Disability Benefits


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

Cause of Action Accrues When Plan Participant Has Reason to Know of Claim's Clear Repudiation.
Benefits Magazine; v52 no3 pp 56, 58 Mar 2015; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : The Eleventh Circuit Court of Appeals upheld the lower court in Witt v. Metropolitan Life Insurance Co. et al., finding the plaintiff's actions seeking to reinstate disability benefits exceeded ERISA's time limitations. Two years after being granted disability benefits for life, the plaintiff failed to provide medical records to support his status, resulting in termination of benefits. He challenged the termination 12 years later and claimed he did not receive the defendants' request for supportive information. The dispute centered on the start of the six-year limitations period, whether originating shortly after the 1997 termination of benefits or with the 2012 final decision. The court ruled that, whether the plaintiff received the original denial letter or not, nonreceipt of benefits for 12 years gave a clear signal of denial, well before the later rejection stemming from the courtesy review of the claim.

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Claim for Equitable Surcharge to Remedy Breach of Fiduciary Duty Can Proceed.
Benefits Magazine; v52 no3 p 59 Mar 2015; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : The District Court for the Northern District of California permitted the plaintiff in Zisk v. Gannette Company Income Protection Plan et al. to pursue his claim seeking equitable relief after the defendant allegedly mismanaged his disability claim. The plaintiff was awarded disability benefits after cancer treatment in 2000, but the defendant terminated benefits in 2012 for failure to provide updated medical records. The plaintiff appealed, asserting the defendant had provider contact information, then delivered the information himself. The defendant did not reinstate benefits, prompting the suit. The plaintiff sought other appropriate equitable relief under ERISA Section 502(a)(3). The court supported the plaintiff, stating such relief is available to individuals and that, with the decision in Cigna v. Amara opening the possibility of an equitable surcharge and another relevant case pending, the case would not be dismissed but allowed to proceed.

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The Return of Integrated Disability Management.
Rousmaniere, Peter; Risk Management; 5 pp Feb 2, 2015; journal article

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Abstract : The concept of integrated disability management emerged in the 1990s but gained little traction, due to bureaucratic siloes separating insurers and service providers and inadequate information systems. In the 2010s the idea has reemerged as total absence management. The change has been driven by mandated absence benefits, risk of litigation for noncompliance, improved technology and engaged service providers. Employers are showing significantly more interest in the approach, prompting expansion in services offered. The case of Sutter Health, a California healthcare system, illustrates the value of managing employee absence proactively and consistently through integrated disability management, using a single, master, self-service platform to handle nearly all absences. The successful transition required coordination of human resource professionals, payroll, metrics and technology.

2014 Benefits Benchmarking.
Mrkvicka, Neil; Benefits Magazine; v52 no1 pp 12-14 Jan 2015; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : The fourth annual Employee Benefits Survey by the International Foundation of Employee Benefit Plans, reflects responses from 571 organizations, almost 20 industries and small to very large firms. Two-thirds offer defined benefit pension plans and 61 percent offer defined contribution plans, primarily 401(k) plans in corporations and 457 plans for public employees. Automatic enrollment with three percent default deferral and target date investment funds have become common. Virtually all offer health care benefits, 73.1 percent through preferred provider organizations while 46.1 percent of corporations offer high-deductible health plans. Short-term disability benefits are offered by 77.9 percent and long-term benefits by 60.7 percent. Vacation is widely tied to years of service, and the average organization offers nine paid holidays annually. About two in five use paid-time-off banks. Extra and innovative benefits include on-site fitness centers, paid day off for birthdays, pets at work and subsidies for hybrid vehicles.

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Court of Appeals Lacks Jurisdiction Where District Court Does Not Issue Final Order.
Benefits Magazine; v52 no1 p 50 Jan 2015; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : The plaintiff in Mead v. Reliastar Life Insurance Company sought long-term disability benefits for cervical disc disease that prevented her carrying on her own or any other occupation. When denied benefits for inability to perform her own occupation, the plaintiff filed the case. The district court remanded it to the administrator for consideration under the any occupation standard and closed the case, prompting the defendant to appeal. The defendant calculated benefits under the own occupation definition as required but denied benefits under the any occupation definition. The plaintiff was blocked from reopening the case in district court pending the appeal and sought to dismiss the appeal for lack of jurisdiction without a final district court decision. The Second Circuit Appeals Court ruled that the district court's remand order did not close the case and prevented the appeals court from assuming jurisdiction.

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Other Recent Decisions.
Benefits Magazine; v52 no1 pp 62-64 Jan 2015; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : In Barrett v. Citigroup, Inc. et al. the District Court for the Southern District of New York found the defendant employer did not abuse discretion by calculating employee benefits on the basis of Social Security Administration documentation when original payroll records could not be found. Coworker corroboration of salary would not provide objective proof. In Kosloff et al. v. Smith et al. the District Court for Kansas dismissed the plaintiffs' claims of fiduciary breach and embezzlement as time barred and/or preempted by ERISA. The plaintiffs asserted the defendants failed to provide annual funding notices and improperly shifted funds to another plan. The plaintiffs stated they had no access to supportive documents until after the statute of limitations expired, but the court found no information was actively concealed. In McCandless v. Standard Insurance Company the plaintiff sought review of a second denial of disability benefits after a previous denial based on an independent medical evaluation. The defendant failed to convey the plaintiff's additional documentation for review and had the same review specialist generate both denials. The Eastern Michigan District Court found the decision making procedures to be defective and remanded the case for further consideration. In Preville v. Pepsico Hourly Employees Retirement Plan the Southern District of New York granted summary judgment for the defendant denying long-term disability benefits, finding the plaintiff did not meet the plan's requirement to file for benefits within 30 days of notification of eligibility. The Southern District of New York found In Re UBS ERISA Litigation, a stock drop case, that the plaintiff lacked standing since she did not demonstrate personal financial injury, and she was not permitted to amend her complaint.

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Front-Line Managers Often Cause ADA Violations, EEOC Says.
Leave and Disability Coordination Handbook; v18 no2 pp 5, 9 Dec 2014; journal article

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Abstract : Chai Feldblum of the Equal Employment Opportunity Commission (EEOC) explained the critical role of front line managers in avoiding violations of the Americans with Disabilities Act (ADA). To lower the risk of ADA claims, managers must let employees know qualitative and quantitative measures of job performance and inform employees in a timely manner of any shortcomings, setting clear goals for improvement. A distinction must be made between essential job functions and the job-related qualification standards for a person to carry out those functions. Regular physical attendance may be a qualification standard but not a job function. Managers should recognize even if subtle or unexpressed requests for accommodation. With an employee having an obvious disability, managers can initiate the interactive process toward accommodation. Employers may request medical documentation and start a trial period of accommodation to test its effect and potential undue hardship.

Review Benefit Denial Letters.
Murtos, Alice;O'Leary, Meredith L.; Employee Benefit News; v28 no15 p 36 Dec 2014; journal article

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Abstract : A participant in an ERISA-governed disability plan applied for benefits but was issued a denial that did not specify that any request for judicial review must be initiated within three years of the denial. The plaintiff's claim, made four years after the denial, was rejected for exceeding the time limit. In Moyer v. Metropolitan Life Insurance Co. the district court found the case time-barred and ruled for the administrator. The Sixth Circuit Court of Appeals reversed, noting that ERISA Section 503-1(g)(1)(iv) requires the review procedures, applicable time limits and a statement of the right to civil action to be included with the denial letter, but that the administrator had failed to state the contractual three-year time limit. The Fourth and Fifth Circuits apply a substantial compliance test relying on the content of aggregated communications. Plan administrators should protect themselves by providing time limits and summary plan description with any denial of benefits.

Telecommuting as a Reasonable Accommodation: A Remote Possibility?
Rocco, Dean A.; Employee Relations Law Journal; v40 no3 pp 48-52 Winter 2014; journal article

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Abstract : The Americans with Disabilities Act requires employers to provide reasonable accommodations for disabled workers that would not amount to undue hardship for the employer. The Equal Employment Opportunity Commission (EEOC) has issued guidance on whether work can be performed at home, while recognizing a range of considerations such as adequate supervision, access to materials and resources and the need for face-to-face interaction. The EEOC notes that partial telecommuting may serve as an accommodation, and can be limited in time or on an as needed basis. While telecommuting can boost productivity and morale, many employers are disinclined to support it. Courts have respected their denial of telecommuting, though situations must be reviewed case by case. Employers choosing to limit telecommuting should address the issue in employee handbooks, policies and job descriptions, and ensure policies and past practices are consistent with their position.

The Social Security Disability Insurance Program.
Kilgour, John G.; Compensation and Benefits Review; v46 no4 pp 239-246 Dec 2014; journal article

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Abstract : In 1955 the Social Security Act was amended to provide benefits to fully disabled workers, with a Disability Insurance (DI) trust fund financed through a payroll tax. Amendments over the years have altered definitions and broadened eligibility, making Social Security Disability Insurance an important safety net, commonly bridging unemployment and Social Security retirement benefits. Disabled workers must have accumulated sufficient work credits and be unable to engage in substantial gainful activity. Benefits are based on covered earnings through the individual's work history. At full retirement age, coverage shifts from the DI trust fund to Social Security. At the existing rate of funding and usage, the trust fund will run dry in 2016. A proposed shift of money from the Old Age and Survivors Insurance to the DI trust would postpone depletion until 2033, but delaying action will make any solutions more complex and costly.

7 Questions Toward More Effective Workers' Comp Programs.
Skrocki, Ron; Benefits Magazine; v51 no11 pp 48-52 Nov 2014; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : A workers compensation program works most effectively for both employers and employees if certain critical issues are considered. The program can be customized to reflect the organization's commitment to accident prevention, wellness and return to work goals. An ergonomic evaluation can help uncover causes of injuries, and a qualified nurse case manager can serve as liaison between patient and employer. A medication safety program can help circumvent opioid abuse and balance drug utilization with price. Catastrophic claims are rare but costly and require early intervention and medical management. Employers should be alert to possible effects of the Affordable Care Act, such as claims shifting from group health plans to workers compensation. Data from the workers comp program should be integrated with other claims data and analyzed as a whole to drive improvements across the program.

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EEOC Adopts Controversial Positions in Recently Issued Enforcement Guidance on Pregnancy and Related Issues.
Ennis, Peter J.; Employee Benefit Plan Review; v69 no5 pp 5-7 Nov 2014; journal article

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Abstract : The Equal Employment Opportunity Commission (EEOC) put out guidance based on a broad view of the Pregnancy Discrimination Act regarding accommodations for employees who are pregnant, have been pregnant or hope to become pregnant. The guidance addresses discrimination and decisions based on assumptions about an employee. The EEOC discusses accommodations such as leaves of absence and light duty, a matter to be resolved by the Supreme Court in Young v. United Parcel Service, Inc. It also addresses health insurance coverage of pregnancy and related conditions as well as contraceptive coverage, parental leave, and pregnancy-related conditions under the Americans with Disabilities Act Amendments Act (ADAAA). The EEOC allows exceptions to eligibility rules in leave policies for pregnant women. The agency recommends that pregnant women be treated like others with a medical condition but that circumstances be considered under the ADAAA, Family and Medical Leave Act and other federal and state laws.

EEOC Targets Wellness Incentives.
Dunning, Matt; Business Insurance; v48 no21 pp 1, 41 Oct 13, 2014; journal article

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Abstract : Lawsuits brought by the Equal Employment Opportunity Commission (EEOC) against two firms demonstrate the agency's requirement of strict compliance with the Americans with Disabilities Act (ADA) in connection with wellness programs. Flambeau Inc. and Orion Energy Systems Inc. penalized employees who did not complete health risk assessments and biometric screenings, in violation of the Affordable Care Act's (ACA) requirement that wellness program participation be voluntary. The two lawsuits contradict the Eleventh Circuit Appeals Court's ruling that allowed Broward County, Florida, to penalize employees who did not complete a health risk assessment. Some efforts to promote employee wellness are backfiring and creating uncertainty and tension between the ADA and ACA, and the EEOC has not produced formal nondiscrimination guidance as of late 2014. Many of the chronic diseases that wellness programs target qualify as disabilities under the ADA, blocking employers from applying standard incentives and conditions to those individuals and requiring reasonable accommodations to get a reward.

The Next Chapter for Return to Work.
Kuehner-Hebert, Katie; Risk & Insurance; v25 no7 pp 42-43 Sep 1, 2014; journal article

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Abstract : The improving economy and requirements of the Americans with Disabilities Act Amendments Act (ADAAA) are stimulating a resurgence in return to work programs, often geared toward reasonable accommodations for obese workers classified as disabled under the ADAAA. But a conflict exists between the ADAAA and workers compensation. Workers comp incentivizes employers to get workers back on temporary light duty, while an employee disabled by a nonwork condition may need long-term light duty as a reasonable accommodation. Employers should consider limiting light duty assignments to a specific time period and evaluate accommodation options on a case-by-case basis. In some cases nonoccupational accommodations, such as transitional placement in volunteer positions, may be useful. Inconsistent treatment of work-related and non-work-related injuries and conditions may open them to litigation.

Varied Response to EEOC's New Pregnancy Guidance.
Employee Benefit News; v28 no11 pp 10-11 Sep 1, 2014; journal article

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Abstract : Updated enforcement guidelines from the Equal Employment Opportunity Commission (EEOC) blend aspects of the Pregnancy Discrimination Act of 1978 and the Americans with Disabilities Act regarding pregnant employees. President Barack Obama has recognized the prevalence of women in the workforce and stressed the need to accommodate pregnant workers. The EEOC has prioritized eliminating pregnancy-related discrimination. The guidance clarifies that the EEOC does not permit an employer to distinguish those with work-related injuries from those limited by a nonwork related condition when considering accommodations, protecting pregnant workers.

Supporting Employee Success When Mental Health Is a Factor.
Baynton, Mary Ann; Plans & Trusts; v32 no5 pp 6-11 Sep-Oct 2014; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : According to the Mental Health Commission of Canada, as many as 500,000 Canadians will not go to work in any given week because of mental illness. The unseen nature of mental healing may mean that employers do not know how to accommodate a worker returning from a mental health issue. Support should begin as soon as an employee takes mental health leave, with employers making regular contact with the employee. Employees' issues often can be addressed by reducing or eliminating one or two key stressors in the workplace. Increasing an employee's involvement in the most comfortable elements of the job can also help. A group of top Canadian occupational health and safety professionals have created Supporting Employee Success, a free online tool to help managers create back-to-work programs for employees with mental health issues.

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Benefits Integration Picks up Steam.
Goldberg, Stephanie; Business Insurance; v48 no18 pp 13-14 Aug 18, 2014; journal article

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Abstract : While the financial benefits of integrating short and long term disability, workers compensation leave, family and medical leave and other absences are well recognized, the demand for compliance is adding impetus to the drive toward integration. The Family and Medical Leave Act, Americans with Disabilities Act and the Rehabilitation Act, as well as state laws and company policies impose complex and intertwined rules, prompting many employers to outsource leave management. Aon Hewitt reports that 36 percent of employers tie worker absence to corporate financial status and 22 percent connect health and absence management with workers comp in 2014, though over half may start by 2019. Though compliance and penalty concerns may spur integration, managing absence holistically through a total absence management program yields substantial opportunities for human resource management.

Court Affirms Denial of Benefits and Awards Attorney Fees.
Benefits Magazine; v51 no8 p 53 Aug 2014; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : The employee plaintiff in Spenrath v. Guardian Life Insurance Co. of America had seizurelike episodes that were not definitively diagnosed by her primary physician and two neurologists. She failed to undergo additional recommended testing. Inability to focus and poor performance reviews led her to stop work three years later and seek long-term disability benefits. The defendant plan administrator denied the claim, lacking medical evidence of any condition causing the functional impairment. The district court found the administrator properly considered all evidence provided and granted attorney fees for the defendant. The Fifth Circuit Appeals Court found no substantial evidence of disability, upheld the lower court, affirmed the attorney fee award and granted the defendant an additional $6,000 for attorney fees for the prolonged litigation of the plaintiff's weak case.

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Court Upholds Disability Plan's Discretion and Full and Fair Review Process.
Benefits Magazine; v51 no8 p 57 Aug 2014; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : The plaintiff in Prezioso v. Prudential Insurance Company of America was injured at work and fired the next day for failing to meet sales targets. He applied for but was denied short- and long-term disability benefits. The plan administrator stated the injury did not prevent the plaintiff from performing his job during the plan elimination period. The district court granted summary judgment for the defendant. The plaintiff appealed contending the court wrongly used the abuse of discretion standard of review since the plan language did not specify discretion for the defendant. The Eighth Circuit Appeals Court disagreed, finding wording regarding proof of disability satisfactory to the plan to clearly indicate discretion.

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Employers, Employees Increasingly at Odds Over Wellness Incentives.
Employer's Guide to Fringe Benefit Rules; v21 no2 pp 7-8 Aug 2014; journal article

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Abstract : A Kaiser Family Foundation survey found 76 percent of general public respondents support wellness programs, but 62 percent oppose mandatory employee participation, with similar results found among adults with employer-sponsored health insurance. Women are more likely to participate at 73 percent compared to 54 percent of men. The Society for Human Resource Management shows shifts in prevalence of wellness programs to contain long-term health care costs, used by 36 percent of respondents in 2014, 43 percent in 2013 and 28 percent in 2012. Incentives were most widely used for getting yearly health risk assessments, refraining from tobacco use and wellness program participation. Aon Hewitt reports one in five employers use tiered incentives, richer for those carrying out specific wellness activities and basic for others.

Worksite Education Key to Voluntary Disability Plan Success.
Lundquist, Barry; Broker World; v34 no8 pp 28-30, 32 Aug 2014; journal article

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Abstract : Health care reform has contributed to unprecedented change in the employee health benefit and disability insurance industries, for better or worse. Slightly more employers offered long term disability plans in 2013 than previously, but fewer employees took up the offer, according to the Council for Disability Awareness (CDA). The CDA's 2014 report also showed the average age of new disability claimants to be rising, though 41 percent of those approved were in their 40s or younger, women claim more but men are catching up, and the number of new claimants fell in 2013 but the payments increased. Most employees and brokers mistakenly see disability rising from accidents, failing to realize how often common disorders and illnesses interrupt the ability to work. These facts point to the need for stronger education on disability preparedness and rising opportunities for voluntary product sales.

Court Affirms VEBA's Denial of Disability Benefits.
Benefits Magazine; v51 no7 p 60 Jul 2014; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : The Second Circuit Appeals Court ruled in St. Onge v. Unum Life Insurance Company of America that the defendant's benefit denial did not amount to abuse of discretion. The voluntary employee benefits association (VEBA) plan administrator found the plaintiff not disabled and denied disability benefits. The plaintiff asserted the defendant ignored evidence and misconstrued the record, applied the wrong criteria to assess the demands of the job and had a conflict of interest. The administrator consulted independent physicians, arranged a functional capacity exam and reviewed the plaintiff's physician's opinion. The Appeals Court found the medical review sufficient, the job task analysis unpersuasive and any conflict of interest to be absent, upholding summary judgment for the defendant.

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Court Awards Attorney Fees to Successful Plaintiff in Claim for Disability Benefits.
Benefits Magazine; v51 no7 p 62 Jul 2014; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : After an employee suffered debilitating anxiety and depression following heart surgery, he applied for but was denied long-term benefits, despite his psychiatrist's recommendation. In Donachie v. Liberty Life Assurance Company of Boston the district court granted summary judgment for the plaintiff but denied the requested attorney fees. The Second Circuit Court of Appeals ruled the defendant's denial of disability benefits was arbitrary and capricious for ignoring substantial medical evidence. Considering the issue of attorney fees, the court noted fees should be granted to a prevailing party unless there is particular justification for not doing so. Finding no such justification, the appeals court vacated that portion of the lower court's decision and remanded the case to determine reasonable attorney fees for the plaintiff.

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Court Dismisses Benefit Claims Under the ERISA Antiretaliation Statute.
Benefits Magazine; v51 no7 p 61 Jul 2014; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : The Fifth Circuit Court of Appeals upheld the lower court's grant of summary judgment for the defendant in Parker v. Cooper Tire and Rubber Company. Fired for missing several work days and failing to provide proper notice, the plaintiff sued for wrongful termination to avoid having to pay medical costs and for violating ERISA Section 510 on retaliation. The district court found the plaintiff did not establish a case showing specific intent to interfere with his benefits since the plaintiff had never applied for long-term disability benefits. The Appeals Court agreed and noted no retaliation claim could be based on the short-term disability benefit plan since it was not an ERISA plan. The court also noted the plaintiff could not establish a prima facie ERISA retaliation case since he was physically unqualified to perform his job.

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Disability Insurance Benefits Impact Employees' Financial Outlook.
Owenby, Matthew; Employee Benefit Plan Review; v69 no1 pp 14-15 Jul 2014; journal article

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Abstract : Being unable to work for a year would be financially devastating for nine in ten households, according to America's Health Insurance Plans, but voluntary disability insurance can provide a financial safety net. Offering disability insurance as an option has little monetary effect on an employer but serves as a competitive advantage with employees. While few employees think much about disability, the Social Security Administration reports that one in four 20-year olds will become disabled before retirement age, most likely from a chronic illness. Disability insurance pays cash benefits for costs not covered by major medical insurance, including living expenses such as mortgage and other necessary payments. It also delivers fast and reliable coverage not provided through workers compensation of Social Security Disability.