Articles

Long-COVID and Long-Term Disability Benefits

Jennifer E. Johnsen | FDCC’s Friday 5 Things to Know, August 11, 2023, Issue 184

More than three years after the World Health Organization declared COVID-19 a pandemic, the United States District Court for the Western District of Washington has held that an employee suffering from what has been termed “long-COVID” is entitled to receive long-term disability (LTD)  under a group LTD policy. Abrams v. Unum Life Insurance Company of america, No. C21-0980 TSZ, 2022 WL 17960616 (W.D. Wash. Dec. 27, 2022). This appears to be one of the first reported decisions addressing disability based on this new condition – and, of import to this group – the case involves an LTD claim filed by a shareholder in a law firm.

Background

In April 2020, a trial and appellate partner at a law firm began to experience daily fevers, severe fatigue, and mental fogginess. Prior to that time, he was an accomplished, experienced trial attorney who enjoyed an active lifestyle which included running marathons. In fact, he planned to participate in three marathons in 2020. His symptoms, however, resulted in a significant decline in his legal abilities, a fact substantiated by his former colleague at the firm who noted he could not continue to perform as a lawyer and it was unclear to her that he was able to understand the information conveyed to him. After his doctors were unable to effectively treat his symptoms, he filed a claim for long-term disability benefits under the firm’s group LTD policy.

To qualify as disabled under the policy, he had to establish he was (1) limited from performing the material and substantial duties of his regular occupation due to sickness or injury; (2) had experienced a 20% or more loss in indexed monthly earnings; and (3) during the 90-day elimination period, was unable to perform any of the material and substantial duties of his regular occupation. The insurer denied the claim because the medical records indicated he was fever-free and his clinical exams did not show mental fogginess during the 90-day elimination period.

Plaintiff appealed the decision. In support of his appeal, he was evaluated by numerous physicians — three who diagnosed him with “long-COVID,” four who diagnosed him with Chronic Fatigue Syndrome, and a neuropsychologist who did not find evidence of cognitive impairment (and, in fact, found him to have above-average cognitive ability) yet determined he was not malingering. Unconvinced by this new information, the insurer denied the appeal, upholding its prior denial of the claim. In doing so, it relied on his unremarkable mental status and physical exam findings. Plaintiff then filed an  action for benefits under the Employee Retirement Income Security Act of 1974 (ERISA)

The Decision

Applying a de novo standard of review, the court held that the employee was entitled to LTD benefits, but determined the insurer did not act in bad faith when it denied the claim. In reaching its decision, the court acknowledged that the burden of proof was on Plaintiff to show he was unable to perform the material and substantial duties of his regular occupation. The court examined the occupation of a trial attorney, noting that “trial practice requires a high-level of cognitive work,” “takes a physical toll,” requires  trial lawyers to “analyze complex issues . . . make court appearances . . . often work 15-hour days. . . and travel extensively.” Id. at 3. The court further explained that “[b]eing a trial lawyer is akin to writing, directing, producing, and starring in a play simultaneously. The work is mentally and physically grueling. A reviewer must take that complexity into account when reviewing a claim.” Id.

The court found that the employee was unable to perform the material and substantial duties of his occupation throughout the elimination period and to the present. It noted that although his physicians did not agree on the cause of his symptoms, all agreed he was sick and his primary physician stated it was inconceivable that he could work in any job in any capacity. Id.  at 4. It also noted that since April 2020,  Plaintiff had not worked, had exhausted his savings, sold his house, drawn on retirement savings for daily life, remained housebound and unemployed. Id. The court was persuaded that if Plaintiff could work, he would have done so prior to selling his home and exhausting his savings.

The insurer argued that the diagnoses proposed by Plaintiff’s physicians were incorrect. Id. Although the court agreed that may be the case, it determined that the lack of a proper diagnosis did not mean Plaintiff was not sick. It stated “[i]f Plaintiff cannot follow movie plots . . . and suffers daily fevers . . . then Plaintiff cannot be expected to plan out trial strategies for multiple, complex cases.” Id.

As for the bad faith claim, the court determined that the evidence of disability was not overwhelming and the insurer’s denial was supported by “multiple pieces of relevant evidence.” Id. Therefore, it did not act in bad faith.

Conclusion

It will be interesting to see how these types of claims evolve as they become more and more prevalent. Physicians undoubtedly will become more seasoned at diagnosing the condition and insurers and plan administrators will become more knowledgeable about the symptoms and type of evidence required for claimants to meet their burden depending on the nature of their occupation. Further, because this condition manifests primarily through subjective symptoms, it may be one that insurers seek to add to the list of conditions subject to a subjective symptoms limitation which puts a cap on recovery.  For now, this case provides a loose roadmap for claimants with “long-COVID” and insurers responsible for adjudicating “long-COVID” claims.