Disability Insurance companies do not have a reputation for being sympathetic towards their clients. They will usually put themselves in the most favorable position that they can be at in order to minimize paying out to disability claims. The Employee Retirement Income Act of 1074 (ERISA) was enacted in an effort to limit the abuses and discrimination that insurance companies will impose on claimants for disability benefits. While ERISA has essentially become a pro-insurance company law, there are some protections in the law for disability claimants. In order to reduce the anxieties that claimants might have, one of the provision of ERISA required that a decision must be made by the insurance company within 45 days upon receipt of an appeal. An extension of an additional 45 days is possible if it was timely requested by the disability insurance company.
Nevertheless, we still find insurance companies blatantly ignoring this provision of ERISA prolonging the agonies that claimants have to go through waiting for these disability insurance companies to make a claim decision. The case of Laura Bumgarner v CIGNA Group Insurance, Life Insurance of North America, Fluor Hanford Inc and Hanford Employee Welfare Trust is one such case where the disability insurance companies did such a thing. In this case, the plaintiff Laura Bumgarner filed a lawsuit through her disability attorney to compel the insurance companies involved to pay her the disability benefits that she was entitled to.
The Facts of Laura Bumgarner’s Case
The Plaintiff Laura Bumgarner was an employee at Fluor Hanford Inc as a Radiation Control Technician since 1992. Her post was designated as a Senior Health Physics Technician. At the Hanford worksite, Laura Bumgarner’s main duties required her to visit the Hanford’s 222s Laboratory, the Environmental Restoration Disposal Facility (ERDF), the Plutonium Uranium Extraction Plant (PUREX), the Plutonium Finishing Project (PFP), the Uranium Oxide Extraction Plant (UO3) and the T-Plant. Laura Bumgarner’s task would be to monitor the plant itself, the plant’s environment, the plant’s equipment and the personnel working in the plant for radiological contamination. This job also required the plaintiff to handle various types of radiation detection equipment like “SNOOPY” which weigh 25 pounds and the cumbersome “Cutie Pie”, a ray like gun used for detecting gamma and beta rays.
During this time through Fluor Hanford Inc, Laura became eligible for short term and long term disability insurance known as the “Hanford Employee Welfare Trust” (HEWT) which was issued by the Life Insurance of North America (LINA / CIGNA). The Plan was said to be jointly administered by a board of trustees together with LINA and the CIGNA Group Insurance (CIGNA).
Under the HEWT plan, “Total Disability or Totally Disabled” was defined as follows:
An individual will be considered totally disabled if, because of injury and sickness, he is unable to perform all essential duties of his job. After monthly benefits have been payable for 24 months, the individual will be considered totally disabled only if, because of injury and sickness, he is unable to perform all the essential duties of any occupation for which he is or may reasonably become qualified based on his education, training or experience.
Based on the plaintiff’s medical records from 2005 to 2007, she was suffering from Cervicalgia, Chronic sinusitis, Depression, Fatigue, Fibromyalgia, Hepatitis C, Migraine Headaches, Neck Strain and Tarsal Tunnel Syndrome.
By June 12th 2006, the plaintiff’s medical condition had worsened to include suffering from an acute lower back injury which restricted her from lifting heavy objects. Based on the recommendation of her primary care physician, the plaintiff had to be off work. Previous medical ailments continued to plague the plaintiff and by October 2006, an MRI had shown the plaintiff to be suffering from degenerative disk disease and a minimal compression fracture of C5-C6. By January 2007, the plaintiff was diagnosed as suffering from likely inflammatory arthritis complicated by fibromyalgia.
Short Term Disability Claim
As a result of her worsening medical condition, the plaintiff went on short term disability (STD) from August 22nd 2007 through February 24th 2008. In between this time, the plaintiff was also treated for her pain, fatigue and fibromyalgia by a physical and rehabilitation physician who stated in a CIGNA Medical Request Form dated October 25th 2007 that the plaintiff was “disabled” as a result of her symptoms. The plaintiff was also incapacitated from working since December 28th 2007 due to her sinus surgery.
Although the plaintiff tried to return to work with the permanent restriction imposed by her physical and rehabilitation physician, her manager was unable to accommodate the plaintiff’s restrictions which prevented her from permanent lifting, pushing and pulling. As such, the plaintiff was recommended by her manager to seek total disability and told the plaintiff to contact her STD and long term disability (LTD) case managers.
The plaintiff was initially granted LTD benefits by CIGNA with a letter dated February 15th 2008 for a 24 months period commencing from February 18th 2008 until February 18th 2010 as a result of the plaintiff being disabled to work in “her occupation”. However, the plaintiff was informed by CIGNA’s Disability Claim Manager in a letter dated September 1st 2009 that she would be subjected to a Disability Definition Change February 18th 2010 and requested confirmation of her inability to work in “any occupation”.
Disability Definition Change After 24 Months of Disability Payments
Despite having provided supporting medical documentation as to the plaintiff’s disability to work in “any occupation” for CIGNA to review, the plaintiff was sent a letter of denial of LTD benefits by CIGNA’s Disability Claim Manager on October 12th 2009. The plaintiff was informed that the “restrictions and limitations do not demonstrate severity that would precluded you from performing any occupation” and that she no longer met the definition of being “disabled”. As such, her LTD benefits will cease after February 18th 2010. The plaintiff was also informed in the letter that she was entitled to appeal to CIGNA for this decision and a determination would be made within 45 days from the date of the appeal.
The ERISA Disability Appeal
The plaintiff on October 25th 2010 submitted an appeal for review of CIGNA’s decision to terminate her LTD benefits. To support her appeal, extensive medical documentation from numerous treating medical doctors was again provided to CIGNA for its review process. In addition, the plaintiff also informed CIGNA of her Social Security Disability award and documents that the Social Security Administration (SSA) had established the plaintiff as being disabled from any occupation in the national economy since February 1st 2008. The SSA informed the plaintiff on July 22nd 2009 that she was entitled to benefits from February 2008 onwards.
Even though the plaintiff’s appeal letter and medical documentation contained more than sufficient evidences to rebut CIGNA’s grounds for terminating the plaintiff’s LTD benefits, a decision was not made by CIGNA within 45 days of CIGNA receiving the plaintiff’s appeal. Instead, CIGNA sent three letters to the plaintiff delaying the determination of her appeal. The first one was dated January 20th 2011 from CIGNA’s Disability Claim Manager informing the plaintiff that her appeal was “being referred to our Disability Appeals Team”. Two more letters were sent by CIGNA’s Disability Appeals Team dated February 21st 2011 and March 21st 2011 repeating similar notices of delay in determination.
The Claim for Overpayment of Benefits
Concurrently, while the plaintiff’s appeal was being “processed”, CIGNA’s Disability Claim Manager informed the plaintiff in a “Recovery of Overpayment” letter dated August 26th 2009, that due to the plaintiff’s receipt of social security benefits, her LTD benefits will be reduced and offset from the amount of LTD benefits that she received from February 18th 2008 through July 31st 2009. The total amount of overpayment determined and due to CIGNA/LINA was $15,105.28 which the plaintiff paid promptly and in one lump sum with a check to CIGNA. It always amazes our disability attorneys how a disability company can claim a person is not disabled, yet at the same time seek an overpayment due to approval of benefits from Social Security.
Bid to offset LTD benefit with Social Security Child Benefit
In a bid to further reduce the LTD benefits paid out, the Recovery Specialist from CIGNA/LINA sought to further offset the plaintiff’s LTD benefit by basing the reduction on the “Social Security Dependent Benefits” awarded to the plaintiff Ã¢â‚¬Ëœs two minor children on October 17th 2009. Under the Social Security Administration’s Supplemental Security Income (SSI) program, a child of a disabled adult is qualified to receive child’s benefit until the child is 18 years of age.
Claim for Relief in the Lawsuit
As a result of CIGNA/LINA’s actions, the plaintiff is now seeking judgment against CIGNA/LINA from the Court as listed below:
- An order that the plaintiff is entitled to LTD benefits under the group disability plan;
- Payment of LTD benefits including interest equal to the amount that she would have received had CIGNA/LINA not terminated her LTD benefits;
- A declaration that the “Social Security Dependent Benefits” awarded to the plaintiff’s children is:
- Not received by the plaintiff or the children is not directly able to “receive” those benefits awarded to them;
- CIGNA/LINA as a matter of public policy or equity cannot offset children’s benefit from the plaintiff’s LTD benefits in a bid to recover overpayment of LTD benefits.
- The award of reasonable attorney fees and costs;
- Any other relief which the Court deem just, equitable and proper.