Many individuals around Chicago with long term disability insurance, facing a disabling condition ask themselves, “How long do I have to be disabled until I can receive disability benefits?” and “What if my conditions improve while I am waiting?” The answers to these questions will vary depending on the definitions in the applicable insurance plan document—usually tied to something called an “Elimination Period”—and the stage of the administration process in which the event occurs. These subtle differences often are the determining factor in actions to recover disability benefits under ERISA § 502(a).
The Elimination Period is defined term in the long term disability plan. It represents the amount of time you must be continuously disabled before you may begin collecting disability benefits under that policy or plan. Employers sponsoring long term disability insurance plans usually coordinate the negotiated Elimination Period of the long term disability insurance plan with the duration of the employer’s short term disability plan. In order to be approved for long term disability benefits, the employee must show that he or she meets the plan’s definition of disability during this Elimination Period. An employee’s potential benefits will therefore begin the day following the Elimination period, rather than the day the disability began (if an employee has Short Term Disability benefits, those should kick in much sooner). If an employee’s disability totally subsides during the Elimination Period, he will likely not be entitled to long term disability benefits. But, when an employee has a condition that waxes and wanes or shows some intermittent improvement, but not enough improvement to return to his occupation—benefits should not be jeopardized, as shown in a recent case.
In Evans v. Sun Life & Health Ins. Co., No. 13-55601, 2015 U.S. App. LEXIS 6688 (9th Cir. Apr. 22, 2015), the policy’s Elimination Period was 180 days. Thus, using December 2, 2007 as the starting disability date, he needed to show that he was disabled at least through May 31, 2008 before he was eligible for benefits. In an appeal of his original claim for benefits, Mr. Evans’s doctor noted “significant improvement” during his elimination period, yet maintained that he would not be able to function as an attorney, especially a full-time attorney. Sun-Life denied Mr. Evans’s appeal, in part because it found that the this improvement and the medical records did not support a finding that he was totally disabled during the 180-day Elimination Period. The court determined that while Mr. Evans’s condition had improved during the course of his treatment, at no point did either of his doctors determine that he was able to return to his regular work. The insurer had failed to evaluate Mr. Evans’s improvement in the context of his overall functional ability to work. Instead, it emphasized that there was improvement as an excuse to deny benefits. Ultimately, the court found that Sun Life had abused its discretion in denying Mr. Evans’s claim for long term disability benefits because the evidence in the record overwhelmingly supported that Mr. Evans was disabled from working throughout his elimination period. A video of the oral argument on appeal appears here.
It is important to show insurers your “whole health picture” before they make a benefit determination, particularly when you showed some improvement on a single day or intermittently. If you have become disabled and have been denied long term disability benefits because of improvement that you showed during the Elimination Period or thereafter, contact an experienced ERISA attorney to help you appeal that determination.