First Unum terminates long-term disability benefits after 4 years of paying and SSDI approval

In a recent Federal Court decision in favor of First Unum, the Court validated the right of a long-term disability insurance plans to rely upon functional capacity evaluations (FCE) as a basis for determining whether or not the claimant has the right to continue receiving disability insurance benefits. In VanWright v. First Unum, VanWright’s long-term disability attorney pointed to another case, Alfano v. Unum, as a reason that the Court should not find First Unum Insurance Company’s decision to terminate his client’s disability benefits reasonable. It appears that disability benefits were appropriately terminated in this case as the disability claimant was performing activities that far exceeded the restrictions and limitations indentified by his treating physician. A look into the background of this case will show why the Court took Unum’s side in its decision.

In May of 2002, Kelvin VanWright was injured severely in an automobile accident. He sustained severe injuries to his neck and back and required multilevel back surgery. The surgery was unable to restore his ability to work as a diesel technician at Cummins Metropower Inc., his employer at the time of the accident.

He had participated in his employer’s group disability insurance policy issued by First Unum, so when it became apparent that he would be unable to work he applied for long-term disability benefits. Under this disability policy, he would be considered disabled during the first 36 months as long as he was unable to perform the material duties of his regular occupation as a diesel technician. After 36 months, the definition of disability would change to unable to perform the duties of any gainful occupation for which he was “reasonably fitted by his education, training, or experience.”

The disability plan stipulated that Unum would reduce the amount of benefits paid by any settlement received from another party such as Social Security Disability Insurance benefits. The plan stated that a gainful occupation would be any occupation which provided Van Wright with “at least 60% of his indexed monthly earnings within 12 months of returning to work.” The plan also gave Unum discretionary authority to determine whether he was eligible for benefits and to interpret how the terms of the policy would be applied to his claim.

VanWright was notified by UNUM on July 30, 2002 that he had been approved for long-term disability benefits, retroactively as of July 10 of that same year. He was also notified that in order to continue qualifying for benefits, he would have to demonstrate that he was still disabled according to the policies definition. Proof of disability could be proven by additional medical or vocational information.

Between July 2002 and the end of 2006, Unum paid disability benefits, while conducting inquiries and tests to the status of VanWright’s condition. During this time, VanWright attended college and earned a bachelor’s degree. This led Unum to determine on November 27, 2006 that VanWright was no longer disabled under the stricter definition of the plan that began in July 2005. His benefits were terminated because Unum found that VanWright was capable of a “medium level of work capacity.”

This decision was based upon the assessment of two physicians and two nurses hired by Unum. Unum also identified at least three gainful occupations that the long-term disability insurance company believed VanWright was capable of performing.

VanWright appealed the disability denial decision on January 8, 2007, but the appeal was rejected with the final denial of benefits occurring on May 16, 2007.

Meanwhile, Social Security disability insurance had awarded VanWright a settlement of $40,430.20 in May of 2006. In June 2006, Unum requested reimbursement for this amount. VanWright agreed to repay Unum, but did not repay the full amount before his benefits were denied.

ERISA Disability Insurance Lawsuit Is Filed.

When VanWright hired a long-term disability attorney and took his claim to court, as permitted by the Employee Retirement Insurance Security Act (ERISA), Unum countersued for the remaining balance from the Social Security disbursement.

Disability Attorney Agrees that Policy Gives Unum Discretion.

Because the long-term disability plan granted Unum the authority to determine whether VanWright qualified for benefits, the Court would have to apply a deferential standard, that favored Unum unless a conflict of interest could be demonstrated. The court could not overturn Unum’s denial of benefits unless they could find that the denial was arbitrary and capricious – without reason and unsupported by substantial evidence. Or the decision would have to be erroneous as a matter of law.

The Court could consider several factors in determining whether Unum’s disability denial decision was reasonable. First it would consider the conflict of interest factor to see if it might have colored the decision. The court could also consider the Social Security administration’s findings that VanWright was disabled. The court would limit itself to just reviewing the administrative record, unless evidence of the conflict of interest could be demonstrated.

Unum Argues that the Record Proves the Disability Plan Did Not Act Arbitrarily or Capriciously.

VanWright’s long-term disability attorney argued that the record proves that Unum acted unreasonable and his client is disabled. He pointed to the facts that Unum refused to credit reports from his client’s treating physicians, misinterpreted the results of a functional capacity examination (FCE) which did not support VanWright’s ability to return to work, and failed to agree the with Social Security administration’s findings that VanWright was disabled.

Unfortunately, the January 2006 findings of VanWright’s physician were inconsistent with behavior that Unum had observed, and the opinion that had been expressed earlier by the same physician. For example in January 2006, the same doctor had reported that VanWright could “sit for two hours, stand for one hour, walk for one hour, and occasionally lift up to seven pounds.” Yet, the December 2006 report was more restrictive. Meanwhile, between these two dates VanWright had been attending classes four days a week, and two of those days his classes lasted for more than four hours. For his physician to then report that VanWright could not sit or stand for more than 10 minutes in an eight hour day was clearly inconsistent with VanWright’s observed behaviors.

VanWright’s disability insurance attorney had also challenged Unum’s dependence on an FCE, because he claimed it was not valid under the terms of the policy. It had been conducted by a physical therapist and the policy said that Unum could require VanWright “to be examined by a physician, other medical practitioner or vocational expert” chosen by Unum. Unum interpreted other medical practitioners to include physical therapists. The court found this a rational interpretation. On this basis, the court would not find it arbitrary and capricious to rely upon the FCE.

The long-term disability attorney then sought to invoke rule 702 of the Federal Rules of Evidence. The Court found that under ERISA, “an ERISA plan administrator is not a court and is not bound by the rules of evidence.”

VanWright disability attorney then argued that the Alfano case shows that it was wrong for Unum to rely upon the results of an FCE. The Court was not persuaded by this argument either. Despite the fact that a different standard of review was used in Alfano, the issue was a misinterpretation of the FCE, which ran counter to the evidence of seven physicians who would found that Alfano was disabled.

The final argument that VanWright’s disability attorney could bring before the court was the issue of conflict of interest. The court agreed that Unum had a conflict of interest; however, the court found evidence within the record to demonstrate that Unum had taken active steps “to remove the potential of bias and to promote the accuracy of its review.”

The Court Addresses Unum’s Counterclaim for SSDI Benefit.

The Court reviewed the record, and found that there was no question of material fact as to whether VanWright owed Unum the money for the SSDI overpayment. And because VanWright did not challenge Unum’s legal right to demand relief, the court found that VanWright owed Unum $5,003.20. The Court issued summary judgment in Unum’s favor, and further ordered the clerk of the court to enter judgment for Unum against VanWright in the amount of $5003.20. The clerk of the court was ordered to terminate any pending motions and close the case.

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There are 4 comments

  • Bob,

    I have recently encountered a somewhat similar situation for a client that has been on claim- administered by Unum- for some 10+ years, was offered a buyout that was declined and then experienced recently an increase in review. So what you are going through is not unheard of, but certainly warrants some concern. Please contact our office to discuss your case in detail.

    Stephen JessupNov 29, 2015  #4

  • I have been disabled for 13 yrs under a private policy with Provident that transferred to Unum. I have top specialist who believe that the myriad of health issues is likely MS, and agree that my vestibular system is abnormal and have diagnosis Meniers. In 2009 I declined a settlement offer and in writing their offer they stated it was doubtful I would be able to return to my specialized occupation. Now they are calling my GP multiple times and have obtained his records which contain only sick visits and physicals, telling me they are reviewing my claim when they obtained the kitchen sink last year from my attending physician, a nationally recognized expert and world lecturer, and other specialists. Can they really just send me to a bogus IME that is likely coming, and now say that even though they said I couldn’t do my own occupation, now I can? It’s 100% impossible. Thank you for any comments you might be able to share.

    Bob ANov 28, 2015  #3

  • DeeAnn,

    If you have been on claim for years, then your disability insurance should continue without a problem. I am not sure about your life insurance, but it should be the same.

    Gregory DellApr 16, 2012  #2

  • What happens to my long term disability insurance if I signed up through my work for long term 2008 and they just sent me a letter of termination of employment March 28, 2012 but yet I am still disable and receive SSDI?

    My life insurance policy and long term disability are both through them. I have had to back pay back the SSDI last couple of years. First year they gave me nothing and for the last year and next eight months I have had to make a little over $1400 a month back pay for overpayment, but I’m scared they are going to try to pull something now that my work terminated employment after being employed since 2007.

    Do I lose my long term disability even though it stated I could get it up until I was age 65? Do I lose my life insurance to which Unum, too, is the holder of?

    DeeAnn ThomasApr 16, 2012  #1

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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.

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Bruce R. (Arizona)

Steve Dell has done an exceptional job with my disability application process. The firm is extremely well managed. They have acquired an incredible amount of experience over many years. I recommend them for disability insurance claims without reservation. 

Don (Florida)

I called this firm a few months ago completely disparaged due to a company cutting off disability benefits at a time that nearly caused me to lose everything.

Attorney Alex Palmera and Danielle worked hard to reach an amicable settlement and my case was settled a few months later. This is a good firm and the specific expertise in disability claims saved me countless hours of hassle at a time when an already fragile state existed.

Thank you Mr. Palamara and Danielle.

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I have nothing but good things to say about how my buyout was handled with my disability claim. The level of professionalism was amazing. All of my questions and concerns were answered either by Danielle L. or Alex P. in such a timely manner and with such care I would recommend them in a heartbeat to anyone needing to approach their provider with buyout options.

They did a fantastic job communicating between the provider and me, always keeping my best interest at heart and always answering my many many questions. They really did take most of the stress out of this whole situation. I would give them a 10 out of 10 for every step of this crazy journey. Thank you so much for helping me through this.

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Greg Dell and his assistant Anneli have been extremely responsive and helpful, not only our initial consultations, but in follow-ups 1 and 2 years later with the insurance company to ensure that they comply with their agreements (which they did), as well as a separate and only slightly-related inquiry about our health insurance. I always hear back from them very quickly, which is rare and greatly appreciated.

Jeff P. (Oklahoma)

After a very long and frustrating ordeal to keep my LTD payments coming I decided to seek assistance from and attorney. After much research and asking those in the legal profession Dell & Schaefer seemed to be the top choice. I reached out and Alex Palamara was the attorney assigned to my case. All I can say is the experience was outstanding. Both Alex and his Paralegal, Danielle Lauria were excellent to work with. They were very kind, concerned, understanding of my frustrations and treated me with the utmost respect. Communication was excellent with regular updates and telling me what I could expect in each stage of the process.

Alex was also very straight forward with what to expect and no pie in the sky promises or expectations were made. In the end we won our case and I believe it was solely due to their experience and knowledge of not only the laws but the insurance companies as a whole. I would highly recommend them and am very grateful for the help they afforded to me.

Chad B. (Illinois)

I originally spoke with 3 other long term disability lawyers about my case before contacting Dell and Schaefer. None of those law firms would take it. They said the chances of me winning was not good. After finding Dell and Schaefer online I spoke with one of the attorneys that has since left. He did take my case but later it was picked up by Rachel Alters. Rachel is amazing and a very intelligent attorney. She not only won my case but also was able to get my back pay for 6 months.

I also cannot say enough about Sonia Nogueira. Sonia was always quick to answer any of my questions. I would usually hear back from her within hours of sending her a email. I do not know where I would be if I hadn’t contacted them. My family and I cannot thank them enough. Don’t let an insurance company tell you they are not responsible for paying you. I paid them for 20 years monthly and they looked for any reason they could not to have to pay me when I needed my benefit. Thank you Rachel and Sonia for all you guys do.

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Words can only scratch the surface regarding my experience working with Attorneys Dell & Schaefer. It’s a very emotional experience making the decision to utilize disability insurance. The unknowns were/are scary. From the very first phone call, the support staff was/are very professional and reassuring. I have been working with Attorney Steven Dell for approximately 10 years. He is confident, reassuring, listens to and addresses all my concern, and is extremely dilligent in understanding my specific policies for how they impact me. It is very reassuring that Steven handles and deals with the insurance company on my behalf. Attorney Dell’s team, and specifically Merlin, Attorney Dell’s assistant, is simply fantastic. Her professionalism and attention to detail have made all my communications with the office seamless.

Simply put, my experience with Dell & Schaefer made the emotional rollercoaster experience of my neck surgery seem like a walk in the park.

Thank You, Thank You, Thank You, to both Attorney Steven Dell and to Merlin for how you have helped me over these past 10 years.

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