Disability Benefits


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

No More Half Measures: A Case-Based Approach for Addressing FMLA Abuse.
Connell, Dana S.; Employee Relations Law Journal; v39 no4 pp 3-23 Spring 2014; journal article

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Abstract : Employers struggle to find ways to effectively address employee abuse of rights under the Family and Medical Leave Act (FMLA), and solutions provided in the law fall short. Most FMLA abuse in case law stems from an employee's working a second job on the side whether or not there is a written policy prohibiting it, engaging in manual labor, running errands, engaging in social or recreational activities, taking a pleasure trip or failing to care for a family member during care-related leave. Courts generally support investigations when the employer has an honest belief the employee is engaging in any of these situations and typically grant summary judgment with evidence. Case law shows the value of clear leave policies, recognize surveillance and other methods of gathering evidence of abuse and support employers' investigations of suspicious employee behavior patterns.

Pension Benefits Are Not Deductible From LTD Payments.
Plans & Trusts; v32 no2 pp 30-31 Mar-Apr 2014; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : The Ontario Supreme Court of Justice ruled in Timmins and District Hospital v. Ontario Nurses' Association that the employer plaintiff may not reduce long-term disability (LTD) benefit payments to offset hypothetical retirement disability payments. The Nurses' Association filed a grievance on behalf of a member receiving LTD payments under a plan which would deduct other available benefit amounts, including disability pension payments. The member faced the choice to remain employed but delay pension benefits or end employment and start a disability pension with no further pension benefit accrual or health benefits. The court upheld an arbitrator's decision that the disability pension was not available to be deducted as Canada Pension Plan or workers compensation benefits might be, since it would force the member to lose significant health benefits which she required.

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Plan Administrator's Denial of Benefits Not Reasonable Under Terms of Plan.
Benefits Magazine; v51 no3 pp 53-54 Mar 2014; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : The Seventh Circuit Appeals Court reversed the lower court's support for the defendant in Cerentano v. UMWA Health & Retirement Funds. The plan administrator rejected disability benefits for a coal miner who, over 22 years of employment, suffered several mining accidents and awards of permanent partial disability. The plaintiff was wrongfully discharged for a false positive drug test. Five years later after additional injuries from a car accident, he was awarded Social Security benefits due to limited functioning as a result of the cumulative injuries. He then filed for disability pension benefits but was denied. The Seventh Circuit found the plan trustees' analysis of the claim to be insufficient and rejected the lower court's reasoning that there was no causal link between the plaintiff's injuries on the job and his disability.

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Plan Language Insufficient to Warrant Discretionary Review.
Benefits Magazine; v51 no3 pp 56-57 Mar 2014; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : After first being approved for short-term disability benefits, the plaintiff in Cosey v. Prudential Insurance Company of America had benefits terminated for insufficient evidence of disability, and she was then discharged. She filed suit to recover short- and long-term benefits, was rehired two months later and settled the disability claims. The next year she again filed for disability, first being approved but then failing to submit timely additional medical evidence, leading to her discharge. The district court ruled termination of benefits was not an abuse of the plan administrator's discretion. The Fourth Circuit Appeals Court noted discretionary authority for the administrator was not specified in the plan documents and language about satisfactory evidence was ambiguous, ruling ambiguities must be construed to favor the participants. The abuse of discretion standard of review was rejected and a de novo review used for both disability plans. The appeals court remanded to district court for further review de novo.

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5 Myths of ADAAA Compliance.
Johnson, Sandy; Bleeker, Alycia; Benefits Magazine; v51 no2 pp 40-44 Feb 2014; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Among the many misconceptions about the Americans with Disabilities Act Amendments Act (ADAAA), the most common may be that accommodating disabled employees is costly. Most often, providing the devices or training or working with a consultant to facilitate accommodations to help a worker return to productivity is less expensive than legal action. A flexible response to an employee's needs will not necessarily threaten norms and procedures, and strict enforcement of policies in an effort to be unbiased is not always the best strategy and may conflict with the ADAAA. HR managers should be open to help from consultants or disability insurer representatives who can suggest accommodations. They should also anticipate rising requests for accommodations for older employees to support their continued productive work.

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Availability of ERISA Claim for Benefits Precludes Equitable Claim.
Benefits Magazine; v51 no2 p 67 Feb 2014; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : An employee with spinal stenosis continued working but later underwent surgery for a spinal tumor. She received short-term and then long-term disability benefits until they were terminated. The plan administrator affirmed the decision, prompting the employee as plaintiff in Lopez v. Liberty Life Assurance Co. of Boston to allege incomplete review of her claim. She sought recovery of disability benefits under ERISA Section 502(a)(1) and other equitable relief under Section 502(a)(3) for alleged unjust enrichment. The District Court for the Southern District of Texas ruled that since a potential remedy through Section 502(a)(1)(B) was available, relief under Section 502(a)(3), termed a catchall remedial Section by the Supreme Court, was not available to the plaintiff. Given the opportunity through Section 502(a)(1)(B), the alternative becomes unavailable even if the plaintiff does not win relief through Section 502(a)(1)(B).

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Disability Benefits Protected by Garnishment Restrictions.
Benefits Magazine; v51 no2 p 66 Feb 2014; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : The Eighth Circuit Appeals Court ruled in U.S. v. Ashcraft that payments received through an employer's disability plan are earnings under the Consumer Credit Protection Act (CCPA) and subject to garnishment. Before the defendant became eligible to receive disability payments, she had been convicted of a crime, imprisoned and required to make restitution. When the government sought to garnish disability benefits as restitution, the district court ruled the payments are not earnings and may be garnished. Analyzing the wording of the statute, the appeals court found the CCPA to include pension payments in earnings, noting the money comes through the former employer and is intended to substitute for wages. The court found the benefits subject to CCPA limitations on garnishment.

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ERISA Plan Can Set, Enforce Its Own Limitations Period, Supreme Court Holds.
Pension Plan Fix-It Handbook; v21 no5 pp 5, 10 Feb 2014; journal article

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Abstract : Without ERISA statutes of limitations for issues other than fiduciary breaches, courts rely on state law, and some plans have written their own limits into plan documents with mixed results. The U.S. Supreme Court upheld a plan's limitation provision as enforceable in Heimsehoff v. Hartford Life & Accident Insurance Co. et al. The plaintiff filed suit over a disability claim more than three years after a proof of loss was due according to plan terms, but less than three years after a final claim denial. The lower court and Second Circuit ruled the claim untimely. The Supreme Court ruled the plan's contractual provision is enforceable if the limitations period is sufficiently long and there is no compelling statute to the contrary. Since the plaintiff had about one year after the administrative review and denial to file suit, and since ERISA is a controlling statute to the contrary, the court found the plan's limitations period to be enforceable.

Fair Play.
Smith, Brooke; Benefits Canada; v38 no2 pp 13-14 Feb 2014; journal article

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Abstract : Under the leadership of Debra Wight, employee health, safety and benefits managers for Richmond Hill, Ontario, sick leave for the town has become more organized, consistent and equitable. Before 2013 the town took an ad hoc approach for extended sick leave and disability, but the generous benefits opened them to abuse and created coverage problems. The town contracted with Morneau Shepell to manage short-term disability, integrating the program with long-term benefits under Sun Life Financial. Group communication changed defensiveness to collective understanding. The new integrated approach focused on case management and recovery with strong communication and personal support. Wight calls any employee off work for ten days and refers him or her to Morneau Shepell for a disability-related absence, and all collaborate on a return-to-work plan when the employee is ready. With the change, sick pay is available to be used appropriately.

The Missing Link.
Allen, Paula; Kelly, Adam; Benefits Canada; v38 no2 pp 21-22, 24 Feb 2014; journal article

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Abstract : The Canadian Mental Health Association has described the circular connection between physical and mental health, in which bodily conditions and mental illness contribute to each other. The Mental Health Commission of Canada released its national standard for psychological health in the workplace in 2013 with a mental health framework employers can implement. Any disability management program must address both mind and body in a holistic and integrated manner to be fully effective, weaving together approaches, benefit and management programs and care providers. While expected challenges rise from building the business case, leadership endorsement and communication and education, specific cases show solutions are readily available. Research shows the advantages of an integrated disability management model range from reduced time off and greater productivity to improved employee satisfaction.

A Step-by-Step Guide to Managing the ADA Interactive Process... and Why You Probably Need It.
Cardi, Marti; Welty, Lori; HR Advisor: Legal & Practical Guidance; v20 no1 pp 27-35 Jan-Feb 2014; journal article

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Abstract : A series of steps is recommended to establish a sound administration process for the interactive process required under the Americans with Disabilities Act (ADA) to reasonably accommodate an employee's disability. These start with clarifying whether the need for an accommodation has been raised and starting the interactive process. The employer must identify the information needed before considering the request, determine whether the employee has a disability and specify the essential elements of the worker's job. Only then can suggested or possible accommodations be considered and judged to be reasonable and effective. The employer can consider a leave or other alternatives as an accommodation but may assess the potential hardship to the business and other implications. The decision about proposed accommodations should be communicated, its effectiveness monitored and the process fully documented.

Court Disputes Plan Administrator's Duty to Investigate.
Benefits Magazine; v51 no1 pp 52-53 Jan 2014; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : In Truitt v. Unum Life Insurance Company of America the plaintiff received long-term disability benefits for pain and lack of mobility. After four years the benefits were discontinued in light of additional medical evidence and surveillance video. The defendant reversed its own decision on appeal after a vocational specialist's review noting the physical demands of the plaintiff's work. An individual claiming a personal relationship with the plaintiff asserted fraud and offered email evidence detailing her travels and physical activity. The plaintiff contended the individual's statements were false but did not rebut the emails. The defendant sought reimbursement for over $1 million in benefits paid. The district court ruled for the plaintiff, finding the defendant's action arbitrary and capricious and without grounds. The Fifth Circuit found the lower court unreasonable in expecting the defendant to go beyond the administrative record to investigate the validity of external information and its source. The court remanded the case to resolve the reimbursement of benefits.

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EEOC Offers Guidance on Accommodations for Diabetic Employees.
Minehan, Maureen; Employment Law Counselor; no281 pp 3-4 Jan 2014; journal article

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Abstract : The Equal Employment Opportunity Commission (EEOC) provided updated guidance on workplace accommodations under the Americans with Disabilities Act Amendments Act for employees with diabetes. Employees, family members or care providers can request accommodations, which may include leave for treatment or patient education, modified work schedules, different seating arrangements or job reassignment. The employer may request documentation that the accommodation is necessary but do not need to provide accommodation that is unreasonably expensive or difficult to arrange. If an employee must take leave, employers can request updates and an anticipated date of return to work.

The Disability Dilemma.
Ramirez, Julie Cook; Human Resource Executive; v27 no1 pp 30-33 Jan-Feb 2014; journal article

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Abstract : Studies by the Disability Management Employer Coalition (DMEC) and the Pacific Resources Benefits Advisors show most benefits decision makers have given little thought to how the Affordable Care Act will affect management of disabled and/or absent employees. Employers must appreciate that disability and absence management are interconnected with medical benefits instead of handling them independently. A third of employers surveyed by DMEC and Pacific Resources expect absence and disability claims to rise as people attend to medical issues. They should also anticipate requests for leave under the Family and Medical Leave Act and Americans with Disabilities Act. Absences may increase as workers seek care from overburdened providers, requiring temporary work coverage by other employees and possibly increasing hours over the 30 hour work week threshold. As employers realize the potential effects of the ACA on disability and absence management, more are turning to outsourcing leave administration.

Workplace Absence: Least Examined Areas of Benefits Program May Be Costly.
Moyer, Holly; Benefits Magazine; v51 no1 pp 38-42 Jan 2014; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : Absenteeism can have more financial impact than health care and other high-cost programs. Implementing a broad absence management strategy can generate significant savings, though it must be done in compliance with a maze of federal and state laws. An absence management program should be solidly based on a proactive plan design, use administrative best practices, incorporate compliance measures and be integrated with benefits such as employee assistance programs and work life initiatives. The program must be carefully developed and communicated clearly to employees and managers. One midsized company with over $1 million in annual absence-related costs is seeing lower absenteeism rates after implementing a well-crafted absence management program, with cost reduction related to disability and medical leave expected to follow.

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Claim for Benefits Dismissed as Untimely.
Benefits Magazine; v50 no12 p 55 Dec 2013; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : The Fifth Circuit Court of Appeals dismissed the plaintiff's claim for disability benefits in McGowan v. New Orleans Employers International Longshoremen's Association, AFL-CIO Pension Fund as beyond the 180-day period allowed for appeals. The plaintiff was injured on the job and qualified for benefits in 2003. Eight years later he was told that benefits would end if he returned to work, and two days after that he received a letter stating his benefits were terminated, and that he could appeal within a certain time following the process in the enclosed summary plan description. The plaintiff contacted the administrator to discuss his intent to appeal and had two attorneys contact the plan, but no formal appeal was made. Benefits were stopped and the district court granted the defendant summary judgment. The Fifth Circuit found the defendant complied with ERISA notification requirements but that the plaintiff failed to request an appeal in writing and within the required time period.

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Contradictory ADA, FMLA Claims Possible, Court Says.
Leave and Disability Coordination Handbook; v17 no2 pp 3,5 Dec 2013; journal article

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Abstract : In Jacqlyn Smith v. Clark County School District, the plaintiff changed from classroom teaching to an alternate position due to a back injury. Years later she sustained a further back injury and applied for Family and Medical Leave Act (FMLA) leave and disability benefits, with an uncertain return to work date. She was then approved for state disability retirement benefits, but still pursued accommodations under the Americans with Disabilities Act (ADA) for a nonteaching position with the employer. When the school district offered a teaching position with accommodations, she resigned and took disability retirement but also sued over denial of her original accommodation request. The district court granted summary judgment for the school district. The Ninth Circuit Court of Appeals reversed, accepting the plaintiff's explanation that she sought FMLA leave for a temporary disability and ADA accommodation by reassignment to a desk job. Since she was able to perform essential job functions and not permanently disabled, her ADA and FMLA claims did not conflict.

Court Reverses Denial of Disability Benefits.
Benefits Magazine; v50 no12 pp 61-62 Dec 2013; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : The plaintiff in Fura v. Federal Express Corporation Long Term Disability Plan underwent a series of back surgeries and received employer-sponsored short term disability (STD) benefits and Social Security disability benefits. To transition from the STD benefits and received benefits under the long-term disability plan the employee had to be totally disabled. The plaintiff submitted his treating physician records documenting his limitations. The plan's reviewing physicians determined the plaintiff was able to work in a sedentary position for 25 hours weekly, so benefits were terminated, despite additional evidence. The district court ruled for the plaintiff. The Sixth Circuit Appeals Court agreed, noting the plan's physicians never examined the plaintiff, did not explain why they disregarded the plaintiff's physician's opinion and did not address the material evidence of the plaintiff's disability. The court remanded the case for further consideration by the defendant.

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Discrimination Against the Minority: A Closer Look at Nonqualified Retirement Plans.
Graham, Jeb; Journal of Pension Benefits; v21 no2 pp 41-46 Winter 2013; journal article

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Abstract : Discounting the relatively few executives with extreme compensation packages, most execs are at a disadvantage for pension, disability and premature death benefits. Common benefit limits are misaligned with actual salaries, creating reverse discrimination for those paid over about $115,000. The solution is a nonqualified retirement plan, such as a top-hat plan, supplemental executive retirement plan, deferred compensation or golden handcuff arrangement. Those based on defined contribution designs enable the executive to defer receiving compensation to a future year. They have advantages for the participant and sponsor and are limited to a select group whose compensation qualifies by the organization's standard. The plans are often funded through corporate owned life insurance though officially unfunded for ERISA. Employers should consider whether benefit designs discriminate against executives and undermine retention and recruitment.

Good Oversight, Communication Musts in Today's Legal Environment.
MacNeill, Kevin; Benefits and Pensions Monitor; v23 no8 pp 38-39 Dec 2013; journal article

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Abstract : Canadian employers are bound by human rights laws to accommodate employees' disabilities. It may be expedient to delegate responsibility for accommodations, but legal cases demonstrate the importance of ongoing oversight, communication and support by the employer to ensure compliance. In Asselstine v. Manufacturers Life Insurance Co. and Hamilton Health Sciences Corp. v. Ontario Nurses Association, the employers outsourced disability plan management, but the external firms' rejection of benefit claims or delay of an employee's return to work led to costly grievances and court rulings. In LeBlanc v. Syncreon and Renfrew County District Health Unit v. Ontario Public Employees Union, Local 642, the service providers failed to process information in a timely manner, but the employers were held responsible for the consequences. Though third parties may be useful for handling cases, employers should monitor all cases frequently and select some for close scrutiny.

LTD Plan Subject to ERISA and De Novo Review.
Benefits Magazine; v50 no12 pp 53-54 Dec 2013; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : The plaintiff in Gross v. Sun Life Assurance Company of Canada was covered by long-term disability (LTD) plan available through the employer but for which employees paid the premiums, while the employer paid premiums on other bundled policy benefits. The plaintiff left her job and applied for but was denied LTD benefits, based on a review by the insurer's physician consultants, despite voluminous evidence from the plaintiff's personal physician. After the district court ruled for the defendant, the First Circuit Appeals Court established that the plan was an ERISA plan and employer funding disqualified it for safe harbor. It then ruled the defendant's review of the medical evidence was based on inconsistent evidence and insufficient video surveillance and remanded the case for further consideration.

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Court Upholds Application of Statute of Limitations.
Benefits Magazine; v50 no11 pp 72, 76 Nov 2013; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : The Sixth Circuit Court of Appeals upheld the lower court's decision in Engleson v. Unum Life Insurance Co. of America, finding the plaintiff's claim was filed well after the statute of limitations. The plaintiff applied for disability benefits in 2001, was denied, appealed and denied again. He resumed work for seven years but stopped again due to his medical condition. He filed for benefits and was approved though his request that his 2001 claim be reconsidered was rejected. The plaintiff sought recovery of denied benefits and equitable relief for lack of a full and fair review of the 2001 claim. The district court dismissed the untimely filing. The Sixth Circuit ruled the administrator was not required to explain rights to federal court review and that details about the time limits for requesting court review were in the plan document. The plaintiff asserted his late case filing was justified since the 2008 benefits determination was flawed, effectively being an adverse determination requiring disclosure of specific reasons, despite application to the 2001 claim. The court rejected this view, found no merit for equitable tolling and dismissed all the plaintiff's claims.

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Disability Benefits in the World of ACA.
Lundquist, Barry; Broker World; v33 no11 pp 46, 48, 62; journal article

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Abstract : The Affordable Care Act (ACA) dominates discussions of health care and does not address income protection through disabling illness or injury. One in four young workers will experience a long-term disability during their work career, but only about a third of the workforce has private disability insurance. While resources and attention are shifted toward health care, other benefits such as disability insurance fade from attention and are increasingly left as voluntary options. Though disability plans were traditionally part of an employer's core benefits, only 40 to 50 percent of workers typically sign on for voluntary benefits. The gap between understanding the risk and low takeup of voluntary benefits raises an important educational need. Providing education about disability risk and consequences can help employees better appreciate benefits that are provided and offered.

Making the Grade.
Rousmaniere, Peter; Risk & Insurance; v24 no11 pp 38, 40 Nov 2013; journal article

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Abstract : The Miami-Dade County Public Schools earned a Teddy Award for workers compensation and disability management because of efforts to deal with excessive charges for drug dispensing and with older workers' comorbidity challenges. The fifth largest public school district in the country, the Miami-Dade system established cost controls through a little used excess policy and a Pharmacy Validation Program through which repackaged drug bills are adjusted to the state fee schedule. Working with the union led to a 13-week salary continuation program preceding standard workers compensation, resulting in uninterrupted union dues payments and the requirement that injured workers actually follow medical advice. A wellness program specifically for bus drivers emphasizes prevention and medical management by addressing their nutrition and health-related issues.

Other Recent Decisions.
Benefits Magazine; v50 no11 pp 75, 77-78 Nov 2013; journal article

Availability : International Foundation of Employee Benefit Plans
Abstract : The plaintiffs in Santomenno v. John Hancock Life Insurance Company alleged the defendant violated fiduciary duty by charging excessive, improperly receiving revenue sharing income and inappropriately offering an investment option that had been fined by the Securities and Exchange Commission. The U.S. District Court for New Jersey ruled the defendant was not an ERISA fiduciary and dismissed all claims. In Davidson v. Henkel Corp., the plaintiff had an ERISA top-hat pension plan and, years after retiring, was informed by the defendant that it would make monthly deductions for FICA taxes it had failed to withhold. The plaintiff filed state law claims of gross negligence and recklessness. The Eastern Michigan District Court dismissed the state law claims as preempted by ERISA but found sufficient facts and justifiable reliance on the plaintiff's part to deny the defendant's motion to dismiss. In West Virginia Laborers' Pension Trust Fund v. Burkhammer, the defendant was the daughter of a deceased pension plan participant, but she continued to receive monthly benefit payments through the account held jointly with her father and did not respond when the plan brought action to collect overpaid funds. The District Court for the Southern District of West Virginia ruled the defendant was personally liable for the $21,460, with interest and attorney fees. In Rashiel Salem Enterprises LLC v. Bunton, the plaintiff employer sought reimbursement for $120,576 placed in error in the account of one of two defendants, a disabled plan beneficiary who was unable to manage finances. The second defendant was a housekeeper who acted as trustee but was imprisoned after depleting the account. The Arizona District Court found the plaintiffs not entitled to equitable relief since no funds remained.

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