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Long-Term Disability Insurers Cannot Ignore, and Cannot Unreasonably Discount, the Subjective Symptoms of their Insureds

Short-term disability and long-term disability insurers very often deny claims for benefits by stating that the claimant’s alleged restrictions and limitations are not supported by the claimant’s medical records.  While a broad statement like this can mean a number of things, it often means that an insurer does not believe an insured’s complaints of pain or other subjective symptoms are disabling as they have not been proven by objective evidence.  However, insurers will rarely state in their denial letters that they do not believe an insured has the subjective symptoms reported because there is no objective proof of such symptoms.  Rather, they will typically ignore or downplay an insured’s subjective complaints and simply state that the medical records show that the insured can perform their occupational tasks and is thus not disabled under the terms of the policy.  However, as the Ninth Circuit continues to make clear, it is an error to require objective medical evidence of complaints that are inherently subjective in nature.  See Montour v. Hartford Life & Acc. Ins. Co., 588 F.3d 623, 635 (9th Cir. 2009).

Recently, the District Court for the District of Oregon in Williams v. Reliance Standard Life Ins. Co., No. 3:15-cv-00589-HZ (D. Ore. February 22, 2016), made clear that insurers cannot dance around the fact that they are demanding objective proof of subjective complaints by simply disregarding an insured’s subjective symptoms.  In Williams, the insured, Randal Williams, applied for long-term disability insurance benefits with his insurer reporting symptoms of loss of vision, sweating, motion sickness, nausea, vomiting, and throbbing headaches.  Despite numerous treatments and examinations, doctors were unable to adequately treat or even diagnose the Mr. Williams’ condition.  Mr. Williams attended two independent medical examinations (“IME”) at the request of his disability insurer, and while both doctors indicated that Mr. Williams complained of visual disturbances, nausea, and headaches, they both explained that his subjective complaints were unaccompanied by objective clinical findings, and there was no objective functional impairment based on their examinations. The doctor that performed the second IME, Dr. Bell, specifically indicated that she was instructed to fill out the patient’s Physical Capabilities forms based on objective findings only, and indicated Mr. Williams did not have any limitations based on objective neurological findings.  She did, however, indicate that her primary diagnosis would be to rule out a possible somatoform disorder.

The insurer later discontinued Mr. Williams’ long-term disability benefits after the definition of disability changed from being unable to perform his duties in his “regular occupation” to being unable to perform duties in “any occupation.”   The insurer determined that Mr. Williams was capable of light work activity and he therefore no longer satisfied the requirement for total disability.   After Mr. Williams brought an action against his insurance company under ERISA to challenge the termination of his disability insurance benefits, his motion for summary judgment was granted.

In reaching its decision, the court relied on the District Court’s decision in Hegarty v. AT&T Umbrella Benefit Plan No. 1, 109 F.Supp.3d 1250, 1256 (N.D. Cal 2015) (which in turn relied on Salomaa v. Honda Long Term Disability Plan, 642 F.3d 666, 676 (9th Cir. 2011)) for the proposition that “‘in cases where the claimant’s disabling condition is not one for which the medical community can provide objective evidence,’ it is arbitrary and capricious to deny the claim for lack of such evidence.”  See also.  The court noted that the insurer implicitly rejected Mr. Williams’ subjective reports of disabling symptoms by interpreting the reports and Physical Capabilities forms to support a finding that Mr. Williams could perform light or sedentary work.

The court then ruled that Mr. Williams’ insurer abused its discretion by relying on Dr. Bell’s diagnosis and assessment, as it was arbitrary and unreasonable to disregard Plaintiff’s subjectively-reported limitations, stating:

Defendant abused its discretion by relying on Dr. Bell’s diagnosis and assessment. First, Dr. Bell’s functional assessment was, as she indicated, based on objective evidence only. In fact, Dr. Bell stated that she had been instructed to complete the Physical Capabilities form on that basis. For the reasons explained in the previous section, it was unreasonable to disregard a functional assessment that did not account for Plaintiff’s subjective symptoms.

The court then held that the insurer erred in even considering Dr. Bell’s “actual rule out somatoform disorder diagnosis,” as it was “not a diagnosis at all, but a rule out, meaning a suggested diagnosis that must be ruled out.” (parentheticals omitted).  Because it was not a definitive diagnosis, it was unreasonable for Defendant to consider it.

As this decision demonstrates, insurers in the Ninth Circuit cannot rely solely upon objective findings when subjective complaints are at issue.  Insurers should only consider definitive diagnoses when making benefit decisions, even if a condition can only be observed through subjective complaints.  Despite the courts’ continued reiteration that insurers cannot demand objective evidence of medical conditions that are subjective in nature, either explicitly or through willful ignorance of subjective complaints, there is little doubt that insurers will continue to deny valid claims by discounting subjective complaints and requiring objective proof of them.

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