If you ever looked at your employer-provided ERISA group disability insurance policy, you may go cross-eyed trying to read the blocks and blocks of little words that blur together. Unfortunately, if you ever find yourself with a debilitating condition preventing you from working, those blurry blocks of words become extremely important.
The crucial determination in whether you qualify for benefits is whether you are “disabled” as defined in your policy. Not all ERISA disability insurance policies define “disability” the same way. Policies vary and the term can be defined in several provisions in the policy. Your policy could contain some or all of the following provisions:
“Own Occupation” Total Disability Provision
Own occupation: The better ERISA group disability insurance policies define “disability” as the inability to perform the “material duties” of your “own occupation” or your “regular occupation.” This definition often applies for an initial period of disability only, after which the stricter “any occupation” standard discussed below applies.
The definition of “own occupation” or “regular occupation” differs from policy to policy.
Some policies define it as the occupation you were doing when you became disabled as that occupation is normally performed in the national economy, not as you performed it. The insurer may reference the Department of Labor’s Dictionary of Occupational Titles to determine what duties are generally performed for your type of work.
Still other policies define “own occupation” as your particular job or the occupation you were doing when you became disabled as you actually performed it. In this case, the insurer will look at how you and your employer describe the material duties of your job to determine whether you are disabled from doing it.
This distinction can be significant if your job is more demanding than the national standard. Under the first definition, you could be unable to do your job and still not qualify for benefits, while under the second, you would qualify.
Material duties: ERISA long term disability policies typically provide that you must be unable to perform the substantial and material duties of your own occupation. Material duties are usually defined as those normally required for an occupation that cannot reasonably be modified or eliminated. There are a number of variations on this wording such as the inability to perform “all material duties,” or the “important duties,” or the “essential duties,” and so forth.
This definition sounds as though you must be unable to do every single material duty of your job to be disabled. But, in practice, this isn’t required. If it were, almost no one would ever qualify as disabled. Arguably, you could be considered totally disabled so long as you can no longer perform even one essential duty if that duty is the main thing you are paid for.
“Any Occupation” Total Disability Provision
Many ERISA group disability policies define disability as the inability to do “any occupation.” Other policies that being with an “own occupation” standard often switch to “any occupation” after 24 months. Thus, if after 24 months, you are able to perform duties of “any occupation” (as opposed to your own occupation), your benefits will terminate.
“Any occupation” policies don’t require you to literally be unable to do any job. “Any occupation” is typically defined as any “gainful occupation in which you might reasonably be expected to engage in light of your station, your physical and mental capacity, and your education, training, and experience.” Thus, if you were previously working in a highly skilled job for a substantial salary and you can now do only unskilled, low paid work, you are probably disabled. Moreover, many policies provide that an occupation is “gainful” only if you are paid at least 50% or 60% of your pre-disability income.
Insurers commonly misapply this definition. The insurer must consider the job market for your services when determining if you are totally disabled. If employers are unwilling to hire you with your disability, then the lack of employment prospects should be evidence of your disability.
Residual/Partial Disability Provision
Some ERISA group disability insurance policies contain a residual/partial disability provision. This provision may entitle you to benefits if you are not totally disabled and can perform “one or more” of the substantial duties of your employment. Its purpose is to protect you from loss of income rather than the inability to work. “Residual” or “partial” disability is typically defined in terms of the percentage of the duties of your job you are able to perform and the percentage of your lost earnings.
Limitations and Exclusions
A policy’s definition of “disability” may also exclude certain conditions or limit the time you are able to collect benefits for specific conditions. Generally, if your condition is based upon your self-reported symptoms, such as chronic headaches, fibromyalgia, depression, anxiety, chronic fatigue syndrome, or other mental or nervous disorders, then your disability insurance policy may limit your benefits to 24 to 36 months. The same limitation may apply to conditions involving substance abuse or pre-existing conditions or diseases.
The experienced ERISA disability insurance attorneys at Uscher, Quiat, Uscher & Russo, P.C. can help you understand the provisions in your policy and assist you with preparing your application for ERISA disability benefits. Call us at 1-800-797-5575.