when the insurer to your disability claim requires “appropriate treatment” for the disabling condition in order to continue the claim.  The recent court decision in Griffin v. Hartford Life & Accident Ins. Co., 898 F.3d 371 (4th Cir. 2018) makes clear that continuing medical visits are necessary. Griffin stopped working due to pain from a herniated disc and saw his medical provider from September 2011 to June 2013. Since there was o feasible medical treatment to improve his condition, he stopped active treatment. Griffin explained to Hartford that he was unable to afford continuing visits to his medical provider, yet Hartford still required that a physician remark on functionality in order to continue paying Griffen long-term disability benefits. Since no treating physician could speak confidently on Griffin’s current disability the court upheld Hartford’s denial of Griffin’s long-term disability claim despite his contention that he remained disabled.

I advise all clients experiencing a chronic medical condition to remain under the care of a physician with at least quarterly visits, even if the physician maintains that the condition remains unchanged. Clients should have disability claim forms completed by their treating provider and keep up to date with any necessary claim materials, so that disability is continuously supported. While it may seem unnecessary to spend resources on visiting a provider when no tangible benefit comes from doing so, previous cases such as Griffin v. Hartford Life show that courts are likely to view, as insurance companies do, a lack of continuing medical history as congruent with improvement in one’s condition or absence of disability altogether.

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