Facing a long-term disability (“LTD”) claim, ERISA plan participants under LTD policies can count on the fact that insurance companies will search for ways to escape payment of the monthly LTD benefits they promised their insureds. These insurers often point out that insureds continue to work in their occupation between their initial diagnosis and the claim date, or that an insured’s job is sedentary and thus he or she is not precluded from performing light physical activities, or that an insured’s disabling condition is episodic and the symptoms do not render the insureds continuously disabled. Most disability claimants have days where symptoms are better than others and therefore they cannot work continuously in any given month, missing several days of work during the month. Most LTD policies contain a provision that after a certain amount of time (typically 24 months), the definition of “disabled” changes to an “any occupation” standard (e.g., must be unable to work in any occupation for which the insured is capable of performing given the insured’s education, training and experience). Insurers routinely deny LTD claims under the “any occupation” standard even when insureds cannot work with reasonable continuity during any given month. If an insured must miss work two or three times per month because of a medical condition, does the insured qualify for LTD benefits under the “any occupation” standard? As discussed below, the answer is “yes.”
This distinction was discussed in Delaney v. Prudential Insurance. Co. of America, 68 F.Supp.3d 1214 (D. Or. 2014) (“Delaney”). In Delaney, the District Court ruled that regular attendance at a job is requirement of virtually all jobs, and that being absent for at least two days of work precludes employment in any occupation. The plaintiff, Patricia Delaney, was an employee of Jeld-Wen Holding, Inc., and a participant in an employee benefits plan administered by Prudential Insurance Company of America (“Prudential”). Ms. Delaney worked as an escrow officer, involved in complex and sensitive real estate transactions on behalf of her employer.
In 2010, Ms. Delaney was diagnosed with Meniere’s disease in her left ear. Meniere’s disease creates problems in the inner ear that leads to bouts of dizziness, vertigo, nausea, vomiting and hearing problems. The affliction manifests itself in sudden attacks, of which Ms. Delaney had began to suffer. In the aftermath of the attacks, she was left exhausted, requiring tranquilizers to sleep for 4-6 hours before feeling better. The attacks themselves last for about an hour, and occur randomly.
After attempting to work around her attacks for almost two years, Ms. Delaney stopped working on March 12, 2012, as her attacks had become more frequent and debilitating. She reported 19 episodes in the month prior to her last day at work. With the problem diagnosed at “progressive and intractable” by her physician, she underwent surgery designed to stabilize her condition. Although she initially experienced some improvement, the episodes continued, leaving her, in her own words “pretty much house bound”; afraid to drive by herself, and suffering from unpredictable attacks with a distressing frequency. Id. at 1224.
Under the Plan with Prudential, a participant is considered “disabled” if she is “unable to perform the material and substantial duties of [her] regular occupation due to [her] sickness or injury. . . .” After 24 months of disability, a participant is “disabled” if “due to the same sickness or injury, [she is] unable to perform the duties of any gainful occupation for which [she is] reasonably fitted by education, training, or experience….” Id. at 1219.
In May of 2012, with no end to the attacks she was having in sight, Ms. Delaney applied for LTD benefits under her employer’s Plan with Prudential. After a denial of her claim for benefits, Ms. Delaney appealed Prudential’s decision twice, and sent updated medical records and witness statements attesting to the severity and frequency of her Meniere’s disease symptoms. Prudential denied both appeals, necessitating a lawsuit pursuant to the Employee Retirement Income Security Act of 1974 (“ERISA”) for the denial of her LTD benefit claim.
Reviewing the evidence on the record, the court found that the only reasonable conclusion was that Ms. Delaney was an unfortunate sufferer of Meniere’s disease’s persistent and intense symptoms. The court noted that Prudential steadfastly focused on the fact that Ms. Delaney’s job was not physically strenuous and that her symptoms affected her episodically, rather than continuously. The court found that Prudential applied the wrong standard under her Plan, as Ms. Delaney’s job required 40 hours of work per week and regular attendance. Since Ms. Delaney had already begun to exhaust her sick leave, this was a factor in the court’s finding that she was unable to perform her job duties despite her symptoms.
The court stated:
Regular job attendance is a requirement of virtually all jobs, and certainly a requirement of those jobs which would provide the requisite income to disentitle Delaney to LTD benefits under the Plan if she could otherwise perform them. In the social security context, legions of cases rest in whole or in part on vocational expert testimony that missing two or more days of work per month renders a claimant unemployable. See, e.g., Ghanim v. Colvin, 763 F.3d 1154, 1159 (9th Cir. 2014) (missing two or more days per month would preclude work as a kitchen helper or commercial cleaner); Brewes v. Comm’r of Social Sec. Admin., 682 F.3d 1157, 1163 (9th Cir. 2012) (missing two or more days per month would make claimant unemployable as a photocopying machine operator, laundry worker, or janitor); Yurt v. Colvin, 758 F.3d 850, 855 (7th Cir.2014) (vocational expert testimony that “in competitive employment workers were expected to be on task 80 to 85 percent of the time and could not miss more than one or two days per month and up to approximately ten per year”); Garcia v. Colvin, 741 F.3d 758, 760 (7th Cir. 2013) (vocational expert testimony that “a worker who misses work more than one day a month (beyond sick days, vacation days, and other authorized leave) would ‘have difficulty sustaining competitive employment’ ”); Douglas v. Bowen, 836 F.2d 392, 396 (8th Cir. 1987) (vocational expert testimony that if the claimant “had more than two absences a month due to his impairments, he could not find work in the national economy”). Id. at 1229-1230.
Accordingly, the court held that the record conclusively established that Ms. Delaney would miss more than two days of work per month due to the severe attacks she regularly and unpredictably suffered. Importantly, the court also addressed the debilitating fatigue that accompanied her attacks: “Even assuming that Delaney could perform her job as an escrow officer in the days after such an attack, the episodes and their immediate aftermath are sufficiently severe and occur with sufficient regularity that she would be absent from work at least to days per month, which in and of itself precludes employment.” Id. at 1231 (emphasis added). The court also found that Ms. Delaney was unable, after the first 24 months of disability benefit payments, to perform the duties of any gainful occupation for which she was reasonably fitted and awarded her LTD benefits under both the “regular occupation” and the “any gainful occupation” provisions of Prudential’s policy. Id.
All too often we see cases where an insurer denies LTD benefits based on the reasoning that episodic disabling conditions do not preclude sedentary work. However, as any employee knows, regular, consistent job performance and attendance is a necessary requirement for all employment. Delaney stands for the reasoning that when a disability claimant suffers from disease or illness and is incapacitated on at least two days a month, but is non-episodic on others, a claimant is still entitled to LTD benefits.