Unum’s “Gainful Employment” Spells Long Term Disability Denial

New York, NYBefore signing a Unum health insurance policy, you might want to read the fine print. If the Insurer mentions “gainful employment”, it likely means a bad faith tactic and long-term disability denial.

Unum’s ‘gainful employment’ means that, for the first two years of benefits, an employee is "disabled" if they cannot perform their regular job. After two years, an employee is disabled only if they cannot perform any occupation. Unum has "sole discretionary authority to construe the terms of the Plan and all facts surrounding claims" and to make benefits determinations.

Mary Allen suffered multiple injuries in a car accident that resulted in spinal surgery. Unum paid her short-term disability benefits and she returned to work part-time as a pharmaceutical assistant with stipulations from her doctors: no lifting of 10 lbs. above the waist; no cradling phone; no twisting or bending; no staying in one position for greater than one hour; and no work greater than four hours, three times per week. Allen often had to take breaks up to 60 minutes to ease muscle spasms.

Despite her injuries and doctors’ restrictions, Unum decided that Allen could work under “gainful occupation”. As part of their long-term disability (LTD) denial, they asked her doctors whether she could work full-time in a sedentary occupation. Clearly she couldn’t continue her current occupation. Allen’s doctors--primary care physician, chiropractor, and neurologist-- told Unum that she couldn’t work in a sedentary job either.

But Unum’s independent medical examiners trumped Allen’s doctors. Without seeing her, an internist and a neurologist reviewed Allen's medical records and both determined that she indeed could work full-time at a sedentary occupation.

If a claimant isn’t totally disabled, Unum employees “Work the claim to deny based on not meeting the definition of disability in the policy,” said Linda Nee, a former Unum Claims Handler. “Their primary objective is to deny or remove LTD claims and this tactic is one way to achieve that objective.”

Unum and Facebook
Allen’s accident happened in 2010. In 2014 Unum denied her appeal and in September 2016 it denied her second appeal, which was partially based on the insurer’s “mistake” in its voluntary review of her claim. (ERISA’s procedural require-ments do not cover second, voluntary appeals.) Unum mistakenly relied on the wrong Facebook profile to assume that Allen was planning to take a cruise. Despite this gaff, the court found that “Unum did not abuse its discretion in denying plaintiff’s claim for long-term disability benefits”.

Proposed Disability Insurance Rule
But a proposed rule (proposed in November 2015, and currently being finalized) may give disability insurance participants more rights when appealing claims denials. ERISA specialists say this new rule is seeking “to give claimants an edge in court they do not currently enjoy.” It seeks to ensure that those reviewing claims “are impartial by mitigating potential conflicts of interest on the part of sponsors and insurers. Plans would not be allowed to provide bonuses to adjudicators, for instance, based on the number of claims they deny.” Unum has been found guilty time and again of this practice, specifically paying and providing bonuses to its medical examiners.

If this rule was in effect during Allen’s second appeal, would she be reinstated her LTD? The plan requires that insurers disclose to the employee any new information that supports denial. Should the plan go forward, one thing is certain: attorneys will be busy with LTD appeals.

“The ability to earn a living – our income – is the most valuable asset we have, and protecting that asset is increasingly important,” said Richard P. McKenney, president and CEO of Unum, and reported by BusinessWire. “Small employers can play a significant role in helping their employees insure against some very real risks to their financial stability.”

The Chattanooga, Tennessee-based insurer reported $237 million in net income for the first quarter of 2015 on $2.8 billion in revenue, compared with $224 million in net income on $2.7 billion in revenue for the second quarter of 2015.