Court Agrees: Principal Life Correctly Terminated Disability Benefits
Author: Attorney Gregory Dell
In Winkler v. Principal Life Insurance Company, Thomas Winkler, a financial planner, collected 24 months of disability benefits when he was unable to work in his own occupation due to his neuromyelitis optica, also known as Devic’s Syndrome. At the time he became disabled, he was covered by a policy that was later amended to provide a wider, more encompassing, definition of disability. Winkler argued that, in addition to his benefits being wrongfully terminated, he should be covered under the amended policy. The Florida federal district court sided with Principal Life on both issues.
Winkler Was Not Covered by the Amended Policy Terms
Winkler became disabled in 2002 and was granted 24 months of disability benefits due to his inability to work in his own occupation. After 24 months, the definition of disability changed. Meanwhile, in 2003, Principal Life changed the definition of disability that was more favorable to Winkler. He tried to convince the court that the 2003 policy should apply to his case.
Winkler cited to a court decision that held, “an ERISA cause of action based on the denial of benefits accrues at the tie benefits are denied, and the plan in effect when the decision to deny benefits is controlling.” The court said Winkler was wrong. In the case he cited, the claimant had been covered by both policies: the one that was in effect when he became disabled and the later amended one as well.
In Winkler’s case, he would only be covered by the amended policy if, at the time it was amended, he was “a full-time employee” who regularly worked “at least 30 hours a week.” Since Winkler did not fit this definition, he was not covered by this amended policy. For the court to hold that he was, it would be tantamount to the court holding that “one is entitled to benefits under a policy so long as the policy is ‘in effect’ anywhere, any time, and for anyone, even though the individual applying for benefits is not covered by the policy. Such an argument is logically absurd.”
Principal Life Correctly Decided that Winkler Was Not Entitled to Benefits
The definition of disability applicable to Winkler’s claim required him to be unable to perform the material duties of “any occupation” for which he was qualified or could reasonably become qualified based on his “education, training, or experience” and was able to make a certain amount of money in comparison to his earning in his own occupation.
The court upheld Principal Life’s termination of benefits after reviewing all the evidence, including:
- Winkler’s treating neurologist wrote a letter saying his condition had improved and there were “no restrictions.”
- Winkler’s treating ophthalmologist reported his double vision had been “resolved.”
- A Functional Capacity Exam (FCE) indicated Winkler could work a full eight-hour day at a “medium” level. His own occupation required work at a sedentary level which is less strenuous than a medium level.
- A board-certified neurologist review Winkler’s medical records, the FCE and conferred with his treating physician. Both doctors agreed that Winkler could work in his own occupation as long as he was allowed 15-minute rest periods every two hours.
- An analysis of his earnings within the parameters of the policy.
The court concluded that, “in the light most favorable to Winkler,” he was not disabled from his own or any occupation.
This case was not handled by our office, but it may be instructive to those who are seeking benefits when the definition of disability changes after 24 months. If you have a question about this case, or any disability benefits issue, call one of our attorneys for a free case evaluation.