Court stops UNUM from denying disability benefits based on the plan’s “Self-Reported Symptoms Limitation”

The 7th Circuit Court of Appeals reverses district court’s holding that Unum Insurance Company could rely on its Summary Plan Description (“SPD”) as a basis for its decision to deny benefits to insured when the SPD did not contain any language about the self reported symptoms limitation. Unum failed to comply with the disclosure requirements set out by the Employee Retirement Income Securities Act of 1974 (“ERISA”), 29 U.S.C. § § 1000.

Procedural Background of the Case

Susie Weitzenkamp was awarded LTD benefits by Unum that were discontinued a little more than twenty-four (24) months later when Unum determined that Weitzenkamp had received all to which she was entitled under the plan’s self-reported symptoms limitation. Weitzenkamp appealed and after further review, Unum affirmed its denial decision. Weitzenkamp then filed a lawsuit in district court and Unum conterclaimed, seeking recovery of the overpayment by Weitzenkamp’s retroactive receipt of social security benefits.

The district court found that to the extent Unum’s discontinuation of benefits was based on a finding that she was not disabled, that decision was arbitrary and capricious. But the same court upheld Unum’s application of the self-reported symptoms limitation and concluded that Unum was entitled to $9,089 for its overpayment of benefits. Weitzenkamp appealed and Unum filed a conditional cross-appeal to preserve its right to appeal the district court’s determination that Unum’s finding of no disability was arbitrary and capricious in case the reviewing court reversed the district court’s judgment.

Unum Claimant was a Former Time Warner Cable Employee Disabled By Fibromyalgia and Depression

Susie Weitzenkamp worked at Time Warner Cable, Inc., and participated in an employee long-term disability plan (“the plan”) governed by ERISA and administered by Unum. The plan included a limitation which provided that benefits cease after 24-months for those with “disabilities, due to sickness or injury, which are primarily based on self-reported symptoms, and disabilities due to mental illness, alcoholism or drug abuse.” The plan further defined self-reported symptoms as “the manifestations of your condition which you tell your doctor that are not verifiable using tests, procedures or clinical examinations standardly accepted in the practice of medicine.”

As required under ERISA’s disclosure requirements, Unum provided Weitzenkamp and others covered by the plan with a Summary Plan Description (“SPD”). The SPD specifically limited payments for disabilities attributable to mental illness or substance abuse to 24-months. However, the same SPD never mentioned the self-reported symptoms limitation that Unum relied on in discontinuing Weitzenkamp’s benefits.

After being diagnosed with fibromyalgia, chronic pain, anxiety, and depression, Weitzenkamp was awarded LTD benefits under the plan. Her request was approved on July 25, 2006, and was retroactive to June 12, 2006, under a reservation of rights by Unum. The approval letter included language from the plan defining disability but did not mention the self-reported symptoms limitation. On January 29, 2007, Unum removed its reservation of rights but also invoked the self-reported symptoms and mental illness limitations, indicating it would pay benefits only until June 11, 2008 unless other conditions arose to which the limitations did not apply.

As required by Unum, Weitzenkamp applied for social security benefits and she was approved in September 2007 for an award that was retroactive to December 13, 2005. Unum subsequently reduced Weitzenkamp’s monthly benefit pursuant to a provision in the plan and its reservation of the right to recover any overpayments that resulted from a participant’s retroactive receipt of social security benefits. Although some of this overpayment was recovered, a balance of $9,089 remained.

On August 22, 2008, Weitzenkamp’s benefits were discontinued after a little more than 24-months. This decision was made after reviewing Weitzenkamp’s medical records and after acknowledging that she did not “have reliable, sustainable, functional capacity at any level of physical demand.” Unum nevertheless concluded that Weitzenkamp’s disability was primarily based on self-reported symptoms and mental illness and that she did not suffer from a severe enough physical condition to get around the 24-month limitation.

Weitzenkamp appealed through the plan’s appeal process and after further review, Unum affirmed its decision. Weitzenkamp then filed a lawsuit in district court to which Unum counterclaimed, seeking recoupment of the overpayment created by Weitzenkamp’s retroactive receipt of social security benefits.

District Court’s Ruling

The U.S District Court for the Eastern District of Wisconsin found that Unum’s decision to discontinue benefits was made in an arbitrary and capricious manner. Nevertheless, the court found in favor of Unum upholding Unum’s application of the 24-month self-reported symptoms limitation. The district court also concluded that Unum was entitled to its overpayment of benefits. Weitzenkamp appealed and Unum filed a conditional cross-appeal to preserve its right to appeal the district court’s determination.

7th Circuit Court of Appeals Ruling

The 7th Circuit Court of Appeals affirmed in part and reversed in part ruling that Unum had been arbitrary and capricious and could not rely on the self-reported symptoms limitation in the plan in discontinuing Weitzenkamp’s benefits. Reinstatement of benefits beyond the 24-month period was therefore appropriate. On review, the Circuit Court of Appeals considered three issues:

Issue #1: Whether Unum’s failure to include the self-reported symptoms limitation in the SPD estops it from relying on the limitation as a basis for its decision.

The Circuit Court of Appeals held that the omission of the self-reported symptoms limitation from the SPD precluded Unum from relying on the limitation as a basis for its decision to discontinue Weitzenkamp’s benefits. In making its determination, the court relied on statutory language from ERISA and various cases to extract the following guidelines:

The court reasoned that because the SPD failed to “reasonably apprise” the insured of the self-reported symptoms limitation and the limitation was relevant to a wide spectrum of plan participants, the SPD did not satisfy ERISA’S disclosure requirements and therefore Unum could not rely on the self-reported symptoms limitation in discontinuing Weitzenkamp’s benefits.

The court’s ruling in this case is a good example of a Federal Judge complying with the law and making UNUM comply with ERISA regulation. This case is a victory for disability claimants, however disability claimants should not think that all self-reported limitation clauses are invalid.

Whether Unum was entitled to recover overpayments it made to insured pursuant to the reimbursement provision in the plan when the Social Security Act provides that social security benefits shall not “be subject to execution, levy, attachment, garnishment, or other legal process.”

The Circuit Court of Appeals upheld the district court’s determination that Unum is entitled to recover $9,089 in overpayments it made to Weitzenkamp. Weitzenkamp argued that the Social Security Act precluded Unum from recovering any overpayment that resulted from her receipt of social security benefits. Weitzenkamp’s contention was that Unum’s counterclaim effectively sought an equitable lien on her social security benefits. The court specifically examined the following provision of the Social Security Act:

§ 207(a) provides that social security benefits shall not “be subject to execution, levy, attachment, garnishment, or other legal process.”

Pursuant to § 207(a), Unum cannot impose a lien directly on Weitzenkamp’s social security benefits. However, the court determined that because the $9,089 sought represented overpayments Unum paid to Weitzenkamp, rather than funds from social security, Unum’s recovery did not contravene § 207(a). Therefore, the Social Security Act did not bar Unum’s recovery for overpayments.

Whether Unum properly filed a cross-appeal to preserve its right to challenge the district court’s non-dispositive finding that Unum’s determination of no disability was arbitrary and capricious.

The court held that Unum’s conditional cross-appeal was procedurally improper. Because the district court had found that Unum’s determination of no disability was arbitrary and capricious, Unum filed a conditional cross-appeal, intending to preserve its right to challenge that finding in case the reviewing court reversed it. However, a cross-appeal would have been appropriate only if Unum sought a judgment different from that rendered by the district court.

Essentially, Unum’s cross-appeal operated as a means to advocate an alternate position for affirming the district court’s judgment that Unum’s decision was proper. The Circuit Court of Appeals explained that such an attack should have been raised by Unum in Weitzenkamp’s appeal. Because Unum failed to do so, it forfeited the ability to challenge the district court’s finding on the disability issue. Accordingly, the court dismissed Unum’s cross-appeal.

Conclusion

Because the plan’s self-reported symptoms limitation had not been included in Unum’s SPD, the SPD was found to violate ERISA disclosure requirements. As such, the limitation could not be used as a basis for discontinuing Weitzenkamp’s benefits. However, Unum did not violate the Social Security Act in recovering overpayments to which it had a claim for reimbursement. The Circuit Court of Appeals therefore held that Unum must reinstate Weitzenkamp’s benefits retroactive to the date payments were discontinued and that Unum is entitled to recovery of overpayments.

DISABILITY INSURANCE COMPANY INFORMATION
Videos, Questions, Resolved Cases, Lawsuit Summaries & Company Reviews

disability insurance companies complaints

Leave a comment or ask us a question

There are 5 comments

  • Abdul,

    Please feel free to contact our office so we can review the denial letter and your policy to discuss how we can assist you in appealing the denial of benefits.

    Stephen JessupNov 19, 2014  #5

  • I am also a TWC emploee. Last week Unum stopped my LTD benefits saying that I am no longer disabled even though they have all of the disability reports from my doctor. They left me with nothing. I need help to overturn their decision. Thanks.

    Abdul M. MarofNov 18, 2014  #4

  • Thank you Stephen. I have now requested a copy of the contract that was in affect when I went out.

    HelenOct 7, 2013  #3

  • Helen,

    Any and all potential sources of “Other Income Benefits” by which Unum could reduce your monthly disability benefit or require repayment from will be enumerated in your policy. Without knowing the policy language we would not be able to shed any light on the subject.

    Stephen JessupOct 6, 2013  #2

  • I too was a TWC employee of over twenty years service. I was placed on LTD by UNUM, awarded SS benefits, paid the recovery and am in the midst of a civil suit against TWC for discrimination among other non medical claims. My medical is well documented and having had four major surgeries the past two years so no question if I am now disabled.

    My question is this. In a settlement agreement TWC drafted they seem to be saying the settlement offer is for medical/illness and I suspect it is so UNUM can recover even more from what I desperately need for what would have been my retirement.

    Can anyone tell me if companies such as TWC have prearranged contracts with insurance companies such as UNUM to write into settlement offers language that allows openings to recover funds for civil suits and violation of your civil rights? Any help is appreciated.

    HelenOct 5, 2013  #1

FAQ

Do you help Unum claimants nationwide?

We represent Unum clients nationwide and we encourage you to contact us for a FREE immediate phone consultation with one of our experienced disability insurance attorneys.

Can you help with a Unum disability insurance policy?

Our disability insurance lawyers help policy holders seeking short or long term disability insurance benefits from Unum. We have helped thousands of disability insurance claimants nationwide with monthly disability benefits. With more than 40 years of disability insurance experience we have helped individuals in almost every occupation and we are familiar with the disability income policies offered by Unum.

How do you help Unum claimants?

Our lawyers help individuals that have either purchased a Unum long term disability insurance policy from an insurance company or obtained short or long term disability insurance coverage as a benefit from their employer.

Our experienced lawyers can assist with Unum:

  • ERISA and Non-ERISA Appeals of Disability Benefit Denials
  • ERISA and Non-ERISA Disability Benefit Lawsuits
  • Applying For Short or Long Term Disability Benefits
  • Daily Handling & Management of Your Disability Claim
  • Disability Insurance Lump-Sum Buyout or Settlement Negotiations

Do you work in my state?

Yes. We are a national disability insurance law firm that is available to represent you regardless of where you live in the United States. We have partner lawyers in every state and we have filed lawsuits in most federal courts nationwide. Our disability lawyers represent disability claimants at all stages of a claim for disability insurance benefits. There is nothing that our lawyers have not seen in the disability insurance world.

What are your fees?

Since we represent disability insurance claimants at different stages of a disability insurance claim we offer a variety of different fee options. We understand that claimants living on disability insurance benefits have a limited source of income; therefore we always try to work with the claimant to make our attorney fees as affordable as possible.

The three available fee options are a contingency fee agreement (no attorney fee or cost unless we make a recovery), hourly fee or fixed flat rate.

In every case we provide each client with a written fee agreement detailing the terms and conditions. We always offer a free initial phone consultation and we appreciate the opportunity to work with you in obtaining payment of your disability insurance benefits.

Do I have to come to your office to work with your law firm?

No. For purposes of efficiency and to reduce expenses for our clients we have found that 99% of our clients prefer to communicate via telephone, e-mail, fax, GoToMeeting.com sessions, or Skype. If you prefer an initial in-person meeting please let us know. A disability company will never require you to come to their office and similarly we are set up so that we handle your entire claim without the need for you to come to our office.

How can I contact you?

When you call us during normal business hours you will immediately speak with a disability attorney. We can be reached at 800-682-8331 or by email. Lawyer and staff must return all client calls same day. Client emails are usually replied to within the same business day and seem to be the preferred and most efficient method of communication for most clients.

Dell & Schaefer Client Reviews   *****

Lynn D. (Florida)

To all patients especially Lyme Disease patients (the #1 epidemic in the U.S. and worldwide pandemic) I truly understand your frustration and indecision in making your first phone call because everyone has let you down and you feel like your whole world is a struggle to stay alive. Your trust has been eroded due to ignorant medical professionals (I was one of them-RN), military (Gulf war syndrome-mycoplasma), NIH, DOD, and let’s not forget the CDC… your family or friends also may not have a clue and you can be certain most work places/H.R. they don’t want to hear what you are going through… well Make that Phone Call to and get connected with Rachel Alters who has intimate knowledge of others suffering medically.

She knows your legal rights and you as her client is her priority… She is a determined lady of the law and will get things done you can count on that. The kindness of Rachel and Kathleen, her assistant is comforting when understandably all you can envision is the worst outcome in any situation. Depend on your legal team (Rachel & al.) help you in the most important way: lowering your stress to better your health and the good Lord knows you need in this heartless country ($$$$) to pay for the health services you receive. Last word, may God bless you Rachel, Kathleen, and all the people at Dell & Schaefer for being there at my worst period in my life with neuroborrialis, which continues to compromise my life.

Read 424 reviews

Speak With An Attorney Now

Request a free legal consultation: Call 800-682-8331 or Email Us