American United Life Insurance disability denial reversed for woman with fibromyalgia, depression and migraines

This disability insurance denial by American United Life Insurance Company (American) and Disability Reinsurance Management Services is a classic example of a disability insurance company’s effort to convert a physical disability claim into a mental nervous claim only. Most disability insurance policies limit disability benefits to 24 months for a mental nervous condition, therefore disability companies will try to argue that a claimant is only disabled by a mental condition and not physical. This argument is frequently raised by insurance companies when a person has a medical condition like fibromyalgia which cannot be verified by any objective testing.

Fibromyalgia continues to be a frequent cause of short term and long term disability insurance claims. While not everyone who suffers from fibromyalgia becomes disabled, those who do, often find it difficult to secure their rightful long-term disability benefits. Hiring a long-term disability attorney early can make a tremendous difference in the outcome of an ERISA governed disability claim.

Melissa Alexander had participated in a group disability insurance policy offered by her employer, Computer Software Innovations, Inc. She worked with the company as a programmer manager from August 1, 1990 until June 14, 2004. Her job was primarily sedentary. She sat most of the time, but walked occasionally on the job, and occasional bending, stooping or reaching above the shoulder was required.

She was forced to leave her job because of chronic joint and muscle pain, so she applied for benefits under the disability insurance policy provided by American United Life Insurance Company on July 1, 2004. In her application, Alexander based her disability claim upon her migraine headaches and chronic pain. She submitted her medical records along with two attending physician statements – one from her internist and one from her physiatrist. Her internist supported her claim of chronic pain. Her physiatrist supported her claim of arthralgias.

American approved her long-term disability application under the “own occupation” definition of disability included in the policy. For some reason, after her initial submission, Alexander began submitting attending physician statements from her psychiatrist. The psychiatrist concluded that she was disabled from her position as a programmer manager due to her mental state. His notes made no mention of her physical condition.

When the two-year mark approached, American hired Disability Reinsurance Management Services, Inc. as a third party administrator to review Alexander’s file. This third-party company concluded that her physical symptoms were not a limitation to working in a sedentary position, and that her primary disability was psychological or mental. On September 22, 2006, American notified Alexander that her long-term disability benefits had ended on September 14.

The letter notified Alexander that her medical records demonstrated that her primary disabling condition was depression, and that the benefit package limited coverage for mental illness to 24 months. They also noted that the remaining medical information in her file indicated that she was capable of working in her own occupation. Thus American United was terminating her benefits.

Alexander appealed this decision, so her file was sent for review to a board-certified rheumatologist. The rheumatologist concluded that Alexander symptoms did meet the 1990 criteria of the American College of rheumatology for the diagnosis of fibromyalgia. At the same time, he questioned the legitimacy of her upper and lower back complaints because the medical file failed to contain significant findings on examination or any changes in imaging studies that would indicate a reason for these complaints.

Alexander’s medical records were then forwarded to a psychiatrist/neurologist. This physician found that Alexander’s treatment program didn’t appear to be appropriate for severe depression. He also concluded that one of Alexander’s physicians was incompetent for treating her for rheumatoid arthritis when there were no findings to support the condition. He questioned the lack of findings that supported the diagnosis of fibromyalgia as well. He concluded that her primary impairing condition was depression and anxiety.

Disability attorney provides evidence supporting fibromyalgia

Alexander’s long-term disability attorney considered the findings of these two reviews and secured additional documentation to support her appeal. One of the documents included Alexander’s affidavit regarding her physical and mental condition and how these factors affected her daily activities. The disability attorney also submitted an affidavit from her active treating physician along with her medical records to support her diagnosis of fibromyalgia. Her ERISA attorney also submitted additional medical records from four other physicians who had described or diagnosed Alexander’s chronic pain disorder.

This additional information failed to convince American that Alexander was disabled by her physical limitations, and American upheld its decision to terminate her long-term disability benefits. This led Alexander’s long-term disability attorney to file an ERISA disability lawsuit on January 22, 2007.

Court determines standard of review

Unlike most benefit plans, American was not given discretionary authority. Both Alexander’s ERISA disability lawyer and Americans attorneys agreed the proper standard of review for the Court to apply was de novo. This meant that the Court would be able to review the evidence in Alexander’s administrative record and determine whether or not she was totally disabled without having to give deference to American’s decision.

Why did American terminate long-term disability benefits?

American claimed it had terminated Alexander’s long-term disability benefits based on the language of the policy. The policy stipulated that disability coverage for the first two years covered an individual who couldn’t perform the material or substantial duties of his/her regular occupation. The policy also stated that after two years, the individual had to be unable to perform any gainful occupation for which that individual’s training, education or experience prepared them to perform. An additional clause in the policy limited benefit coverage for mental illness to only 24 months.

American had concluded that Alexander’s condition did not prevent her from working in her own occupation, thus she would also be able to work in any occupation. And because of the mental health limitation, Alexander had exhausted all the benefits available to her under the policy.

The Court considers the original basis for approving long-term disability benefits

The administrative record showed that Alexander was originally approved for disability on the grounds of her physical disability. When Alexander began sending attending physician statements from her psychiatrist, it appears that American concluded that her disability was no longer physical but mental instead. Yet on appeal, Alexander provided medical records that confirmed she had continued to see a number of physicians as well for pain management and to cope with her fibromyalgia.

When Alexander’s disability attorney presented the treating physician statements that confirmed her physical condition, American was not free to ignore these reliable opinions and medical evidence. But it appears that American did exactly this, even going so far as to ignore the fact that one of its own expert reviewers stated that Alexander’s symptoms fit the 1990 criteria for fibromyalgia accepted by the American College of Rheumatology.

The Court found the issue in Alexander’s case compared with Cothran v. Reliance Standard Life Ins. Co, a case where the claimant suffered from a combination of physical and mental/nervous conditions. In this case, the Court ruled that when the claimant suffers from a combination of physical and psychiatric problems, a disability insurance policy cannot invoke the mental illness limitation. This ruling was affirmed on both the District and Court of Appeals levels.

American asked the Court to consider two other cases which it claimed applied. Tumbleston v. A.O. Smith Corp. and Lynd v. Reliance Standard Life Ins. Co. In Tumbleson, the claimant had never reported a physical disability until the disability payments stopped. In Lynd, the claimant likewise had been treated for major depressive disorder, yet wanted the Court to consider the ailment physical instead of mental. The Court found neither case applied to Alexander.

Her claim, like Cothran, had always included the component of her physical limitations. Her disability attorney admitted that her condition was a combination of mental and physical disability, but that she was entitled to long-term disability benefits based upon the physical component of her disability. The Court affirmed.

Court finds American wrongfully terminated long-term disability benefits

The Court found that Alexander had a right to long-term disability benefits. It also recognized American had the right to adjust its obligations to Alexander by the difference of any Social Security benefits that Alexander had received. Alexander’s disability attorney informed the Court that she had not received any Social Security benefits at that time, so the Court did not issue a finding on this matter. Rather the Court limited its decision to reversing American’s denial of Alexander’s long-term disability benefits.

Leave a comment or ask us a question

There are 4 comments

  • D,

    Unfortunately, yes. An insurance company can disagree with your doctor’s opinion as to your ability to work. The term commonly used is diagnosis does not equal disability. Meaning, just because you have a medical condition it does not meet you are disabled under the terms and conditions of your policy. A nexus has to be drawn to demonstrate how your condition impacts your ability to work. Furthermore, most policies do require you to undergo examination with a doctor of their choosing. From what you indicate, it would seem the carrier is looking to set up your claim for a denial.

    Stephen JessupMar 5, 2014  #4

  • Are disability insurance companies allowed not to make a determination of disability even though two qualified doctors have diagnosed me with Fibromyalgia, (FM)? Completed is the six month period of verification and it is now 6 months later with no determination. Do they have a time frame in which they have to make a determination or can they drag this on? I live in Ohio, USA.

    1.) As per the policy, FM is covered for 24 months even though they consider it a long-term disability. They are paying me, but with rights to ask for it back if a determination is made in their favor, which I find frightening.

    2.) I ran out of FMLA coverage last October 2013 and had to resign as I could no longer perform the duties of my job in higher education.

    3.) I am not married (divorced) and do not have enough years work credits for social security disability.

    4.) My doctor is frustrated with the ins. co. staff doctor as he/she believes FM is muscle related. He had to send a long letter with references that it is in fact neurological in nature.

    5.) The insurance company has recently told me that I now have to go to a dr they choose who practices physical medicine and rehabilitation to determine my fitness to work.

    D. BaldridgeMar 4, 2014  #3

  • Erma, we have numerous clients that reside in Texas. In order to specifically answer your questions, we would need to review your disability policy with Standard and the letter that Standard recently sent you. It is unusual for disability benefits to be limited to two years.

    Gregory DellMay 27, 2011  #2

  • Do you represent people in Texas? I fell and had a bad injury, but was also diagnosed with Fybromyalgia. I was told that my Standard LTD would end in two years. My constant pain, fatigue, fibro falre-ups, IBS, UBS and severe migraines leave me incapacitated to work. I get severe attacks that make me stay in bed 2-3 days a week. If not two attacks a week. It is so painful that I cannot sleep. I need help! My benefits end on December 2011. I have already received letters from the Standard reminding me that my benefits are ending soon. I know that I cannot go back to teaching in the classroom. I have had back procedures to help with the back pain and one discectomy. I have to go to physical therapy every week. As Educators, we do not qualify for Social Security disability, the Standard is all I have. Can you help me? Frustrated in Texas!

    Erma MeskerMay 27, 2011  #1