Pension & Benefits News Insurer must rethink denial of disability benefits to nurse with leukemia
Friday, December 6, 2019

Insurer must rethink denial of disability benefits to nurse with leukemia

By Pension and Benefits Editorial Staff

An insurer’s decision to deny short- and long-term disability benefits to a nurse who was diagnosed with chronic lymphocytic leukemia (CLL), a slow-growing blood cancer, was arbitrary and capricious, the U.S. Court of Appeals for the Sixth Circuit ruled in a decision not recommended for full-text publication. The insurer failed to squarely address whether the insured’s persistent symptoms of fatigue and weakness, which are common with CLL, were compatible or incompatible with her ability to perform the essential duties of her job. Thus, the matter was remanded to the insurer for further consideration.

The insured, a registered licensed practical nurse, had been employed at a long-term care and skilled rehabilitation center. She worked the night shift, providing patient care and supervising nursing assistants. She was diagnosed with CLL in February 2013, although she was asymptomatic at that time. Over the next few months, however, she began to experience worsening fatigue. In December 2013, she stopped working due to fatigue and weakness that left her feeling unable to perform her job. Her disability insurer, Principal Life Insurance Co., denied both short- and long-term benefits. After her administrative appeals were denied, she filed suit.

Short-term disability. The insurance plan at issue, which was governed by ERISA, provided short-term disability benefits when, “solely and directly because of sickness, injury, or pregnancy, … [the insured] cannot perform the majority of the Substantial and Material Duties of his or her Own Job.” The term “Own Job” was defined as “[t]he job the [insured] is routinely performing for the Policyholder or a Participating Unit when his or her Disability begins.”

Here, the insured’s job description as a charge nurse required her to stand, walk, push/pull, lift, and bend frequently, i.e., 30-45 minutes per hour. It also involved frequent exposure to infections and blood-borne pathogens. Although Principal Life had repeatedly acknowledged that the insured’s “Own Job” as a charge nurse was classified as “heavy,” its final denial letter failed to mention the level of exertional full-time work the insured could maintain, and there was no discussion of the actual duties of her job as a charge nurse or acknowledgement that Principal Life had previously labeled it as “heavy.”

There also was no discussion as to why the insurer had rejected the specific restrictions the insured’s physician had imposed on her—e.g., standing no more than 15 minutes per hour, lifting no more than five pounds, and avoiding exposure to persons with infection and disease—despite the fact that it had requested them, and no discussion of how a charge nurse with a job classified as “heavy” could follow the listed restrictions as to both the exertional level and the exposure to infected persons. The insurer’s failure to analyze the insured’s claim relative to her specific job as a charge nurse did not present a reasoned explanation for its denial. Therefore, the court ordered the insurer to reevaluate the claim, taking into account the requirements of the insured’s “Own Job” as well as the restrictions imposed by her doctor.

Long-term disability. The plan provided long-term disability benefits when, “because of sickness, injury, or pregnancy,” the insured “cannot perform the majority of the Substantial and Material Duties of [his or her] Own Occupation.” The term “Own Occupation” was defined as “[t]he occupation the [insured] is routinely performing when Disability begins. The occupation of the [insured] as it is performed in the national economy when Disability begins. Own Occupation does not mean the specific tasks or job the [insured] is performing for the Policyholder or a Participating Unit or at a specific location.”

A vocational consultant for Principal Life determined that the insured’s “Own Occupation” was a licensed practical nurse, which was classified as a “medium strength” job. According to the insurer’s own “Occupational Analysis,” medium-strength work required “[e]xerting 20 to 50 pounds of force occasionally, and/or 10 to 25 pounds of force frequently, and/or greater than negligible up to 10 pounds of force constantly to move objects.”

The insurer’s final denial letter merely recited medical terminology and the results of the insured’s bloodwork without any reasoning as to why the diagnosis of CLL with symptoms of fatigue and weakness would permit her to function in a physically demanding workplace. Principal Life failed to properly consider the strength level needed for the insured to fulfill her duties as a charge nurse and as a practical nurse; disregarded the opinions of her treating physicians without explanation; and offered conclusory and unsupported or erroneous statements about her functional capacity based only on file reviewers who either ignored or did not have the necessary information about her “Own Job” or “Own Occupation.” In addition, there was no discussion in the denial letter as to why the physician’s restrictions on the insured’s exposure to persons with infection and disease due to her compromised immune system were ignored when exposure to infections and pathogens occurs in the normal course of the work day for a licensed practical nurse.

In the court’s view, the insurer’s apparent reliance on the file-reviewers to uphold its denial was not reasonable; thus, the denial was arbitrary and capricious. Consequently, the case was remanded to the insurer for further consideration.

SOURCE: Card v. Principal Life Insurance Co., (CA-6), No. 18-6095, October 31, 2019.

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