Can Your Insurance Company Terminate Ongoing Long-Term Disability Benefits if You Start Working?

When a long-term disability takes you away from your career, it doesn’t automatically mean you will have to stay home watching TV forever. Many disabled employees find meaning and money from part-time or full-time employment that suits their disability. But could that put their income in jeopardy? Can your insurance company terminate ongoing long-term disability benefits if you start working again?

In this blog I will review a recent 3rd Circuit Court decision, Baker v Sun Life. I will explain how courts review the termination of ongoing long-term disability benefits when a person is able to do some work, but not her own prior occupation. I will also discuss how having a long-term disability attorney involved in these reviews can help protect your right to ongoing benefits.

Disability Insurance Coverage: Your Occupation vs Any Occupation

If you look carefully at your employer-provided ERISA long-term disability insurance policy, you will probably see that the policy is broken down into two time periods. Most ERISA policies have a cut-off around the 2-year mark where it becomes harder to qualify for ongoing long-term disability benefits.

The difference comes down to two words: “your” and “any.” Most policies say that in the first several months (usually 24), you are eligible for benefits if your disability prevents you from doing “your occupation.” This could mean anything from lifting restrictions on a construction worker to cognitive impairment of an accountant. Something about your diagnosis prevents you from doing the core parts of the job you had at the time you became disabled.

But then, somewhere around the two-year mark, that standard changes. Now, in order to receive ongoing long-term disability benefits, it isn’t enough that you can’t do your old job. Now, your disability needs to stand between you and any employment you qualify for with your education, training, or experience. That construction worker? She may be able to find a desk job as a receptionist. The accountant? Now he is qualified to stock shelves at a grocery store. If you are able to take on any occupation, you may no longer be eligible for ongoing long-term disability benefits (sometimes these clauses require that the “new” occupation be capable of generating a reasonable portion of your pre-disability income, and so it may not be that a high wage-earner must prove an inability to perform minimum-wage work, but the standard is still much harder to prove).

Court Says Self-Employment Counts to Cancel Ongoing Long-Term Disability Benefits

Kenneth Baker had suffered a cognitive impairment that prevented him from doing his job. He had been treated by several treating physicians for the condition for years. He received ongoing long-term disability benefits until a private investigator found out that Baker had started working from home and at a local Dunkin’ Donuts. The investigator’s report said Baker was seen standing behind the counter and meeting with employees there. The insurance company asked Baker to submit to “independent medical examinations” by two of their neurosurgeons, each of whom wrote reports claiming Baker wasn’t disabled.  The insurance company took their conclusions and determined that Baker could work as a business owner, an operations manager, and a retail store manager. Based on these findings, the insurance company canceled Baker’s ongoing long-term disability benefits.

Baker sued, saying that the decision completely dismissed his own doctors’ opinions, who were in the best position to know his condition. However, in a recently published decision, the Third Circuit Court of Appeals applied the “any occupation” standard and found that the insurance company had a rational basis to terminate the benefits.

Protecting Your Ongoing Long-Term Disability Benefits

Mr. Baker’s case fell apart, at least in part, because he relied on the opinions of the wrong types of doctors. The insurance company was able to value its own doctors’ opinions who performed cognitive testing, over Mr. Baker’s treating physicians because none of them specialized in cognitive care. Since the basis of Mr. Baker’s disability was cognitive, he needed someone with that expertise to support his insurance claim of cognitive decline.  His case could have been helped at the administrative level before ever getting to court, by having his own testing done to rebut Sun Life’s doctor’s opinions.

Secret investigations, insurance-paid evaluators, and legal technicalities can all come between you and your much-needed insurance benefits. By hiring an experienced long-term disability insurance attorney at the first sign of an investigation, you can help protect your benefits and provide for yourself and your family. In Mr. Baker’s case, that might have included a referral to a cognitive care expert who could testify on his behalf. It may include raising defenses about what Mr. Baker was doing at the Dunkin’ Donuts. Or it may have included negotiating for some ongoing partial disability benefits if his disability still prevented him from full-time work in “any occupation.” Just because your disability claim has tipped over the time limit between “your occupation” and “any occupation” doesn’t mean you aren’t entitled to ongoing long-term disability benefits. However, if you do decide to start working, you will need to be careful, and get the help of an attorney used to working with and against the insurance companies. If you need help protecting your claim for long-term disability benefits, the attorneys at Bross & Frankel are here to help. We will review your claim, work history, condition, and any denial or request for information, helping you protect your rights and your claim. Contact us or call us today at 856-795-8880 for a complimentary consultation.