Can a disability insurance company rely on a Functional Capacity Exam (“FCE”) to deny long-term disability benefits?
Unfortunately a recent Appellate court answered this question yes. Every disability case is distinguishable so for every case that says an FCE is reliable evidence of disability, there is another case that will say it is not reliable. Additionally, it is rare that an FCE on its own is enough to support a disability denial. Functional Capacity Examinations (FCE) requested by disability insurance companies are frequently used by disability insurance companies in an effort to deny disability benefits. There is no consistent law which states that if an FCE determines a person can work, then the claimant must not be disabled. To learn more about FCE exams and what to expect you should watch our video discussing FCE exams.
Lets take a look at a recent disability denial that was reversed by the district court, but then overturned in favor of the insurance company by the Appellate court. This disability insurance case against Union Security Insurance Company (“Union”), also known as ASSURANT, sheds light on how a court can view a Functional Capacity Exams.
Disability Attorney Sues Union Security Insurance Co. (ASSURANT)
When he was thirty-five years old, Charles Green began working as a light industrial warehouse worker for Andersen Distribution, Inc (“Andersen”). As an eligible employee, Green participated in Andersen’s LTD-benefits disability plan insured by Union. In February of 2001, Green stopped working citing physical pain as preventing him from being able to work. Under his policy, during the first 24-months of disability, a claimant must be prevented from performing at least one of the material duties of his “regular occupation” to qualify for benefits. After the 24-month period, a claimant qualifies if his disability prevents him from performing at least one material duties of “any occupation.”
After applying for benefits, Green was awarded LTD benefits under the “regular occupation” of the policy for 24-months. However, after 24 months, Green was denied LTD benefits after Union determined Green did not meet the Policy’s “any occupation” definition of disability.
Green subsequently brought an action against Union in the United States District Court for the Western District of Missouri challenging Union’s decision. The District Court issued judgment in favor of Green and Union Security appealed the decision.
District Court improperly concluded FCE was of “limited value”
When reviewing Union’s decision, the District Court reviewed the record containing records of an FCE and video surveillance conducted by Union of Green’s activities. The district court had discounted the FCE which was conducted over a period of two days and which concluded that Green was capable of working in a full-time sedentary job, contrary to Green’s assertions.
The Court of Appeals disagreed with the lower court and concluded that the district court improperly discounted the FCE explaining that “it is true an FCE can only provide a ‘snapshot’ of a claimant’s functional capacities, but this does not render the FCE of ‘limited value.'” Rather, the court concluded that an FCE provides objective clinical evidence regarding how a claimant’s condition affects his ability to work.
Assurant Relies on FCE exam and Video Surveillance to Deny Disability Benefits
This case is unusual as it is not often that an Appellate court will reverse a lower court finding in favor of a disability claimant. Additionally, this case is not great for disability claimants as it can allow insurance companies to try to rely on unreliable FCE exams. If a claimant has an FCE set by an insurance company, then must be aware of the type of testing that will be administered and they must be prepared. The case against Assurant is distinguishable as the Assurant also conducted video surveillance of the claimant for two days. The combination of the video surveillance and the FCE was something that made the Appellate court overrule the decision of the lower court. Due to the unfavorable arbitrary and capricious standard of review in ERISA governed cases, the appellate court found that ASSURANT did not act unreasonably.