Many cases address the critical issues surrounding the denial of long-term disability (LTD) benefits under the Employee Retirement Income Security Act of 1974 (ERISA), and many explore the procedural and substantive requirements that insurers must follow when adjudicating disability claims, including the necessity for thorough and transparent explanations for claim denials. One such case is Halleron v. Reliance Standard Life Ins. Co., 2024 WL 3585139 (W.D. Ky. July 30, 2024). This case also examines the administrative remedies claimants must exhaust before seeking judicial review, and the circumstances under which a court may find that such remedies have been effectively exhausted even without an appeal. The broader implications of this case highlight the importance of understanding one’s rights and the legal standards governing disability benefits.

Dr. Halleron, a physician, performed physical exams, met and interacted with patients, providers, and pharmacies, and was involved in establishing and following procedures and protocols for her practice. Unfortunately, she was diagnosed with POTS — postural orthostatic tachycardia syndrome. The symptoms of POTS – dizziness, fatigue, joint pain, and syncope — rendered Dr. Halleron unable to perform her job, so she stopped working and submitted a claim for disability benefits to her disability insurer, Reliance Standard Life Insurance Company. Dr. Halleron’s short-term disability (“STD”) claim was denied based on POTS being a pre-existing condition; however, Dr. Halleron also made a claim for LTD benefits, which was not barred by a pre-existing condition exclusion.

Matrix reviewed Dr. Halleron’s LTD claim and denied it because she did not meet the policy definition of “Totally Disabled.” Matrix’s denial was brief and lacked detail about how Dr. Halleron failed to meet the policy standard for disability. Dr. Halleron sued Matrix. Matrix argued that the suit should be dismissed because Dr. Halleron failed to exhaust administrative remedies, as she did not appeal Matrix’s initial LTD claim denial.

The District Court in Kentucky considered whether Dr. Halleron exhausted her administrative remedies without appealing Matrix’s denial of her LTD claim. The court determined that Dr. Halleron exhausted her administrative remedies without submitting an appeal. The court found that Matrix’s determination notice did not strictly comply with ERISA claims regulations; specifically, the determination did not discuss the decision and explain any disagreement with or choice not to follow the view of the claimant’s treating physician.

The court reasoned that Matrix’s denial letter did not address the assessment of Dr. Halleron’s condition by her treating physician or that physician’s conclusion that Dr. Halleron would require disability benefits and work modifications for the rest of her life. Matrix’s denial was substantively merely one paragraph and did not provide a sufficient analysis of Dr. Halleron’s medical records as required by ERISA. The court explained that:

The claims regulations, inter alia, require adverse benefit determination notices to discuss the decision and explain any disagreement with or choice not to follow the views of the claimant’s treating physician. 29 C.F .R. § 2560. 503-1(g)(1)(vii)(A) (i). Matrix’s determination that Dr. Halleron is not disabled did not address Dr. Perrotta’s assessment of Dr. Halleron’s condition or her conclusion that Dr. Halleron required disability benefits and work modifications for the rest of her life. (LTD Admin. R. 93-94). Accordingly, ERISA regulations deem Dr. Halleron’s administrative remedies exhausted and allow Dr. Halleron immediate access to judicial review. (Emphasis added).

The court also concluded that both the STD and LTD denials were arbitrary and capricious because they were not the product of a deliberate, principled reasoning process. The court cited the Sixth Circuit’s opinion in Elliott v. Metropolitan Life Insurance Co., 473 F.3d 613, 617 (6th Cir. 2006), which held that a reasoned judgment about a claimant’s capability must rely on medical evidence that assesses the claimant’s physical ability to perform job-related tasks and because Matrix merely concluded that POTS was a pre-existing condition without explanation.

Based on these findings, the court remanded Dr. Halleron’s claim back to Matrix to perform a full and fair review of bother her STD and LTD claims as required by ERISA.

The court’s determination in this case highlights the importance of understanding the claims process and your rights as a claimant. Whereas Matrix attempted to brush off Dr. Halleron’s claims without providing sufficient analysis or explanation, Dr. Halleron did not accept Matix’s improper denials, but found legal counsel and asserted her rights under ERISA. Specifically, while a claims administrator or insurer may try to convince a claimant that she is not entitled to disability benefits, the claimant should not take such determinations at face value. ERISA requires claimants to exhaust administrative remedies, but in a case like this where the insurer or administrator does not provide enough information for the claimant to understand what is required for a successful appeal, the claimant may have a successful argument that the case is ripe for litigation even without going through the administrative motions of submitting such an uninformed appeal.

Dealing with a hostile work environment is a daunting experience that can impact a person’s mental and physical health. When the stress and strain of such an environment cause a disability, it is crucial to understand how the hostile work environment can affect a claim for disability benefits.

What is a Hostile Work Environment?

Unwelcome conduct from colleagues, supervisors, or even clients that is severe or pervasive enough to create an intimidating, hostile, or abusive working atmosphere characterizes a hostile work environment. This can include harassment, discrimination, bullying, and other forms of mistreatment. To be legally actionable, the behavior must be discriminatory, meaning that it is based on race, gender, religion, age, disability, or other protected characteristics.

Impact of a Hostile Work Environment on Mental Health

A hostile work environment can profoundly affect a person’s mental health. Prolonged exposure to such negative conditions can lead to anxiety, depression, post-traumatic stress disorder (PTSD), and other mental health issues. These conditions can severely impair a person’s ability to perform his job, which may make it necessary to take medical leave from work or to make a claim for disability benefits.

Disability Claims Involving a Hostile Work Environment

One may assume that if a hostile work environment renders a person unable to perform their job, they should file a claim for disability benefits. However, it is important to understand that many policies will not pay disability benefits where the disability is because of workplace issues, including a hostile work environment. These policies will use language that defines an occupation based on the “national economy. The analysis determines if a person can perform that occupation, as it is performed in a national economy, without a hostile work environment, to define their disability according to the policy.

For example, if you manage a shipping/receiving warehouse and you can no longer work there because you are harassed by other employees in the warehouse, if your group disability policy defines “occupation” as one performed in the national economy, your claim will likely be denied because while you may be unable to work in that particular warehouse, you are not disabled from working in another shipping/receiving warehouse with different personnel and a different environment. The theory is that while you may not be able to work in one warehouse, you can find a new job at a different warehouse where there is no hostile work environment; if you are truly “disabled” under the policy, you would not be able to perform at any warehouse because your disability is caused by your medical condition, rather than to your work environment.

Where a policy does not contain “national economy” language, the analysis done to determine whether benefits are payable is likely a more straightforward question of whether the claimant is able to perform his occupation as defined locally.  Thus, in the above example, if you cannot continue working in your specific occupation as a shipping/receiving manager for your particular employer, your disability claim should not be denied for that reason (note that your claim may still be denied for many other reasons).

Medical Evidence and Documentation

If you believe that you have a covered disability claim, medical evidence is the cornerstone of any disability benefits claim. To substantiate your disability claim, you will need to provide medical records evidencing the condition on which your claim is based. Therefore, it is crucial to understand that if you have discussed issues at work with any of your doctors, the insurance company might deny your claim based on those workplace issues. Just as insurance companies will “cherry-pick” medical evidence and focus only on evidence that do not support a claim, despite the evidence taken as a whole in fact supporting the claim, they will also focus on any mention of issues with a workplace or co-workers, even if the evidence taken as a whole demonstrates that a disabling condition is not caused by workplace issues.

It is thus vital to know the contents of your medical records. The insurance company could spin even something as seemingly innocuous as “I have a difficult co-worker” to mean that your difficulties with a particular co-worker are causing your inability to perform your occupation.

Taking Legal Action Beyond a Disability Claim

Many people who experience a hostile work environment and have become unable to work initially take the position that they should make a claim for disability benefits under an insurance policy and should also file a lawsuit against the employer for harassment or similar claims. However, this approach may be a recipe for failure of your disability claim.

For example, assume your insurance company denied your disability claim and appeal, so you file a lawsuit to recover disability benefits due you under the policy. By claiming in a lawsuit to be entitled to disability benefits, you are inherently claiming that if not for your disabling condition, you would otherwise be able to continue working. Assume further that you had consulted with an employment attorney and file a lawsuit for damages based on a hostile work environment. By making such a claim, you are inherently taking the position that if not for the hostile work environment, you would be able to continue working at your job.

This can create a conflict that causes both of your lawsuits to fail: the insurance company will point to your employment-based lawsuit and take the position that because you are claiming that without the hostile work environment, you would be able to work – and you must therefore not be disabled from working due to your medical condition. Meanwhile, your employer will point to your disability claim in order to downplay the hostile work environment claim, and take the position that based on your disability claim, you must have stopped working because of your disability and not because of a hostile work environment.

This could result in both of your lawsuits getting dismissed, leaving you with no way to recover your disability benefits or damages.

Conclusion

A hostile work environment can negatively affect your ability to perform your job. Being unable to perform your job can have devastating effects on every aspect of your life and could lead to a need for your to make a claim for disability benefits. In such a situation, it is crucial to understand completely how your potential claims may impact one another. If you or someone you know has become disabled and needs to submit a claim for disability benefits or navigate these issues, reach out to McKennon Law Group PC now for a free consultation.

Insurance companies regularly review the ongoing medical care of their recipients of long-term disability benefits to find evidence of improved health and functional capacity that allows the recipients to return to gainful employment. The insurers look for any signs of discontinued medical care, lack of consistent medication regime, and the slightest improvement in overall health to claim that return to work is warranted. Sometimes, the insurers will even change the method they evaluate a claim and reverse their prior determination of eligibility of benefits based on the same information contained in the recipients’ administrative record.

In the recent case of Iravani v. Unum Life Insurance Company of America, 692 F. Supp. 3d 904 (N.D. Cal. 2023), the Plaintiff suffered from degenerative spinal disease, ongoing migraines, neck pain, and back pain that rendered her incapable to perform the daily tasks of her job. After payments for over a decade, Unum discontinued Plaintiff’s long-term disability benefits. Plaintiff sued Unum for denying her long-term disability claim.

The parties agreed that the “de novo” standard of review applied, under which “the court does not give deference to the claim administrator’s decision, but rather determined in the first instance if the claimant has adequately established that he or she is disabled under the terms of the plan.” Muniz v. Amec Const. Mgmt., Inc., 623 F. 3d 1290, 1295-96 (9th Cir. 2010)

The Plaintiff worked as a cosmetic beauty specialist at Saks Fifth Avenue until June 2010 when she stopped working and submitted a claim for disability benefits under a group insurance long-term disability policy issued by Unum. Plaintiff indicated that she was unable to continue working because of neck pain and migraine headaches. Unum approved her claim and started paying her long-term benefits while requesting updated information from Plaintiff and her doctors annually.

Suddenly, on January 7, 2021, Unum terminated Plaintiff’s benefits with the explanation that Plaintiff could “perform the duties of alternate gainful occupations,” so she was no longer considered disabled. Specifically, Unum contended, “based on the totality of the medical evidence in the file, including the infrequency and the lack of intensity in treatment, that Plaintiff could perform “full-time sedentary or light physical demands”, including occupations such as “Information Sales Representative,” “Hotel Sales Representative,” and “Personnel Scheduler.”

Unum retained two physicians to conduct reviews of the medical file and a new vocational expert, who evaluated Plaintiff’s prior work experience. Unum’s experts provided “paper review” opinions that Plaintiff was no longer eligible for long-term disability benefits and could return to work in job occupations requiring far greater skills than Plaintiff possessed based on her work experience. To justify benefits termination, Unum pointed out that Plaintiff had not had any recent imaging studies, received decreased medical treatment over time for her low back and neck pain, and that she controlled her pain with only over-the-counter medications.

Unum did not perform an independent medical examination of Plaintiff to determine the reasons behind her decreased medical care and changes in the medication regime. Contrary to Unum’s conclusions, Plaintiff’s medical condition never improved. However, Plaintiff had a gap in health insurance coverage that explained her lack of doctors’ visits. She also received marginal benefits over the years from strong pain relief medications and steroid injections which lead her to treat her ongoing disability with conservative measures pursuant to her doctors’ recommendations.

The administrative record showed that Plaintiff received extensive medical care during the years of her disability. Since 2010, Plaintiff received ongoing medical treatments and underwent multiple medical tests. Plaintiff’s 2010 MRI of her cervical spine showed “disc degenerative changes and straightening of the cervical spine” that resulted in the diagnosis of cervicalgia, bilateral upper extremity C6 radiculopathy, cervical spondylosis at C5-C6 and C6-C7, and cervical spinal stenosis at C5-C6, and C6-C7. Plaintiff’s medical treatment plan involved steroid injections, physical therapy sessions, at-home exercise plan, chiropractic sessions, general rest, and the medications of Maxalt and Ibuprofen.

As soon as 2011, Plaintiff’s chiropractor identified restrictions in Plaintiff’s ability to sit, stand, and walk, and diagnosed her with cervical disc syndrome, radicular neuralgia, cervical sprain, thoracic sprain/strain, lumbar sprain/strain, and segmental dysfunction along her spine. The chiropractor concluded that “Plaintiff could only return to work with significant accommodations: no more that 4-6 hours of work per day; no lifting, pushing, or pulling over 5-8 pounds; no bending, stooping, or climbing more that 8-10 times per hour; no squatting or kneeling; and no firm grasping or repeated use of hands.”

Based on the Plaintiff’s diagnoses and work restrictions in 2011, Unum granted Plaintiff’s request for disability benefits. During the next 10 years, Unum performed regular reviews of Plaintiff’s medical records and ongoing medical treatment of her disability. Plaintiff continued to visit her regular physicians and continued taking medications. She received chiropractic care that only provided her with temporary benefits according to her medical files. Unum’s own claim analyst, who performed a review in 2017, concluded that Plaintiff’s “diagnosis and symptoms have not gotten any better in the past year and remained consistent with no improvement in functional capacity.”

Bolstering Plaintiff’s arguments for long-term disability benefits, Plaintiff applied for social security and her case was evaluated by an administrative law judge. In 2018, after a hearing, an administrative law judge found Plaintiff’s medical complaints credible and well supported by the medical evidence. The judge determined that Plaintiff was entitled to social security disability benefits.

Despite the presence of overwhelming medical evidence of Plaintiff’s continued disability and work restrictions, Unum terminated her benefits based on flawed “paper reviews” by Unum’s in-house physicians. In 2020, Dr. Stewart Russell, M.D., without examining Plaintiff, opined that “he did not believe any functional restrictions were warranted based on Plaintiff’s medical records”, and “Plaintiff was only taking Tylenol, which he believed was insufficient to support a finding that her migraines caused any impairments.” A second Unum’s medical officer, James Lewis. M.D, who reviewed Plaintiff’s medical file without examining her, agreed with Dr. Russell’s opinion. Neither of Unum’s in-house physicians addressed Plaintiff’s ongoing medical treatment in the past 10 years, her specific diagnosis, and limitations that administrative Judge Flanagan found based on the medical records, and Plaintiff’s own physicians’ diagnosis and recommendations for treatment. Unum did not interview Plaintiff or any of her medical providers.

Additionally, in 2020, Unum hired a new vocational expert to review Plaintiff’s employment history of a cosmetic beauty specialist selling beauty products, and to provide an opinion of whether Plaintiff had the skills for alternative sedentary occupations that would provide a gainful wage. In contrast to two prior vocational experts’ opinions, Unum’s new expert applied a completely different standard of evaluation to Plaintiff’s file and concluded that Plaintiff had a “supervisory and managerial experience.” Unum argued that it reconsidered its interpretation of Plaintiff’s vocational history and overlooked her significant managerial and supervisory experience.

Despite Unum’s extraordinary efforts to rewrite history by claiming that Plaintiff was miraculously cured from a serious degenerative disease based on conservative medical treatment, and that Plaintiff had managerial experience, Judge Haywood S. Gilliam of the Northern District of California rendered judgment for the Plaintiff and ordered Unum to continue paying long-term disability benefits.

 On September 15, 2023, Judge Gilliam concluded that Plaintiff provided sufficient evidence to establish disability and that she was entitled to continued benefits. In his decision, Judge Gilliam provided the following reasons for his ruling: 1) There is no evidence that any of Plaintiff’s treating physicians ever concluded that Plaintiff’s back or neck pain improved, and have consistently found that Plaintiff’s pain stems from degenerative spinal problems; 2) Since 2010, seven different physicians have diagnosed Plaintiff with cervical and lumbar radiculopathies and spinal stenosis; 3) Throughout the time Unum paid Plaintiff’s benefits-and agreed that she was disabled- Plaintiff’s treatment was conservative, and Plaintiff’s doctors expressly recommended conservative treatment as appropriate for her condition; 4) Unum’s conclusion that Plaintiff had the kind of high-level management skills that would be transferable to a job outside of the retail sale of cosmetics is not supported by the record.

Based on the Court’s ruling in this case, the California district courts will support future disability recipients’ arguments that the lack of more intense treatment of a medical condition does not necessarily mean that the condition has meaningfully improved. If insurers attempt to claim that decreased medical treatment and decreased medications regime translate somehow in curing the medical condition giving rise to the disability, their arguments better be supported by experts’ opinions, preferably who have personally examined the claimant, and based on credible medical evidence in the administrative record. Otherwise, the Courts will give deference to the diagnosis and treatments by the claimant’s personal treating physicians, who are in a far better position to evaluate the claimant’s health and improvement. Moreover, the insurers must avoid the pitfall performing vocational evaluations that attribute skills to a claimant that do not exist based on a claimant’s job experience. We have found that disability insurers regularly mischaracterize job skills in order to reach a conclusion that other occupations exist which a claimant can perform when they evaluate whether a claimant can perform “any occupation” under a disability policy.   Hiring the right disability insurance attorney to find disability insurer’s errors can make all of the difference between winning or losing your case.

Disability insurance is meant to provide a financial lifeline when individuals are unable to work due to illness or injury. However, it is common for insurers to deny or limit disability claims based on a stringent application of the “any occupation” standard of disability in a long-term disability (“LTD”) policy and the imposition of short benefit periods for mental health conditions.

The Eighth Circuit Court of Appeals recently issued a decision, Weyer v. Reliance Standard Life Ins. Co., __ F. 4th __, 2024 WL 3577374 (8th Cir. Jul. 30, 2024), that can help support arguments made by claimants that their disability is based on an “any occupation” standard of disability and that their disability is based on a physical condition, not a mental-nervous condition, and therefore their benefits should be paid after 24 months.

Ms. Weyer made a claim for LTD benefits, which Reliance Standard approved and paid for two years. Her medical conditions included chronic fatigue syndrome/myalgic encephalomyelitis, Lyme disease, migraine headaches, neurocognitive disorder, brain fog, clostridium difficile colitis, irritable bowel syndrome, HHV-6, and malnourishment, anxiety and depression. The policy contained a typical provision that for the first two years of LTD benefits, the claimant is considered disabled if she is unable to perform the “material duties” of her own occupation, and after two years of receiving LTD benefits, she is considered disabled is she is unable to perform the requirements of any occupation. The Policy also had a 24-month limit on mental-nervous disabling conditions.

After Reliance Standard paid her LTD benefits for two years, it terminated her benefits on the basis that she did not meet the new definition of disabled and because the mental-nervous limitation applied.

Ms. Weyer had presented evidence of her inability to work from five treating doctors. Based on the evidence provided by these doctors, she was limited to being on the couch or in bed most of the time, with no screens, reading, or driving; the most activity she did was taking a gentle stroll for about 45 minutes on some days. Reliance Standard relied on evidence provided by a peer review doctor who reviewed her medical records but did not examine her or have any direct contact with her. Additionally, Reliance Standard presented video evidence of someone mowing a lawn, but it did not identify the person in the video as Ms. Weyer.

The district court used a de novo standard of review, meaning that it reviewed the administrative record and decided the case on the same evidence Reliance Standard had used to make its determination to terminate Ms. Weyer’s LTD benefits. The court found in Ms. Weyer’s favor and determined that she was entitled to LTD benefits pursuant to the terms of the policy. Ms. Weyer had presented ample evidence from her treating doctors supporting her claim.

Reliance Standard appealed to the Eighth Circuit Court of Appeals, arguing that Ms. Weyer was not disabled under the policy and even if she was, her physical disabling conditions were caused or contributed by her mental nervous condition, and therefore her LTD benefits would be limited to two years, which it had already paid.

The Eighth Circuit affirmed the district court’s decision that Weyer was entitled to LTD benefits beyond two years. It held that the district court, as the factfinder, reasonably interpreted what it saw as the overwhelming evidence in the record establishing that Ms. Weyer lacked even sedentary work capacity. On the other hand, the evidence cited by Reliance Standard in support of its decision to terminate benefits was viewed by the Eighth Circuit as not enough to conclude that a definite and firm mistake has been made.

The court also found no fault with the district court’s findings that Ms. Weyer’s physical conditions independently rendered her disabled and that Ms. Weyer’s anxiety and depression were not the cause of her disability but “simply downstream effects of her physical illness.” Reliance Standard had argued that even if Ms. Weyer was disabled due to physical conditions, that her mental nervous conditions had caused or contributed to those physical conditions, such that the mental nervous policy limitation applied and limited her LTD benefits to two years. However, the court found that at best, “there are two permissible views of the evidence,” Avenoso v. Reliance Standard Life Ins. Co., 19 F.4th 1020, 1026 (8th Cir. 2021), a determination which “is not enough for us to conclude the district court clearly erred,” Sloan v. Hartford Life &Accident Ins. Co., 475 F.3d 999, 1005 (8th Cir. 2007). The court also found that Reliance Standard had not pointed to any evidence in the record “leav[ing] us with a definite and firm conviction a mistake has been made.” Buchl v. Gascoyne Materials Handling &Recycling, L.L.C., 100 F.4th 950, 962 (8th Cir. 2024).

Had Ms. Weyer not properly addressed Reliance Standard’s determination as to her LTD benefits, she would have been left without benefits after two years, despite being indefinitely unable to work based on her physical condition. Despite the evidence from five treating doctors supporting her claim, Reliance Standard still terminated her benefits relying almost exclusively on its own peer review doctor and questionable evidence like a video of an unidentified person mowing a lawn. This happens all too often, where an insurance company will simply ignore a mountain of evidence while pointing to one or two minor points, which may not even be relevant to the issue. This is one reason that seeking legal counsel to handle a disability matter can be the difference between receiving LTD benefits under a policy and LTD benefits being improperly terminated after two years, or even denied altogether.

Weyer highlights the importance of providing complete evidence and properly addressing the insurer’s claim review and reasons for denying a claim or terminating benefits.