Disability Benefits

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These executive summaries were compiled from EMPLOYEE BENEFITS INFOSOURCE database, a source for information on employee benefits and human resources.

Easing the Burden of Chronic Pain in the Workplace: The Role of Human Resources.
Lipnick, Jesse; Benefits Magazine; v49 no3 pp 36-39 Mar 2012; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Unusually persistent pain leads to 19 percent of workers compensation medical costs, with pain medications being the first and third most commonly prescribed drugs for injured workers, according to NCCI Holdings. Multiple reports document the costs to insurers, employers and taxpayers. Plan sponsors rarely insist on the most cost-effective treatment, and intervention for suspected drug abuse is constrained by regulatory and privacy limitations. Intermittent urine drug testing has been proven to be cost effective by assessing adherence to drug therapy. Human resource professionals can support workers dealing with chronic pain by ensuring that appropriate medical management is available and by promoting awareness of pain management programs, including nonpharmacologic strategies.
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Meta-Evaluation of Worksite Health Promotion Economic Return Studies: 2012 Update.
Chapman, Larry; American Journal of Health Promotion; v26 no4 pp TAHP1-TAHP10 suppl. Mar-Apr 2012; journal article

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Abstract : Researchers performed a meta analysis of 62 studies on worksite health promotion. The studies met rigorous selection criteria and focused on smoking prevention and cessation, physical fitness, nutrition, stress management, medical self care, hypertension control, weight management, prevention of back pain and injury, seat belt use and prenatal care. Evaluation of the studies shows works published after the median 1996 to be stronger with better methodologies and newer prevention technologies. Over half of the studies measured results based on health care utilization or cost, and almost 42 percent measured sick leave absenteeism, but few tracked costs associated with workers compensation and disability management. Seven in ten looked at only one outcome measure, probably understating the economic impact of their interventions. A more recent meta analysis of 22 studies showed $3.27 in medical cost savings per dollar spent on worksite health promotion programs, and 22 studies focusing on sick leave absenteeism yielded $2.73 in savings per dollar spent.
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Misdiagnosis: The Clinical Integration Solution.
Falchuk, Evan; Employee Benefit Plan Review; v67 no3 pp 15-16 Mar 2012; journal article

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Abstract : Research estimates the rate of misdiagnosis at 20 percent or higher. This is the result of lack of integrated clinical data, time pressure, inattention to detail and provider stress, and contributes to soaring health costs, and patient confusion and suffering. The solution is clinical integration, starting with a health plan sponsor's expectation that all vendors will coordinate efforts to support employees' disease management. Covering disability, specialty pharmacy, care providers, wellness programs and disease management, clinical integration aims to make the most efficient use of existing benefit offerings. It starts with the right diagnosis, which should be checked by a second opinion or more, considering personal and family medical history. Employers should insist that employees take active part in clinical integration, being educated about the true costs of care and being responsible health care recipients.
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Splitting the Check.
Darras, Frank N.; Best's Review; v112 no11 p 82 Mar 2012; journal article

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Abstract : The treatment of disability benefits in a divorce is at the core of Luginbill v. Luginbill, heard by the Minnesota Court of Appeals, and Hatcher v. Hatcher, heard by the Arizona Court of Appeals. In both cases, the husbands became disabled and started receiving benefits before their divorce. In Luginbill, the disability benefits were judged to be a marital asset since the policy was purchased with marital property, and the disability occurred and benefits started during the marriage. The court awarded the husband 65 percent of future payments and 35 percent for the wife. In Hatcher, the court saw part of the benefit as community property, with part the husband's property as compensation for his limited future earning capacity.
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Court Grants Equitable Tolling of Statute of Limitations.
Benefits Magazine; v49 no2 p 52, 54 Feb 2012; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : In Ortega v. Orthobiologics LLC et al. the First Circuit Court of Appeals allowed the plaintiff to proceed with his claim. The plaintiff filed a claim for long-term disability benefits when his disability plan did not include a limitation period. After the limitation period was established and had expired for the plaintiff's claim, the claim was rejected, and he filed suit several years later. The court rejected the plaintiff's claim of equitable estoppel but allowed the claim under equitable tolling, in which a party may be excused a failure to take timely action due to circumstances beyond his or her control. The court concluded that the plaintiff had missed the deadline because he was materially misled by the defendant.
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Get Well Sooner.
Doyle, Leigh; Benefits Canada; v36 no2 pp 11, 13 Feb 2012; journal article

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Abstract : The Vancouver Coastal Health Authority faced a critical staffing shortage in 2008 with insufficient applicants, high numbers of workers on disability and soaring long-term disability premiums. A British Columbia government audit led to an overhaul in disability management. Phase 1 focused on early intervention, speeding the time until first contact before a worker started disability. Within three years, this resulted in a saving of $2.5 million from productivity, absenteeism and long-term disability costs. Phase 2 focused on getting those on disability or on the edge to get back to whatever work they could do, without requiring them to be fully healthy. Critical components in the process included securing management support, having sufficient resources to handle the outreach and working with all stakeholders, including managers, unions, union members and nonmembers.
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No Offset of Disability Benefits for Veteran Benefits.
Benefits Magazine; v49 no2 p 59 Feb 2012; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : In Riley v. Sun Life and Health Insurance Co. et al. the Eighth Circuit Court of Appeals ruled the defendant plan administrator's offsetting of disability benefits by the value of veterans' benefits to be arbitrary and capricious. The plan terms provide for offset by other income, defined as disability or retirement benefits under the United States Social Security Act (SSA), the Railroad Retirement Act (RRA) or any other similar act or law. A district court upheld the defendant's interpretation that this included disability benefits paid by the Department of Veterans Affairs. The Eighth Circuit overturned that interpretation, saying the defendant had undergone no meaningful analysis of the Veterans' Benefits Act to determine if it was similar to the SSA or the RRA.
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Other Recent Decisions.
Benefits Magazine; v49 no1 pp 62-64 Jan 2012; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : In the case of Lee v. Kaiser Foundation Health Plan Long Term Disability Plan, the district court for the Northern District of California supported the administrator's finding no evidence that the plaintiff's was too depressed and physically impaired to work, and no bias or significant structural conflict shading the administrator's decision. In Helton v. AT&T Inc. et al., the district court for the Eastern District of Virginia ruled the plan administrator violated ERISA disclosure obligations, which resulted in the plaintiff's not learning about a plan amendment and retirement benefit change. Because the administrator failed to ensure updates were received, the plaintiff was due retroactive benefits. In Marcum v. Retirement Plan for Hourly-Rated Employees of Noranda Aluminum et al., the district court for the Eastern District of Missouri ruled the defendant's failure to promptly respond to the plaintiff's appeal about early retirement benefits were not serious enough to indicate an abuse of discretion or justify overriding the administrator's decision. In Standard Insurance Company v. Johnson et al., the district court for the Northern District of Oklahoma relied on the doctrine of substantial compliance to sort out multiple beneficiaries' competing claims to a deceased plan participant's benefits, since there were gaps in the participant's completion of forms.
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Workers' Compensation: Paying Providers to Use Best Practices Improves Workers' Health Care, Study Finds.
Shukovsky, Paul; Daily Labor Report; no234 p A11 Dec 6, 2011; journal article

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Abstract : A study evaluating a Washington state program found that cash incentives for health care providers to use best practices when treating injured workers substantially reduced lost work time due to the injuries. Patients cared for by incentivized providers had a 21 percent lower risk of being off work than the control group. The four best practices incentivized were submitting an initial report within two business days, communicating with the employer about return to work, documenting activity restrictions and treatment plans when the patient will miss work and assessing the impediments if a worker is off the job for four weeks. The system evaluated by the study was associated with decreased incidence, duration and costs of disability.
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Circuits Weigh in on the "Interactive Process" Under the ADA of 1990.
Lavin, Howard S.; DiMichele, Elizabeth E.; Employee Relations Law Journal; v37 no3 pp 86-91 Winter 2011; journal article

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Abstract : The Supreme Court's refusal to hear Jakubowski v. The Christ Hospital prolongs the ongoing uncertainty about employers' and employees' responsibilities to find reasonable accommodation for a disability. In this case, the plaintiff had Asberger's Disorder, which interfered with effective patient communication necessary for a family practice medical resident. The plaintiff proposed to improve his communication skills, but the employer stated that the proposed reasonable accommodation, knowledge and understanding on the part of physicians and nurses, would be insufficient. The Sixth Circuit Appeals Court upheld the district court's grant of summary judgment for the defendant. The Third, Fifth and Seventh Circuits require employers to work actively toward accommodation, even proposing solutions. The Ninth, Tenth and Eleventh Circuits require the employee to identify a workable and reasonable accommodation at the start of the interactive process with the employer. In the absence of consistent legal guidance, employers should communicate with the employee and consider proposals in good faith, documenting the interactive process.
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Court Defers to Reasonable Interpretation of Ambiguous Plan Provision.
Benefits Magazine; v48 no12 p 49 Dec 2011; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : The Seventh Circuit Appeals Court reversed the decision of the lower court, deferring to the plan benefit committee's decision where the plan language was not clear. The plaintiff in Frye v. Thompson Steel Co. Inc. accrued benefits under a defined benefit plan and retired after 42 years. His monthly payment was offset to pay back workers compensation settlements and then revised for a longer payback period. The district court found the offset decision to be capricious and arbitrary. The plan language required payback for compensation payments made for a permanent disability for which the employer was liable, but the plaintiff asserted his earlier disabilities were not permanent or total and should not be offset. The appeals court ruled the issue of permanent disabilities was ambiguous in the plan documents and that, while it may not come to the same conclusion as the committee did, the ambiguity justified deferring to the committee's decision.
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New Build.
Smith, Rebecca; Benefits Canada; v35 no12 pp 53-54 Dec 2011; journal article

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Abstract : Canadian workers lost 9.1 days for personal reasons in 2010, up from 8.0 days in 2000, with a similar increase in disability absences and soaring costs. This is despite the proliferation of wellness initiatives, causing employers to consider other workforce management strategies stressing prevention and intervention. Dealing with wellness and disability involves a solid foundation targeting the most significant health cost drivers, followed by prevention, accommodation and mitigation, and recovery support. The final component is integrated support involving health risk assessments, employee and family assistance programs, attendance management and targeted health benefits. Stronger case management and more effective use of metrics are essential for demonstrating and sustaining success.
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Back to Work.
Patton, Carol; Human Resource Executive; v25 no12 pp 46-47 Nov 2011; journal article

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Abstract : Disability management at Excel Managed Care & Disability Services Inc. changed when efforts to help workers get back to work was expanded to include nonoccupational injuries. Excel, working with The Standard, trained and placed onsite consultants to work with returning employees, managers and HR. A 2010 Mercer survey found that only a third of employers had a formal, nonoccupational return-to-work program in 2010, despite a return of $2 to $10 for every dollar invested and the requirements of the Americans with Disabilities Act Amendments Act of 2008. Key factors for success include returning the employee to work as soon as possible, supervisor training on transitional work assignments, communication to all parties affected, collecting and analyzing data and developing a formal policy for handling short-term disabilities.
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Court Considers Plan Documents Collectively to Assess Discretionary Authority.
Benefits Magazine; v48 no11 pp 57, 59 Nov 2011; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : The District of Columbia Circuit Court of Appeals found in Pettaway v. Teachers Insurance and Annuity Association of America et al. that the plan document, summary plan description and policy document must be reviewed collectively to determine if the defendant plan administrator had the authority to determine benefits eligibility or construe terms. The plaintiff alleged that only the policy document, which did not grant the administrator that authority, should be considered. Considering all the documents together, the District of Columbia Circuit upheld a lower court ruling that the defendant had properly denied the plaintiff's disability claim and the plaintiff had been given a reasonable opportunity to appeal.
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Court Finds LTD Policy Clear and Unambiguous.
Landy-Shavim, Michelle; Canadian Benefits & Compensation Digest; v29 no5 pp 6, 8 Nov 2011; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : In Rooney v. NAV Canada the Court of Queen's Bench of Manitoba found the defendant company's long-term disability (LTD) policy clearly allows for reduction by the amount of any pension benefits given out by a company sponsored plan. The plaintiff contended that he was eligible for full LTD benefits if he received a lump-sum pension payout. The court said that finding in the plaintiff's favor would result in a windfall and that his benefits would be reduced if he took the lump sum.
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How Grand the Bargain?
Rousmaniere, Peter; Risk & Insurance; v22 no11 pp 52, 54 Nov 2011; journal article

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Abstract : The year 2011 is the 100th anniversary of workers compensation. While state legislation tends to favor employers and costs are down, workers compensation has become increasingly complex and risk management requires more expertise than ever before. Workers compensation costs vary significantly, even for similar businesses, and a Valen Technologies study finds that well-managed employers are typically charged higher premiums than they should be. Although more employees are trying to integrate disability management, the standalone nature of workers compensation means it interacts poorly with other benefits.
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Integrated Disability Management.
Cranston, Susan; Canadian Benefits & Compensation Digest; v29 no5 pp 9-11 Nov 2011; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Absenteeism costs Canadian employers at least $7.4 billion annually, according to the Conference Board of Canada, and the aging of the Canadian workforce is occurring at a time when Canadian workers average more sick days per year than U.S. or U.K. workers. A June 2011 Sanofi-Aventis survey finds that 72 percent of plan members feel employers should be highly involved in encouraging healthy workplaces. An integrated disability management (IDM) program can help. To create an IDM program, employers should first analyze their current disability programs, then integrate private payer and publicly regulated components, integrate return to work, rehabilitation and other programs valued by their employees, track disability results, create a single point of contact for disability case management and develop an effective communication plan.
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Pushing the Envelope: New Disability Regulations Increase Employers' Exposure Risk.
Storck, Jason; Atwater, Allysun; Employee Benefit Plan Review; v66 no5 pp 5-7 Nov 2011; journal article

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Abstract : The expanded definition of disability in Americans with Disabilities Act Amendments Act (ADAAA), as interpreted by the Equal Employment Opportunity Commission, puts unwary employers at risk of noncompliance. The definition covers those whose physical or mental impairment substantially limits their performance on essential work functions and those who are perceived to be disabled or have a record of disability. Protected individuals qualify for reasonable accommodations. Employers must attend to the extensive range of activities and bodily functions covered and to exceptions and mitigating measures. Some state and local laws mirror the ADAAA regulations, and provisions of the Genetic Information Nondiscrimination Act add to the potential for discrimination.
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The New Disability Discussion.
Gresham, Lynn; Employee Benefit Adviser; v9 no11 pp 44, 48 Nov 2011; misc. publication

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Abstract : The conversation for disability insurers and brokers is focusing on future growth opportunities. The Gen Re 2011 survey on group disability shows new long-term disability (LTD) sales up four percent from mid-2010 to mid-2011, a change from the 21 percent drop of the previous year. New short-term disability (STD) sales were down one percent, better than the eight percent drop of the prior year. The Hartford reports 49 percent of workers have STD, down six percent, and 44 percent have LTD, down three percent. Disability coverage is playing a larger part in financial planners' discussions, and voluntary coverage is a growing area for sales. Employers continue to play a key role, and brokers should help them understand the link between disability insurance, medical absence management and return to work programs, especially for an aging workforce with a range of impairments.
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When a Disability Isn't Disabling.
Slott, Ed; Financial Planning; v41 no11 pp 101-102, 104 Nov 2011; journal article

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Abstract : Some individuals have used the disability exception to avoid the ten percent penalty on distributions from qualified plans before age 59-1/2. The IRS requires that the disability must prevent any work, and the claimant must provide proof. In repeated cases, however, the Tax Court has ruled against the claimant, finding lack of evidence of full disability. Involvement in various other businesses undermined claimants' assertions that their disabilities prevented them from engaging in any substantial gainful activity. Many of those claiming mental illness were unable to meet the requirement for institutionalization or continuous psychiatric supervision.
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Conflict of Interest Does Not Alter Outcome of Benefits Decision.
Benefits Magazine; v48 no10 pp 53, 55 Oct 2011; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : In Blankenship v. Metropolitan Life Insurance Co., the Eleventh Circuit Appeals Court differed with the district count on the weight that should be given a conflict of interest when a plan administrator is also the payer of benefits. The plaintiff in the case received short- and long-term disability benefits after a heart attack and later knee surgery. The defendant informed him benefits would be terminated unless he could show he was unable to perform any occupation. Based on reports from the plaintiff's physicians and reviews by independent specialists, the plan ended benefits, a decision the district court deemed arbitrary and capricious and clouded by structural conflict. The Eleventh Circuit reversed that decision, noting the defendant's process for reviewing medical evidence was reasonable, and it was permitted to weigh the differing medical opinions. Those facts stand without regard to the defendant's conflict of interest, and the court found the conflict did not change the disposition of the claim.
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Court Authorizes ERISA Action Against Nonplan and Nonplan Administrator Party.
Benefits Magazine; v48 no10 p 55 Oct 2011; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : The Ninth Circuit Appeals Court ruled in Cyr v. Reliance Standard Life Insurance Co. that a benefits suit under ERISA Section 502(a)(1)(B) need not be directed at the plan or its administrator. In this case the insurer unofficially but effectively performed the administrator's function, controlling benefits decisions. The plaintiff sought to have disability benefits made consistent with a retroactive pay adjustment, but the insurer refused, prompting the case. The insurer claimed it was not a proper party to the claim. The district court granted summary judgment for the plaintiff. On appeal, the Ninth Circuit found Section 502(a)(1)(B) does not limit the parties that may be defendants in a claim. It also found support in the Supreme Court's decision in an ERISA Section 502(a)(3) case. The court ruled the plaintiff was entitled to proceed with her suit against the insurer.
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Court Finds Administrative Procedures Deemed Exhausted.
Benefits Magazine; v48 no10 p 52 Oct 2011; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : The Ninth Circuit Appeals Court ruled the plaintiff in Barboza v. California Association of Professional Firefighters et al. properly fulfilled his obligation to use administrative remedies in his claim for long term disability benefits. Though the parties agreed the plaintiff should be awarded benefits, they disagreed over a partial offset related to payments received. The district court granted summary judgment for the defendant, dismissing the claim, but the appeals court recognized the administrator's failure to resolve the case in a timely fashion to be key. The court agreed with the plaintiff's interpretation of a 45-day or extended 90-day period for resolving claims, which reflects the DOL's view, not the defendant's use of quarterly meetings to settle disputes. The court also noted the DOL's requirement to give substantial deference to the agency's regulations.
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Plan Amendments: Court Says Termination of Benefits Was Unreasonable Interpretation of Plan.
BNA's Pension & Benefits Reporter; v38 p 1677 Sep 13, 2011; journal article

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Abstract : The District Court for the Southern District of Ohio ruled in Price v. Board of Trustees of the Indiana Laborer's Pension Fund that the defendant multiemployer pension plan trustees' decision to terminate the plaintiff participant's disability benefits was arbitrary and capricious. When the plaintiff began receiving benefits, he was told he would receive them until retirement age. Four years later, the plan was amended to limit disability benefits to two years in duration. The court had originally ruled in favor of the plaintiff on the grounds that the benefits had vested and were therefore immutable. The Sixth Circuit Court of Appeals remanded the case back to the district court, instructing it to determine whether the defendant's interpretation of the plan as allowing a disability cap was reasonable. The district court found that the defendants had failed to articulate any reasoning or to address the question of whether the benefits had vested and found their decision unreasonable.
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Disability Flexibility.
Brodsky, Matthew; Human Resource Executive; v25 no8 pp 38, 40-41 Sep 2, 2011; journal article

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Abstract : Flexible work arrangements can have a positive impact on disability management and return to work programs. While telecommuting does not work for all jobs, it can serve as accommodation for a disabled worker or prevent a worker from going on medical leave. Employers are not required to provide telecommuting for disabled workers, but if they allow telecommuting, the Americans With Disabilities Amendments Act requires them to give equal access to its disabled employees. Safety-conscious employers face the question of how to handle workplace safety for telecommuters. Little legal guidance exists in the U.S., in part because accidents in the home office are often not reported as such.
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