The Technical Rules That Decide ERISA Disability Claims

Welcome to Season 6, Episode 20 of Winning Isn't Easy. In this episode, we'll dive into The Technical Rules That Decide ERISA Disability Claims.

ERISA disability claims are often decided not only by medical evidence, but by technical policy provisions that many claimants never realize will determine the outcome of their case. Terms that appear straightforward (such as “active employment,” “regular attendance” of a physician, or whether a condition is classified as an “injury” or a “sickness”) can significantly affect eligibility for benefits and how long those benefits will last. In this episode, attorney Nancy Cavey examines three real disability cases that illustrate how seemingly minor policy language can have life-changing consequences. She discusses a physician who unknowingly lost his disability coverage after reducing his work hours, an insurer’s attempt to deny benefits based on its interpretation of a treatment requirement, and a surgeon whose lifetime benefits hinged on the distinction between an accident and an injury. Together, these cases reveal how technical definitions and policy language can shape the outcome of ERISA disability claims, and why understanding these rules before making critical decisions is essential to protecting disability benefits.

In this episode, we'll cover the following topics:

One - The Danger of Reducing Your Hours

Two - What Does the Term “Regular Attendance” Mean in an ERISA Disability Claim and How Disability RMS Weaponized “Regular Attendance” to Deny a Valid Claim

Three - How the Difference Between the Terms Accident and Injury Can Impact How Long You Get Your ERISA Disability Benefits

Whether you're a claimant, or simply seeking valuable insights into the disability claims landscape, this episode provides essential guidance to help you succeed in your journey. Don't miss it.


Listen to Our Sister Podcast:

We have a sister podcast - Winning Isn't Easy: Navigating Your Social Security Disability Claim. Give it a listen: https://wiessdpodcast.buzzsprout.com/


Resources Mentioned in This Episode:

LINK TO ROBBED OF YOUR PEACE OF MIND: https://mailchi.mp/caveylaw/ltd-robbed-of-your-piece-of-mind

LINK TO THE DISABILITY INSURANCE CLAIM SURVIVAL GUIDE FOR PROFESSIONALS: https://mailchi.mp/caveylaw/professionals-guide-to-ltd-benefits

FREE CONSULT LINK: https://caveylaw.com/contact-us/


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Please remember that the content shared is for informational purposes only, and should not replace personalized legal advice or guidance from qualified professionals.

Transcript

Nancy Cavey [00:00:10 - 00:00:54]

In a recent Disability claims, small technical rules buried in the fine print can determine whether a claimant gets their benefits for a lifetime or nothing at all. Now, sometimes the outcome has less to do with the severity of the disability and more as to how the policy language is interpreted and applied. I'm Nancy Cavey, national ERISA and individual disability attorney. Welcome to Winning Isn't Easy. Before we get started, I have to give you a legal disclaimer. This podcast isn't legal advice. The Florida Bar association says I have to say this. So now that I've said it, nothing is going to prevent me from giving you an easy to understand overview of the disability insurance world, the games the carriers play, and what you need to know to get the disability benefits you deserve.

Nancy Cavey [00:00:55 - 00:02:03]

So off we go now. In ERISA disability cases, the outcome often turns not only on medical evidence, but highly technical policy provisions and definitions. Disability insurance policies and plans are filled with terms and requirements that seem straightforward on the surface. Things like active employment, regular attendance of a physician, whether the condition is classified as injury or sickness. But those definitions, if there are definitions, can dramatically affect whether the claim is approved, denied, and how long benefits are lasting. Now I'm going to talk today about three real cases that show how these technical rules can make or break a disability claim. In the first story, I'm going to tell you about a physician who temporarily reduced his work hours unintentionally, and he lost his disability coverage entirely, leaving him without protection when a serious medical problem later forced him to stop working. In the second case, I'm going to explore how an insurer attempted to weaponize a policy's regular attendance requirement by arguing that the claimant wasn't pursuing the most appropriate treatment even though he was seeing multiple doctors.

Nancy Cavey [00:02:03 - 00:03:01]

And in our final case, how we examine how a seemingly simple distinction between accident and injury determined whether a disabled surgeon would receive benefits for life or just have them limited to 42 months of benefits. These cases reveal ERISA discipline Claims are often decided by technical definitions, procedural rules, and policy language that most people just don't realize control the outcome of their case. And this is going to illustrate why. Understanding these rules and the terms of your policy or plan, and getting experienced guidance before making critical decisions can be the difference between getting your benefits and and losing your benefits. So let's dive in. We're going to talk about three things. Number one, the danger of reducing your hours. Number two, what does the term regular attendance mean in an ERISA disability claim, and how disability RMS weaponized regular attendance to deny an otherwise valid claim.

Nancy Cavey [00:03:02 - 00:03:12]

And third, how the difference between the terms accident and injury can impact how long you get your disability benefits. Before we get started, let's take a quick break.

Speaker B [00:03:13 - 00:03:31]

Have you been robbed of your peace of mind by your disability insurance carrier? You owe it to yourself to get a copy of Robbed of your peace of Mind, which provides you with everything you need to know about the long term disability claims process. Request your free copy of the book@kvlaw.com today.

Nancy Cavey [00:03:37 - 00:04:09]

Welcome back to Winning Isn't Easy. Let's talk about the danger of reducing your hours and the impact it has on a long term disability claim. Now, this is a complex story of how reducing one's hours can destroy that claim. So you're going to have to bear with me. And you might even want to get out a piece of paper and pencil to outline this, because that's exactly what we ERISA disability lawyers do. So this is the story of Dr. Tunkel, who worked as a general surgeon, and he worked 40 hours a week until March 12, 2020. And that's when the trouble started.

Nancy Cavey [00:04:10 - 00:05:26]

From March 15, 2020, his payroll documents showed a lower pay of 4.75 hours per week through May 23 of 2020. So he averaged 14.5 weekly appointments, 6.5 weekly hours in surgery or consulting with patients, and then he resumed his full time in pay May 24, 2020. Okay, that sounds understandable, but during this period of fluctuating hours in pay, he developed complications from shoulder surgery that meant it was difficult for him to perform surgery. He was employed by a medical practice that had a disability insurance policy through ReliaStar Life Insurance company that covered physicians who were in active employment. So what was active employment and why did it make a difference in this case? Disability policies or plans differ from policies to plans, and you got to get yours out and review it. Now, in this case, the term active employment meant that the physician spent at least 30 hours per week performing the material and substantial duties of their regular occupation. And if the physician stopped working for at least 30 hours per week, Rely's Store automatically entered their coverage unless they were on vacation or a covered leave of absence. So what happened to Dr.

Nancy Cavey [00:05:26 - 00:06:18]

Tunkel's coverage from March 15, 2020 through May 24, 2020, when he developed complications from the surgery, there was no coverage. Yeah, there was no coverage. That's a huge problem. Why? Well, his policy became effective again when he resumed working 30 hours per week and resumed performing the material, substantial duties of his occupation on May 25, 2020. He ultimately filed a disability claim because his shoulder problems were preventing him from performing surgery. And guess what? His claim was denied. Now why would it be denied? There was another clause in this policy called a pre existing condition clause that excluded coverage for a disabling condition that developed when there was no coverage. So ultimately this case ends up in federal court.

Nancy Cavey [00:06:18 - 00:07:05]

Tunkel argues he submitted productivity and payroll reports that established that his hours never dropped before below 30 hours. But unfortunately, his employer contradicted his assertions with payroll records that documented that his hours in fact fell below the required 30 hours. So the court found that ReliaStar had discretion to determine whether he worked three hours per week, lost his coverage, and whether that condition was preexisting. And guess what? The court agreed with Reliastar. So the lessons here, and this is a big lesson, don't reduce your hours. If you're having problems because of your disabling condition, don't reduce your hours below the hours required in your policy or plan to maintain coverage. Now I know you might be tempted to reduce your hours in an attempt to reduce your symptoms or keep your job. Don't.

Nancy Cavey [00:07:06 - 00:08:21]

The better course would be to take a leave of absence because that will preserve your coverage or have your doctor take you out of work and then file a short term disability claim. Better yet, perfect example of why you should consult with an experienced ERISA disability attorney before you make any move and before you reduce your hours. Got it. Let's take a break. Foreign. Welcome back to Winning Isn't Easy. What does the term regular attendance mean in an arrested disability claim and how disability RMS weaponized that regular attendance provision to deny a valid claim? Now, I think stories always help explain the tools that disability carriers or plans use to wrongfully deny or terminate benefits and and misapplying definition terms is one of their favorite tools in their toolbox of denials and terminations. Let me tell you the story of Jesse Bruton found in Bruton vs American United Life Insurance and this is out of the 6th Circuit.

Nancy Cavey [00:08:22 - 00:09:31]

Bruton was employed by Resource Management which contracted with American United Life to provide short long term disability benefits to his employees. AUL in turn contracted with disability RMS to manage their claims by having the claims reviewed by physicians and vocational rehabilitation providers making decisions to pay or deny claims and then paying the approved claims. I will tell you that DRMS is notorious in the ERISA world for its claims denial and termination. So Jesse Bruton's occupation was a technical development manager. To win his disability benefits, he had to establish that he couldn't perform the material and substantial duties of that occupation. Now his occupation had both technical and client facing elements including business development. He managed the technical project team, he interacted with a variety of resources within the organization including application architects, designers, information architects and client services manager. He was making sure that they were delivering on the entire project and he as a result had to travel at least 20% of the time.

Nancy Cavey [00:09:31 - 00:10:49]

Unfortunately, he had significant problems with spinal stenosis. He'd undergone significant unsuccessful medical treatments and unfortunately his pain progressed and he got to the point where he had to stop work and apply for his short term disability benefits while being paid short term disability. He continued with treatment but but he was even bedridden because of his pain and the opioid medication that he was taking infected his memory and processing. And even though he was still trying to work because he was a hard working guy, it impacted his productivity. So his providers went on and said look, we're going to recommend some treatment, aquatic therapy, pain management and have an updated MRI because of his, probably because of his leave of absence, reduced hours or whatever he was doing, he was having problems with his group insurance carrier paying for benefits and he couldn't afford the treatment out of his own pocket. So he's got this dilemma where he's having trouble with his group insurance, he can't afford it. And what does disability rms, the claims management company do with this information? Ha. Well guess what? They did a claims denial under the regular attendance plan provisions.

Nancy Cavey [00:10:49 - 00:12:00]

They concluded he wasn't under the regular attendance of a physician for his condition because his treatment was not the most appropriate to maximize recovery and therefore he didn't meet the definition of disability. Now as I said, his providers recommended aquatic therapy, pain management and updated MRI and he couldn't afford it and was having trouble with his insurance company. Well, they seized on that and again denied his claim and took the position that his occupation was sedentary and he could do this. Now interestingly, during the appeal process he was hospitalized for opioid withdrawal probably because his health carrier wasn't providing his medication. Nonetheless, his treatment physicians continued the prescription for oxycodone and recommended he see a psychiatrist. So he goes off and sees multiple medical providers to discuss his treatment options, including pain management. Surgery was recommended, implantation of a spinal cord stimulator was recommended. Physical exam show severely limited range of motion with no signs of exaggeration.

Nancy Cavey [00:12:01 - 00:12:47]

But there was also some other problematic information in this claim in his medical records. He traveled from Ohio to New Mexico and while there he visited a farm. So drms said, look, if you can travel, you can go out and do activities that's inconsistent with the level of your pain. And we just don't think you're in the pain that you are. And by the way, you hadn't had an updated MRI in five years. So we, we don't even know if your back condition is really the cause of all your of your pain. Of course that's stupid, but that's some of the things they'll do. So let's go talk about what the regular attendance provision required, because that's what the court ultimately looks at.

Nancy Cavey [00:12:47 - 00:14:06]

The resource management plan required that a person be totally disabled and under the regular care and attendance of a physician for their disabling injury or sickness. The term regular attendance was defined to mean that an applicant for benefits personally visits a physician as medically required according to the standard medical practice to effectively manage and treat his disability. Number two is receiving the most appropriate treatment and care that will maximize their medical improvement and aid in their return to work. Number three is receiving care by a physician who whose specialty or clinical experience is appropriate for the disability. Now, the plan goes on to provide that if the applicant is no longer entitled to benefits when they either stop being disabled or they're no longer under the regular care and attendance of a physician, you can know where this story is going. His claim is denied, he appeals to the federal court and the federal court agrees with DRMS that he doesn't meet the regular attendance requirements. And there are five reasons the court gives. Number one, he failed to follow standard medical practice to manage his pain as he was prescribed increasing dosage of opioid pain medication despite largely benign physical findings.

Nancy Cavey [00:14:06 - 00:14:39]

There was no pain or contract. There was no pain contract. There was no drug testing. The court just felt that that was not a standard medical practice to manage the pain. Number two, he had failed to undergo that updated mri. Number three, he had failed to try the aquatic physical therapy. Number four, he failed to consult with a pain management provider when originally recommended in his case. And number five, he expressed worsening pain complaints despite being prescribed higher doses of pain medication.

Nancy Cavey [00:14:39 - 00:16:17]

Now, Bruton appealed the denial to the 6th Circuit, and the 6th Circuit quickly noted that there were parties held radically different views as to what regular attendance required a person to do. On the one hand, DRMS argued that despite Burton being in regular contact with his physicians, he wasn't in regular attendance because he didn't follow the physician's recommended treatment plan. Burton, on the other hand, said, look, I've met the requirements. I have routine medical care by competent Medical professionals, there's no evidence of malingering or secondary gain. Now, the way the term regular care is defined in the plan seems to mean that the claimant is obligated to receive the most appropriate treatment and care designed to maximize their medical improvement and aid in a return to work. In my view, that, I think, can create an affirmative duty on the part of the insured to seek and accept care designed to allow a claimant to return to work. But the Court rejected the RMS's view that the failure to pursue any treatment recommended by a medical professional with any level of confidence that the treatment could lead to a medical improvement puts the claim outside the realm of total disability, even in circumstances where a patient declines treatment that's prohibitively expensive, experimental, risky, or painful. So, in other words, they had tried to expand the definition to include anything and everything, and if you didn't do anything and everything, too bad.

Nancy Cavey [00:16:17 - 00:17:14]

So sad. Your claim was denied. Now, the 6th Circuit said, Look, that's incredibly expansive beyond the terms of this definition of reasonable or appropriate medical care. And the court said, look, the carrying ad was appropriate and, and Burton made reasonable decisions about his own care. I think that's the correct approach here where there is some degree of leeway in terms of what the patient or the policyholder gets in terms of the care. Obviously, this interpretation was so broad that they could have denied the claimant if surgery was recommended and the claimant didn't undergo it for whatever reasons. Fear of injury, knowing family members who had had bad results. And the court reigned in this expansive interpretation and said, look, we're going to look at the circumstances.

Nancy Cavey [00:17:14 - 00:17:45]

He was under care. He was generally compliant with the care. There was no need for him to get an updated mri. His physicians weren't recommending that. It was something that. That the carrier had created as a requirement for care. Again, so I think that this is a good example of a reasonable approach to the question of care. Now, not every court takes that reasonable approach, nor does every carrier or plan.

Nancy Cavey [00:17:45 - 00:17:55]

But I think this case is a bit of a roadmap as to how the definition can be interpreted and applied, even in the most complex cases. Got it. Let's take a break.

Speaker B [00:17:56 - 00:18:30]

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Nancy Cavey [00:18:35 - 00:19:19]

Welcome back to Winning Isn't Easy how the difference between the terms accident and injury can impact how long you get your ERISA disability benefits. Now, if your disability claim is based on back pain or for example, the terms accident and injury can impact how long you can get your ERISA disability benefits. So I'm going to give you an example. Dr. Pothoff was a general and vascular surgeon for more than 25 years. Throughout his career, he suffered from back pain, and that led to the closure of his medical practice. In 2018, he began looking for new work and applied for his UNUM residual long term disability benefits. And the residual long term disability provision allowed him to work on a reduced schedule as he searched for other work.

Nancy Cavey [00:19:19 - 00:20:23]

Seven months into his job search, his back pain worsens to the point that he concludes he can't work anymore. So he applies for total disability benefits. Unum approves this claim, but says, look, your disability arises from a sickness and not an injury. And that classification is important because the policy term limits the payment of benefits for sickness to just 42 months, while benefits payable in this case due to injury are payable for life. Now I will tell you that many disability policies will cut benefits off at the age of retirement, but he had one of these golden policies that we don't see a lot of these days where there's lifetime benefits. So Platoff argued that his back pain was due to an injury, a slip and fall accident in 1996, and then the repetitive stress based on the nature of his practice, standing most of the day and wearing lead aprons. Unum, of course, disagreed, denied the claim. This case ends up in federal court in Michigan, and the court asks two simple questions.

Nancy Cavey [00:20:23 - 00:21:39]

Number one, did the slip and fall cause his total disability? Number two, did his repetitive stress injuries as a result of standing and wearing that lead apron cause his total disability? The court found that there was not enough evidence in the record to prove more likely than not that the slip and fall accident caused his total disability. But that wasn't the end of the analysis. They looked at the definition of injury. Injury was defined as an accidental bodily injury. But how was the term accident defined? Well, guess what? It wasn't defined in the plan. So the question became, well, can you use Michigan law defining accident be used? Or do you have to use what's called federal common law? Because this case was governed by ERISA law, a federal statute, the court found that the federal common law had to be used to define the term accident and then to determine whether his employment caused an injury. The court used a case called the Wickman test, and that involves a subjective, objective inquiry. And the record in this case really didn't reflect the subjective basis of an inquiry.

Nancy Cavey [00:21:40 - 00:22:42]

So the court says, look, we're going to have to evaluate this under a reasonable person approach here. A reasonable general and vascular surgeon with the same insured knowledge and experience might know or reasonably know that they could develop a condition that would cause degenerative disc disease. And the court said no, which I thought was interesting because I would have said yes. The medical studies in the record show the connection between the back pain and performing surgery didn't appear until after 2018, and there was nothing in the record to reflect that a reasonable surgeon would have been aware of how their work affected their well being. I think that is wrong. I think this decision is a gift to the doctor, and I don't have a problem with that. But the court found that it was reasonable that he would not have known about the risk that repetitive stress could result in an accidental injury. And as a result, the court ruled that his work duties as a surgeon were more likely than not to cause repetitive stress and were accidental.

Nancy Cavey [00:22:42 - 00:23:31]

As I said, I disagree with this decision. Part of the reason why I disagree with this is based on my experience as a workers comp attorney who has in the course of representing claimants in the workers comp world and defending these claims. We routinely deal with repetitive stress injury claims. It's all over the workers comp statute and case law that there are such things as repetitive trauma. And guess what? Standing is a repetitive trauma. Now, I also know doctors. I've spent my entire legal career dealing with medical legal issues. And I am pretty sure that as a general surgeon, this guy performed carpal tunnel surgery on people who did repetitive activities in a work setting like typing, or generally stood all day like he did and developed back problems.

Nancy Cavey [00:23:32 - 00:24:07]

I am positive he knew that repetitive standing could result in back, hip or knee problems. I mean, repetitive trauma is taught in medical school and he's probably treated patients with repetitive injuries. I know this is crazy, but I actually agree with Unum's position in this case. Isn't that amazing? Must be the first time I've ever done that. So that wraps up today's episode of Winning isn't easy. I want to thank you for tuning in. If you found this episode helpful, please take a moment to like our page, leave a review, and share it with your family and friends. Join us next week for another insightful discussion of.

Nancy Cavey [00:24:07 - 00:24:10]

Of winning isn't easy. Thanks for listening.