Employees in Chicago and the rest of Illinois often have a sound understanding of what entitles them to disability benefits from Social Security, but do not learn about the multiple standards of disability in long-term disability insurance policies until they make a claim for the disability benefits. Most, but not all, policies have two different definitions of “disabled,” and neither usually requires the claimant to be completely helpless in order to trigger coverage. Most group disability insurance policies, sponsored by an employer, will initially provide disability benefits if the claimant is unable, due to illness or injury, to perform the material duties of his “own occupation,” or “regular occupation.” The definition may also specify that the inability means unable to earn more than a certain percentage of pre-disability earnings, such that if you could only work part-time due to the illness or injury, coverage could be triggered.
These definitions transform what many think is purely a medical inquiry into a multi-faceted inquiry. There is the medical component, but also there is the vocational component in defining what the material duties of the governing occupation are. Insurers often gloss over applying medical restrictions and limitations to the actual duties of the occupation in favor of generally categorizing an occupation as merely “sedentary,” according to the Department of Labor’s Dictionary of Occupational Titles. Aetna recently made this mistake when terminating somebody’s long-term disability insurance.
In McDonough v. Aetna Life Ins. Co., No. 14-1293, 2015 U.S. App. LEXIS 6153 (1st Cir. Apr. 15, 2015), the claimant was a senior technology analyst who suffered a stroke. Aetna began paying the claimant, but then terminated the benefits after determining he sufficiently recovered to be able to perform a “sedentary” occupation full-time. Aetna did not consider the demanding and high stress nature of the job, requiring McDonough to be on call at all times. After suing for the benefits under ERISA § 502(a) and appealing to the First Circuit Court of Appeals, court clearly stated that “To assess a claimant’s ability to perform his own occupation, a decision maker must be aware of, and apply, the requirements of the occupation.”
Contrary to popular belief, disability insurance does not only compensate you if you are completely unable to work. Instead, it provides you coverage if you are unable to do a particular type of work you once did or cannot work in that capacity full-time. Most policies contain a transitional definition of “disabled” to that of “any occupation” after a period of anywhere from 12–36 months, depending on the policy. There, you can be denied coverage if you can do another type of work, but the alternative work will usually have to meet a certain earnings requirement defined in the policy.
If you have an illness or injury that inhibits your ability to work, even if not completely rendering you helpless, consult a knowledgeable ERISA attorney about your options under your employer’s disability insurance plan.