Tennessee Disability and Life Insurance Blog
Plan administrators will often deny claims for total disability benefits on the basis that the claimant is still able to work. However, under precedent in Tennessee and in the Sixth Circuit, you can hold a full-time job and still qualify for total disability benefits, unless your policy says otherwise.
In Nylander v. Unum Life Ins. Co. of Am. (M.D. Tenn. 2018), our firm represented the plaintiff, an experienced OB-GYN, who suffered an accident that prevented her from performing surgeries. Despite her disability, the plaintiff was still able to maintain a clinical practice. After Unum denied her claim for total disability benefits, the plaintiff filed suit. In her suit, she requested an award of total disability benefits, or, alternatively, benefits for partial disability (sometimes referred to as “residual disability”).
Unum filed a motion for partial summary judgment asking the court to dismiss the plaintiff’s claim for total disability benefits in part because she was still able to work as a physician. The court, however, turned its attention to the language of the plaintiff’s policies. Under the policies at issue, the plaintiff entitled to total disability benefits if she could not perform the “important” and “material and substantial” duties of her occupation.
In denying Unum’s motion, the court concluded that it was an issue of fact as to whether the plaintiff’s ability to maintain a clinical practice meant that she was performing the important, material and substantial duties of her job. The court reasoned that a “determination of total disability does not require a state of absolute helplessness or inability to perform any task relating to one’s employment.”
Similarly, under ample precedent in the Sixth Circuit, an insured does not need to be unable to work completely in order to qualify for total disability benefits. This is the case even if the policy at issue provides for residual or partial disability benefits. That may seem counter-intuitive; after all, aren’t partial disability benefits for those whose disability is not so severe that they are unable to work at all? Just like in Nylander, however, a court’s analysis of a plan administrator’s denial of disability benefits turns on the language of the policy.
In Leonor v. Provident Life & Acc. Co. (6th Cir. 2015)¸ the plaintiff was a dentist who spent approximately two-thirds of his time performing dental procedures and approximately one-third managing his dental practices and other businesses that he owned. Although his disability prevented him from performing dental procedures, it did not restrict him from operating his other businesses.
The Provident policy at issue in that case defined total disability as being “unable to perform the important duties of Your Occupation.” The same policy defined residual disability benefits as being “unable to perform one or more of the important duties of Your Occupation…”—along with a loss of earnings of at least 20 percent.
In closely analyzing the language of the Provident policy, the Leonor court held that it was not necessary for the plaintiff to be unable to perform all the important duties of his pre-disability occupation in order to qualify for total disability benefits. The insured just needed to show that he or she was unable to perform a “substantial number” of those important duties in order to qualify for total disability benefits. As a result, the Leonor court held that the plaintiff was “totally disabled” because he could not perform the important duties that occupied approximately two-thirds of his time.
The Leonor decision may have seemed surprising, particularly since the plaintiff was actually earning more money after his disability due to his increased focus on managing his other businesses. However, the Provident policy did not define “total disability” in terms of lost income. As a result, the Leonor court held that “while income can be relevant to an analysis of total disability, it is far from dispositive.”
In both Nylander and Leonor, the disability policies were not governed by ERISA. As a result, the courts interpreted those policies according to the contract law of the plaintiffs’ states. In cases involving employee benefit policies covered by ERISA, courts will usually give deference to the plan administrators’ interpretations of the policies, as long as they don’t conflict with the plain language of the plans. Even still, several courts have affirmed the principle that the insured does not need to be “utterly helpless” in order to qualify for total disability benefits.
An insurance company’s or plan administrator’s award of total disability benefits is usually dependent on a series of facts, from the insured’s medical condition and diagnosis, to the physical and cognitive demands of his or her job. The policy language itself, however, may be equally important in determining whether the insured is totally disabled. In our firm’s experience, many insurance companies often fail to justify a denial of total disability benefits based on a fair reading of the policy language. The bottom line is that the policy language and the claimant’s ability to work are determinative—not just the claimant’s ability to work. If you’ve been denied total disability benefits, contact an experienced disability law firm to analyze your case and determine whether you should challenge the insurance company’s decision in court.