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.

Navigating the complexities of an ERISA (Employee Retirement Income Security Act of 1974) disability claim can be daunting, especially when your health and financial stability are on the line. One of the most critical players in the process of obtaining disability benefits under an ERISA policy is your healthcare provider. Understanding the role your healthcare providers play in your ERISA disability claim can have a dramatic impact on the outcome of your claim.

The Importance of Medical Evidence

Your medical evidence will be critical to substantiate your disability claim. Your healthcare providers’ documentation is pivotal in proving that your condition meets the criteria outlined in your disability policy. This evidence includes detailed medical records, test results, treatment histories, and ongoing health assessments. You must be able to show that your medical conditions cause restrictions and limitations that result in your inability to perform the substantial duties of your occupation or any occupation for which you are qualified by education, experience and training.

Detailed Medical Documentation

Your healthcare provider’s medical documentation must be comprehensive and precise. It should detail your diagnosis, the severity of your symptoms, treatment plans, and how your condition affects your ability to work. Insurers scrutinize these records to determine if your condition is as serious as you claim it is. Incomplete or vague documentation can lead to claim denials. Even something as minor as your healthcare provider making a handwritten note that is illegible or states information contrary to your assertions or claim can lead the insurance company to deny your claim.

Regular and Consistent Treatment

Consistency in treatment is another crucial aspect of your ERISA disability claim. Regular visits to your healthcare provider demonstrate that your condition is severe and ongoing. It also shows that you are actively seeking treatment and following medical advice. Insurers may view gaps in treatment or missed appointments as evidence that your condition is not as serious as you claim and use these things as justification for denying your claim.

Functional Capacity Evaluations

A significant part of your healthcare provider’s role involves conducting or referring you for functional capacity evaluations (FCEs). These evaluations assess your physical and mental capabilities and limitations. The results provide objective and subjective evidence about what activities you can and cannot perform, which is crucial for determining your ability to work. Your healthcare provider’s interpretation and endorsement of these evaluations carry substantial weight in your claim.

Detailed Letters and Reports

Your healthcare provider can also provide detailed “certification” letters and reports to support your claim. These documents, used to certify to the insurance company that you are disabled, should outline your medical history, current condition, prognosis, and how your disability prevents you from performing your job duties. A well-crafted letter from your healthcare provider, clearly connecting your medical condition to your inability to work, can be instrumental in securing your disability benefits.

Coordinating with Other Healthcare Providers

If you are seeing multiple healthcare providers, it is essential that your primary healthcare provider coordinates with them to ensure consistency in your medical records. Discrepancies between different providers’ notes can undermine your claim and lead to a denial. Consistent and corroborative reports from all your healthcare providers strengthen your case by presenting a unified picture of your disability.

Responding to Insurer Requests

Throughout the ERISA disability claims process, insurers may request additional information or clarification about your medical condition. Your healthcare provider must respond promptly and thoroughly to these requests. Delays or incomplete responses can result in claim denials or unnecessary delays in getting a decision or your benefits.

Expect the Insurer to Downplay Your Medical Evidence

Insurers often downplay medical evidence or “cherry pick” specific details from your medical records. They will take these details out of context while overlooking other significant evidence to present an inaccurate picture of your condition in order to justify denying your claim. You should be prepared for this by being familiar with your medical records and how they address your conditions, diagnoses, and symptoms.

Insurers will also utilize peer review or “paper review” specialists, or “independent” healthcare providers, hired by the insurer, to review your medical records and provide an opinion to the insurer as to whether you are able to do your job. Unsurprisingly, these healthcare providers often cherry pick your records and provide opinions that are overwhelming favorable to the insurer. Your healthcare provider can work with you to respond to unfavorable conclusions in paper review reports.

Preparing for Independent Medical Examinations (IMEs)

Insurers often require claimants to undergo independent medical examinations (IMEs) with physicians that they choose. While these physicians are supposed to be impartial, they are hired and paid by the insurance company, which can create a conflict of interest. Your healthcare provider can help you prepare for these exams by ensuring you understand what to expect and by providing you with a comprehensive summary of your medical condition to present during the IME.

The Appeals Process

If your initial claim is denied, your healthcare provider’s role becomes even more critical during the appeals process. He or she may need to provide additional evidence or write more detailed reports on

your behalf. An experienced and supportive healthcare provider can be a valuable ally during this challenging phase.

Communicating with Your Healthcare provider

Effective communication with your healthcare provider is essential. Keep your healthcare provider informed about your symptoms, how they affect your daily life, and any changes in your condition. Be honest and detailed during your consultations and ensure your healthcare provider understands the importance of detailed and accurate medical records for your disability claim.

Understanding the role your healthcare provider plays in your ERISA disability claim is essential for navigating the complexities of the process and improving your chances of a successful outcome. From providing comprehensive medical documentation to responding to insurer requests and supporting you during appeals, your healthcare provider is a crucial ally. By choosing an experienced healthcare provider, maintaining regular treatment, and ensuring effective communication, you can strengthen your claim and work towards securing the disability benefits you need. If you have any questions about your disability claim or your healthcare provider’s role in your claim, reach out to the experienced attorneys at the McKennon Law Group PC for a free consultation.

The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law designed to protect the interests of employee benefit plan participants and their beneficiaries. While ERISA applies to various types of employer-sponsored benefit plans, its application to self-funded health and disability plans is particularly significant and is not well understood. Understanding how ERISA governs self-funded plans can be vital to ensuring that you can adequately protect the rights to which you are entitled as a plan participant or beneficiary under an ERISA plan.

What is a Self-Funded Plan?

A self-funded (or self-insured) health and disability plan is one in which the employer assumes the financial risk for providing healthcare and disability benefits to its employees. Unlike fully insured plans, where an insurance company underwrites the policy and bears the risk, a self-funded plan means the employer directly pays any benefits. Often, employers will contract with third-party administrators (TPAs) to handle claims processing and administrative duties, but the financial responsibility remains with the employer.

Key ERISA Provisions for Self-Funded Plans

1. Preemption of State Laws: A prominent feature of ERISA is its preemption clause – as federal law, ERISA, rather than state law, governs employee benefit plans. It also exempts employers from state insurance regulations. This aspect of ERISA benefits self-funded plans by allowing employers to operate with uniform expectations, and therefore higher efficiency, regardless of what state they are in. Because they are not typically considered insurance under state laws, these plans are generally not saved from preemption.
2. Fiduciary Duties: ERISA imposes stringent fiduciary responsibilities on those who manage and control plan assets. Fiduciaries must act solely in the interest of plan participants and beneficiaries. This includes adhering to prudent management practices, avoiding conflicts of interest, and ensuring that plan assets are used appropriately. For self-funded plans, the employer or designated fiduciaries must be diligent in meeting this duty; when an employer breaches a fiduciary duty owed to an employee, the employee may pursue its damages directly from the employer, as opposed to an insurance company or third party.
3. Plan Documentation and Reporting: ERISA mandates comprehensive documentation and reporting requirements for self-funded plans. For example, plan participants must be provided with a Summary Plan Description as well as information about any updates or amendments to the plan, and a report of the Plan must be filed every year with the Department of Labor.
4. Claims and Appeals Procedures: ERISA requires self-funded plans to establish fair and transparent claims and appeals procedures. Plans must give participants a process for filing claims and appealing denied claims. The purpose is to ensure that each claim gets a full and fair review.

Advantages and Drawbacks of Self-Funded Plans under ERISA

Many employers choose self-funded plans based on the advantages they offer under ERISA, including:

1. Cost Savings: Fully insured plans include factors that employers can avoid by self-funding, like insurance profit margins, risk charges, and administrative costs. This tends to be particularly beneficial to large employers with predictable healthcare expenses.
2. Plan Customization: Self-funded plans allow employers to obtain coverage that fits their specific needs, including features unavailable in fully insured plans, like wellness programs or disease management initiatives.
3. Control Over Plan Design: Employers have more control over the terms and conditions of the plan, allowing them to make decisions that best align with their business objectives and employee needs. This includes determining coverage levels, provider networks, and cost-sharing arrangements.
4. Cash Flow Benefits: Self-funding can save employers substantial money in high insurance premiums, allowing them to put the money they would otherwise spend on premiums to better use.
5. Preemption of Adverse State Laws: Self-funded plans are typically not governed by state laws that otherwise apply to insured plans.

While self-funded plans offer numerous benefits, they also present challenges that employers must navigate to ensure compliance and effective plan management:

1. Financial Risk: The main issue with self-funded plans for employers is the assumption of financial risk. Employers must be prepared to cover unexpected high-cost claims, which can be particularly challenging for smaller employers.
2. Regulatory Compliance: Maintaining compliance with ERISA’s fiduciary duties, reporting requirements, and claims procedures can be complex and challenging. Employers must stay informed about regulatory changes and ensure their plan administration practices meet ERISA’s standards.
3. Administrative Burden: Managing a self-funded plan requires significant administrative effort. Employers often rely on TPAs for claims processing and plan administration, but they must still oversee these activities to ensure compliance and effective plan operation; self-funded employers may be held liable even when a TPA is at fault for violating a claimant’s rights.

For employers, self-funding a plan may have both benefits and drawbacks. Self-funding allows employers more flexibility with plan design and can help keep premium payments as low as possible. However, self-funding employers also take the risk of having to cover unpredictable and expensive claims. If you or someone you know has brought a claim under a self-funded ERISA plan that you think has been improperly denied, reach out to the McKennon Law Group PC for a consultation at no charge.