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For those of us handling long term disability claims for people suffering from chronic back conditions, a clause in the MetLife LTD policies has caused us much tsuris (Yiddish word, “worry”). Their policies contain a limitation for “neuromuscular disorders” providing coverage for only two years for disorders of the spine unless one of six exceptions are objectively proven. Simply stated, this clause impacts a large pool of disability claims, since many of the disabled have back conditions that impair their ability to sustain static positions required for most work, such as prolonged sitting or standing. Some long term back conditions linger despite an absence of radiographs or MRIs, or EMGS documenting evidence of progression. A whole other category of disability, that caused by chronic pain and the side effects of necessary narcotic pain medication, is often overlooked by the insurer eager to deny claims.

We have handled many long term disability cases involving “failed back syndrome” where our clients have neuro-stimulators permanently installed in their backs to help them manage pain. Despite that evidence of the severity of their despairing condition, the absence of an “objective” test showing the precise cause of the spinal dysfunction was used to deny their claim.

Fortunately, the 7th Circuit Court of Appeals recognized the significance of various elements of proof establishing the existence of a neuromuscular disorder which qualifies under the exceptions to the MetLife limited coverage. While MetLife emphasized that there were some equivocal test results showing ongoing radiculopathy (an exception to the limit), the Court of Appeals considered the clinical examination results of the claimant’s own specialists, ongoing consistent testing which aligned with the disorder and past positive EMGs as the objective evidence MetLife arbitrarily disregarded. They reversed the District Court in Hennen v. Metro. Life Ins. Co., 2018 U.S. App. LEXIS 26114 (7th Cir. 2018). This decision fortifies that the insurers must not require only a certain “objective evidence” to establish the necessary proofs.

Our clients often ask how to retain employee benefits while on disability leave.  A source of this information should be an employee handbook or summary of benefits available from the employer.  Often all benefits such as medical coverage or life insurance continues while the employee is on short term disability.  Then if the employee does not return to work and receives long term disability, they are offered to continue such ancillary benefits providing they start to pay the premiums or convert the coverage in some way.  For instance an employer will issue a letter explaining the employee is eligible for COBRA medical coverage for a set period of time if they pay the premiums for the coverage.

An issue arises when the employee indicates an interest in continuing the coverage but the employer fails to submit the necessary paperwork to them. A recent example of this problem occurred in Erwood v. Life Ins. Co. of N. Am._ 2017 U.S. Dist. LEXIS 56348. Erwood left work on disability, but the employer did not inform him or his family of his need to convert life insurance coverage to own it himself in order to remain covered and did not  provide him with the conversion forms. When Erwood died and his family sought life insurance, the carrier, CIGNA denied the claim because no conversion forms were on file. The employer defended its position by claiming that there was a packet of materials sent to Erwood, but the Court held  the packet was inadequate because it did not include the materials necessary to convert life insurance coverage or inform where to access such materials or even where to send them. The employer’s excuse that Dr. Erwood did have access to the life insurance program on its benefits internet portal was not enough. The Court held that “merely making an SPD on its portal does not satisfy its disclosure obligations of the plan administrator, the employer, especially in light of the fact that once Dr. Erwood’s FMLA leave expired, his access to the portal was terminated.” The Court entered judgment for the full life insurance benefit from the employer.

The Court explained that once Erwood, an ERISA beneficiary, requested information from the employer who was aware of his status and situation, the employer has a fiduciary obligation to convey complete and accurate information material to the beneficiary’s coverage and rights even if he has not specifically inquired about it. The fiduciary, in this case the employer, has a duty to inform when he knows that silence might be harmful. So if an employer makes an affirmative misrepresentation or fails to adequately inform a plan participant, that misrepresentation or inadequate disclosure can be material and when the employee detrimentally relies upon it and loses coverage, the employer can be liable.

We have been following the Courts’ treatment of mental or nervous disorders limitations in group long term disability policies. (See blog, Disability Caused by Physical Impairment, July 2015)  Recently, the 6th Circuit Court of Appeals joined other courts holding that a claimant is disabled by physical conditions alone, then the mere presence of a psychiatric component does not justify application of a mental health limitation to a claim.  In Okuno v. Reliance Std. Life Ins.Co., 2016 U.S. App. LEXIS 16423 (6th Cir. Sept. 7, 2016),  Reliance applied the one year limit on benefits because there was the presence of a psychiatric component to her claim regardless of the physical component to her disability. The court rejected Reliance’s rationale that as so long as there is a comorbid psychiatric condition the limitation applies.

Every federal circuit court to consider the meaning of the phrase “caused or contributed to by” has read it to exclude coverage only when the claimant’s physical disability was insufficient alone to render him totally disabled. See George v. Reliance Standard Life Ins. Co, 776 F.3d 349 (5th Cir. 2015).  The insurer bears the burden to show that the exclusion applies to the case.  “The effect of an applicant’s physical ailments must be considered separately to satisfy the requirement that the review be reasoned and deliberate.”  See Okuno . In order to overcome the insurers’ application of this mental health limitation to continued benefits, the claimant must claim total disability as the result of a purely physical condition.

What if a physical condition is covered, but the symptoms include depression, which is a mental illness? Courts caution that policy terms and precise medical facts of the claim must be examined.  See, for example, Leight v. Union Sec. Ins. Co. 2016 U.S. Dist. LEXIS 68412 (D.Or. May 24, 2016).   Leight’s Aspergers’ Disorder is expressly exempt from the definition of “mental illness” in the policy but Union Security attempted to apply the mental illness limitation, since the disorder produces disabling symptoms of anxiety and depression.   The court determined that the mental illness limitation did not apply since Aspergers was a ‘covered condition.”

Disability insurers love to deny claims based on their medical consultant’s conclusion that the claimant has “sedentary capacity.” The insurer’s vocational counselor swiftly identifies various jobs that the claimant can allegedly perform without performing a full or fair investigation of the transferable skills. Does the inquiry end at the point it is established that the individual can sit in a chair at a desk for a period of time?

Just as important is whether the individual has marketable skills to perform a “desk job”, since virtually every “sedentary” job requires strong computer skills.  In our experience, the qualifications related to real time computer and technology use are under investigated in the insurers’ rush to deny.

We have seen some changes in the collateral information the insurers collect regarding our clients.  For instance. on the “activities of daily living” forms they must complete, our disabled clients are asked whether they own a computer, whether it is a desktop or laptop, what they use the computer for (pay bills, read news, facebook).  Be prepared for these are not innocent questions. It’s direct purpose is to establish that the claimant has full use of a computer and a skill that is “transferable” to the workforce.   In short, claimants should not overstate their computer use at home.

Insurance coverage is based on the provisions of the contract and the proofs submitted by the claimant. In medical claims, a full and fair investigation of the facts concerning the particular claim requires the insurer to consult with medical professionals who are supposed to independently apply their expertise to the case facts and determine if the medical treatment is covered.

When coverage is improperly denied, the claimant will seek information about the denial, including the investigation of the claim and the rationale of the medical professional involved in the decision. Often the insurers rely on third party vendors who provide medical doctors to review the cases. These doctors have no direct contact with the claimant, and simply review medical records. Of course these doctors are paid for their time, but the question becomes, can they afford to be independent if they rely on this stream of income from a vendor who is unlikely to continue to hire them if their decisions do not support the insurers’ decision. The insurer must take steps to reduce potential bias. See Metro. Life Ins. Co. v. Glenn, 554 U.S. 105, 116, 128 S. Ct. 2343, 2351; 171 L. Ed. 2d 299 (2008).

Discovery into the medical reviewers is a basic necessity, but insurers often hide behind ERISA laws and fail to disclose information about the reviewers. We who represent the consumers in these cases, seek the identity of the reviewers, their credentials, how much they are paid for their services, how often they are used by the insurer, whether they see any patients of their own, and basically, if financial incentives skewed their decision.