By Pension and Benefits Editorial Staff
Metropolitan Life Insurance Company (MetLife) unlawfully denied long-term disability benefits to an insured who had injured his back at work, a federal court in Louisiana held, finding that the injury did not result from the insured’s preexisting degenerative disc disease. The evidence showed that the workplace injury affected a different part of the insured’s back and caused different symptoms, such as severe pain in the injured area, which he had not experienced before. Thus, MetLife was ordered to pay the insured past and future LTD benefits.
Under the terms of the policy, which was governed by the Employee Retirement Income Security Act, if an employee received medical treatment or prescriptions for a sickness or injury in the year prior to coverage, he would have a preexisting condition. If a disability resulted from that preexisting condition, the employee would still be entitled to LTD benefits as long as he: (1) did not receive treatment for the preexisting condition for three months after coverage began; or (2) worked for a year after the beginning of coverage.
In this case, the insured suffered a back injury at work on July 20, 2016 and took disability leave the following day, which was less than a year after his policy became effective. Although he had a history of low back pain and previously had undergone surgery at the L4-5 level of his spine, he indicated that the workplace injury affected a different area of his back—specifically, his upper lumbar spine at level L2-3, manifested by a protruding disc and radiculopathy. However, MetLife denied LTD benefits after concluding that the insured’s workplace injury was related to his preexisting degenerative disc disease, for which he had received treatment in the 12-month period before coverage as well as in the three-month period following the policy’s effective date. After exhausting his administrative appeals, the insured filed suit.
Enforceability of preexisting condition clause. The insured noted that although the policy identified when it would pay benefits based on a preexisting condition, it did not state when it would not pay benefits based on a preexisting condition. According to the insured, therefore, the policy did not contain a preexisting condition exclusion. The court disagreed. Reading the clause as providing no limits on when the policy would pay benefits, as the insured advocated, was not how an ordinary person would interpret the contract. In the court’s view, an average person would understand the language to mean that in the scenarios defined, a preexisting condition would not preclude payment. The insured’s reading would render the provision mere surplusage, which would violate both the plain language of the policy and the principles of contract interpretation. Thus, the court concluded that the policy validly allowed MetLife to deny benefits based on preexisting conditions. The language of the provision was clear and, thus, did not violate any requirement for exclusions to be express.
Cause of disability. The insured also contended that because his work-related injury involved a different area of his spine, the preexisting condition provision did not apply. MetLife responded that any treatment for that injury related to the insured’s degenerative disc disorder and spinal stenosis, for which he had previously received treatment, and, thus, his preexisting condition prevented payment of benefits.
The court found that the evidence did not support MetLife’s position. First, MetLife did not dispute that the insured suffered a work-related injury. Second, a radiology report revealed that this injury affected a new part of his back, i.e., level L2-3. Third, this diagnostic finding comported with the insured’s symptoms of pain in the center of his back. Before the workplace injury, the pain was located in his lower back. His pain also escalated from mild to severe, which correlated with a decrease in his ability to function, particularly at work. In sum, therefore, the changes in location, magnitude, and effect of his pain suggested that the pain did not arise from a preexisting condition. Overall, the occurrence of a workplace injury, followed by new anatomical findings tied to different symptoms, all provided evidence that the insured’s disability did not result from a preexisting condition.
Moreover, MetLife’s determination that the insured’s problems were “related” to his preexisting condition was conclusory and, if taken to its logical extent, would lead to an absurd result. For example, the court could not see how a back injury after being hit by a bus would necessarily be caused by a preexisting back condition. MetLife also employed the wrong standard in denying benefits. The policy required that the disability “result from” the preexisting condition—not simply “relate” to it. Thus, the policy required a causal relationship between the preexisting condition and the disability at issue—not a mere association.
Because the evidence showed that the insured’s workplace injury did not result from his preexisting degenerative disc disease, the court ordered MetLife to pay the insured past and future LTD benefits for his July 20, 2016 back injury.
SOURCE: Meche v. Metropolitan Life Insurance Co., (E.D. La.), No. 18-3995, January 13, 2020.
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