Pension & Benefits News Insured with bipolar disorder limited to 24 months of benefits
Friday, September 28, 2018

Insured with bipolar disorder limited to 24 months of benefits

By Pension and Benefits Editorial Staff

A disability insurer did not abuse its discretion in terminating an insured’s benefits after 24 months in accordance with the policy’s limitation of coverage for disabilities due to mental illness, the U.S. Court of Appeals for the Second Circuit ruled in a summary order. The insured’s disabling condition—bipolar disorder—was listed as a mental disorder in the applicable version of the Diagnostic and Statistical Manual of Mental Disorders (DSM) and, thus, qualified as a mental illness within the meaning of the policy.

The insured was covered under an employer-sponsored long-term welfare and disability plan through a group insurance policy issued by The Hartford Life Insurance Company. The policy defined “mental illness” as “a mental disorder as listed in the current version of the Diagnostic and Statistical Manual of Mental Disorders, published by the American Psychiatric Association.” The policy noted that a mental illness “may be caused by biological factors or result in physical symptoms or manifestations.” Claimants disabled due to “mental illness” were entitled to benefits for up to 24 months.

The insured in this case was diagnosed with bipolar disorder in May 2010 and began receiving disability benefits at that time. Bipolar disorder is listed as a mental disorder in the DSM-IV, the version applicable to the insured’s claim. The insurer terminated her benefits in May 2012 in accordance with the policy’s 24-month limit for disability due to mental illness.

The insured argued that the insurer’s decision was arbitrary and capricious because the DSM was scientifically invalid and out-of-date based on current medical research. In support of her position, she cited criticism of the DSM by medical professionals, as well as recent scientific research indicating that bipolar disorder is a physical illness rooted in biological causes. In the court’s view, however, the insurer acted well within its full discretion and authority to construe the policy’s terms, which defined “mental illness” by explicit reference to the current version of the DSM. Here, the applicable version of the DSM classified bipolar disorder—the insured’s sole diagnosis—as a mental disorder. The insurer lacked authority to modify the terms of the plan and was obligated to process claims in accordance with the plan’s written terms.

Moreover, even assuming that the insured raised a valid criticism of the DSM, the manual remains broadly accepted. In a previous decision, the court ruled that the DSM is “an objective authority on the subject of mental disorders.” Although the court also held that it “may well be that bipolarity is a manifestation of a chemical or electrical reaction in the brain and that it may be said to arise ultimately from a physical cause,” the insured’s argument in this case conflated her disability with its underlying cause. Indeed, both the DSM and the policy recognized that mental illnesses may have underlying physical causes. Thus, regardless of whether bipolar disorder has a physical cause, the insurer’s classification of the insured’s disability as a “mental illness” subject to the 24-month limitation on benefits was reasonable.

SOURCE: Kim v. The Hartford Life Insurance Co., (CA-2), No. 17-2122-cv, September 7, 2018.

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