Long Term Disability Insurer Improperly Terminated Benefits Based on Surveillance

Disabled employees in Chicago and the rest of Illinois who are receiving long term disability insurance benefits under an employer sponsored plan frequently call my office explaining that they suspect the insurer has placed them under surveillance. I find people are usually unnecessarily afraid of the fact they have been under surveillance. There was a time when if insurers captured surveillance footage of a disability benefit recipient doing anything like grocery shopping, or picking up a prescription, they would almost automatically terminate the benefits. But any surveillance footage must be viewed in comparison to what the insurer thought the insured’s functional imitations were. In a recent case, Prudential improperly terminated a person’s disability insurance benefits based on surveillance footage showing the person doing nothing inconsistent with what she reported. Davis v. The Prudential Insurance Company of America, No. 11-13688 (E.D. Mich. Sept. 28, 2012).

The United States Court of Appeals for the Seventh Circuit has clarified under what circumstances an insurer may rely upon surveillance evidence in terminating disability benefits. The insurer may rely on eh surveillance video where the video shows the disabled claimant doing things that he or she claimed to be unable to do. Marantz v. Permanente Med. Group, Inc. Long Term Disability Plan, 687 F.3d 320, 329 (7th Cir. 2012) (holding the administrator did not abuse its discretion in relying on surveillance where the claimant was observed performing multiple physical activities she reported she could not perform, and did so multiple days in a row); Mote v. Aetna Life Ins. Co., 502 F.3d 601, 609 (7th Cir. 2007) (holding the administrator properly considered surveillance because it showed the claimant performing activities she reported in her application she could not do). However, just because the video shows the claimant doing something does not make the footage inconsistent with the claimant’s reported abilities. See Osbun v. Auburn Foundry, Inc., 293 F. Supp. 2d 863, 870 (N.D. Ind. 2003) (“[E]vidence that Osbun can perform light physical tasks for 1.5 hours over two days falls far short of demonstrating that he is capable of sustaining a job. Auburn produced no evidence showing how long Osbun can perform such tasks, whether he can perform them on a daily basis, or how much pain he must endure in the process.”).

If you are receiving long term disability insurance benefits, and suspect you have been placed under surveillance, speak with a knowledgeable ERISA lawyer.