Does Policy Language of Actively at Work Include Saturday, Sunday and Holidays?

In Harlan Ten Pas v. The Lincoln National Life Insurance Company, (Lincoln) Plaintiff, a tax attorney with the firm of McGladrey LLP (McGladrey), suffered a heart attack on Sunday, August 31, 2014. He had worked a full day at the office on Friday, August 29, 2014.

Plaintiff worked at home part of each day, Sunday August 30 and Saturday August 31, before going to his summer camp in Wisconsin for the Labor Day weekend. While at his cabin, he had chest pains and went to the hospital. On September 1, Labor Day, he underwent cardiac angioplasty and the placement of a stent to keep an artery open.

On Wednesday, September 3, 2014, Plaintiff went into the office to work, but went home in the afternoon. He had several medical problems over the next few days including a stroke and intracranial hemorrhage. On September 12, he was transferred the Rehabilitation Institute of Chicago and discharged from there on October 20.

Plaintiff participated in McGladney’s group Long Term Disability (LTD) Insurance Policy (Policy) plan administered by Lincoln and applied for LTD benefits. According to the terms of the policy, the Total Disability Monthly Benefit is equal to 60 percent of the covered employee’s monthly earnings. The benefits are calculated according to a Determination Date which is defined as “the last day worked just prior to the date the Disability Begins.”

On March 4, 2015, Lincoln approved Plaintiff’s LTD benefit claim, but based the payment of benefits on the salary he was earning on August 31, 2014, the last day Lincoln found that Plaintiff Actively Worked. On August 31, Plaintiff was earning $12,500 bi-weekly ($25,000 a month).

Plaintiff argued that according to the policy provisions, his last day Actively Worked could not be earlier than September 2, 2014, and his disability payment should be based on his salary of that date, which had increased effective September 1, 2014, to $15,000 bi-weekly ($30,000 a month). On February 19, 2016, Lincoln informed Plaintiff it was sticking to its original decision and considering August 31, 2014, his last day of work. Plaintiff appealed.

On July 8, 2016, Lincoln denied Plaintiff’s appeal and informed Plaintiff it would continue to pay benefits using August 31, 2014, as his Disability Date. His administrative remedies were now exhausted, so Plaintiff filed this ERISA lawsuit in the U.S. District Court for the Northern District of Illinois.

The District Court held in favor of Plaintiff and found his last day Actively at Work was September 2, 2014. The Court ordered Lincoln to pay benefits based on his increased salary that went into effect on September 1, 2014.

Long Term Disability Insurance Policy: Active at Work Provision

There was confusion in Plaintiff’s medical records about when Plaintiff was unable to work, but the Court found the case turned on the policy language of the Active at Work provision. The Court concluded that, “he was not capable of becoming disabled until September 2 when he was no longer Actively at Work.” He based this on a provision in the policy that said an employee was considered “Actively at Work on… a Saturday, Sunday or holiday that is not a scheduled workday.” Since Plaintiff was Actively at Work on Sunday, August 31 and Monday, September 1, Labor Day, a holiday, the earliest his last day worked could be was September 2, the day after his salary increase.

The Court carefully analyzed the various provisions of the Plan and its terminology in order to determine Plaintiff’s last day of work and agreed with Plaintiff’s interpretation holding “because Sunday and Monday are not ‘days of absence’ on which he could become Disabled under the Active Work provision, he must have remained Actively at Work through the holiday weekend and [Plaintiff] could not have become Disabled until the following Tuesday. This accords with the definition of Disability because it was the first regularly scheduled workday that he could not perform the regular duties of his occupation.”

This case was not handled by our office, but if you have any questions about this case, or have any concerns about your claim for either short term disability or long term disability benefits, contact one of our disability attorneys at Dell & Schaefer for a free case evaluation.

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