In the recent case of Ferrin v. Aetna Life Ins. Co. a federal judge from the Northern District of Illinois determined that Aetna improperly terminated Ferrin’s claim for long term disability benefits and ordered Aetna to reinstate Ferrin’s claim and pay all past due benefits with interest. Prior to filing for long term disability Ferrin was an employee of Southwest Airlines. In 2008, while at work, she suffered a back injury, but was able to continue to work in her capacity with Southwest Airlines until July of 2011 when she underwent back surgery. As a result of her back condition/injury she also developed issues with her hips that necessitated undergoing surgery for a total left hip replacement. Given the nature of her occupation and her medical conditions, Aetna quickly approved her claim for long term disability benefits finding that she would be unable to perform the material duties of her occupation.
While on claim, Aetna contracted Allsup to assist Ferrin in securing Social Security disability benefits. The SSDI benefits were awarded quickly and Aetna began offsetting her monthly benefits by the amount she received from Social Security. Aetna continued to issue monthly benefits to Ferrin throughout the 24 month own occupation period and approved her claim into the “any occupation” definition of disability standard. However, approximately one year after approving her claim under the any occupation standard, Aetna notified Ferrin it was terminating her disability benefits following a medical review conducted by an in-house nurse, which indicated Ferrin had sedentary work capability, as well a vocational review that identified several alternate occupations Aetna believed Ferrin could perform. Ferrin properly appealed Aetna’s denial of benefits, but Aetna ultimately upheld the denial of her claim. Ferrin in turn filed a federal civil lawsuit under ERISA to secure her benefits.
A key factor in Ferrin’s lawsuit that certainly increased her chances of success in court was the fact that the Court applied the de novo standard of review, which tasked the judge with only having to determine if Ferrin was disabled under the policy. As such, the Court did not have to give deference to Aetna’s review of the claim. As the title of the article indicates, the Court determined that Aetna erroneously terminated benefits and that Ferrin was entitled to continued disability benefits. In reaching this decision the Court rendered several noteworthy opinions and comments to support its conclusion, which included:
- Ferrin had undergone a Functional Capacity Examination that ultimately concluded she had “light” duty physical demand ability. However, the Court examined the FCE findings and noted that Ferrin was actually precluded from Sedentary work as the FCE indicated that Ferrin was only able to sit “frequently” (2.5-5.5 hours per day), and that by the definition of Sedentary work she would have to be able to sit for up to 6 hours to be deemed able to work at a Sedentary demand level. As such, the Court found the FCE was supportive evidence of Ferrin’s claim for benefits.
- Aetna argued to the Court that regardless of her physical ability to work Ferrin would still meet the earnings requirement (be able to earn 50% of her pre-disability earnings) under the policy and therefore not be deemed disabled. The Court rejected this argument and noted it would not be likely that Ferrin could earn 50% of her pre-disability earnings if she could not perform Sedentary work.
- The Court discounted the opinions of the doctors hired by Aetna as they had never physically examined Ferrin. The Court’s opinion here was very much akin to the “treating physician” rule in which the opinions of a person’s doctors are given more weight than those of a doctor who has never examined the insured.
- The Court also found that the award of Social Security benefits was strong evidence of disability that Aetna did not properly consider same. The role that SSDI plays in a review for benefits under an employer provided policy has been a point of discussion in recent years that the Court did not shy away from.
- The Court expressed skepticism regarding Aetna’s initial termination of benefits as there was nothing in Ferrin’s medical records to suggest that her condition had improved to a level that would allow her to work.
The ruling in Ferrin is unfortunately an exception to the norm. Unlike the vast majority of ERISA disability actions, Ferrin’s case was decided under a de novo standard of review that allowed the Court to render a decision as to disability based on the facts before it (allowing a Judge to actually judge) as opposed to having to determine whether a denial of benefits was reasonable. Ferrin does, however, serve as an example of what an outcome in court could look like for insureds if more states began to ban discretionary authority/clauses in ERISA disability policies. Until such time, disability insurance carriers will continue to act in the manner that Aetna displayed here.
Our office did not have any involvement in the Ferrin case but believes it is important to highlight cases in which an insurance company is told by a federal court that they are wrong. If you have a disability insurance claim that has been denied by Aetna or any other insurance carrier please feel free to contact our office to discuss how we may be able to assist you.