Recovering LTD Benefits During the Own Occupation Period

Yes, for at least the first 30 months of disability.

Long Term Disability (“LTD”) Plans entitle an employee to a monthly benefit if she becomes “Disabled” while insured under the Plan. “Disability or Disabled” normally means that for the first 180 consecutive days the employee is prevented from performing one or more of the “Essential Duties” of the employee’s occupation. This is known as the “Elimination Period”.
After the Elimination Period, LTD Plans commonly provide a 24-month “Own Occupation Period” of benefits when the employee is prevented from performing one or more of the Essential Duties of the employee’s own occupation causing the employee to earn less than 80% of their normal monthly earnings.
As reflected in a recent court decision, “Own Occupation” was defined by the carrier as “any employment, trade, or profession that is substantially similar in terms of tasks, functions, skills, abilities, knowledge, training and experience, required by Employers from those engaged in a particular occupation in the general labor market in the national economy.” However, a person’s own occupation is “not defined with reference to a specific Employer or specific location or particular work environment.” Treslley v. Guardian Life Ins. of Am., No. 22-cv-494-wmc, 2024 BL 23605, at *2 (W.D. Wis. Jan. 24, 2024).
After the 24-month Own Occupation Period is completed, most LTD Plans provide for continuing benefits under a “Any Occupation” provision if the employee is unable to perform the “Essential Duties” of “Any Occupation” that they are otherwise qualified to perform. LTD Plans normally define “Any Occupation” to include “any occupation for which [the employee] is qualified by education, training or experience, and that has [comparable] earnings potential. See, Sieg v. Hartford Life & Accident Ins., 597 F. Supp. 3d 1287, 1290 (E.D. Wis. 2022). An LTD Plan’s typical definition for “Essential Duty” is “a duty that: 1. is substantial, not incidental; 2. is fundamental or inherent to the occupation; and 3. cannot be reasonably omitted or changed.” Attending work for the number of hours in a regularly scheduled workweek is an Essential Duty. Id.
ERISA litigation commonly arises when the employee has completed their two-year Own Occupation period and the LTD insurance carrier terminates benefits for failure to satisfy the higher threshold of proof under the Any Occupation provision. When considering the employee’s education, training and experience in a pre-disability physically demanding role, for example, the LTD carrier may look at national statistics (not actual job openings or statistics from the local economy) to determine that there are sedentary jobs that the employee could perform. However, such replacement jobs must provide comparable pay, terms, and conditions of employment.
            With an eye toward the Any Occupation period and potential ERISA litigation, a disabled employee should continue developing their proof of loss. “Proof of loss” language is standard insurance contract language. Postma v. Paul Revere Life Ins. Co., 223 F.3d 533, 539 (7th Cir. 2000), citing Herzberger v. Standard Ins. Co., 205 F.3d 327, 332 (7th Cir. 2000). ERISA and its regulations require plans to provide certain presuit procedures for reviewing claims after participants submit proof of loss (internal review). See Heimeshoff v. Hartford Life & Acc. Ins. Co., 571 U.S. 99, 105, 134 S. Ct. 604, 187 L. Ed. 2d 529 (2013). Proof of loss is established through medical records, employment records, day-in-the-life affidavits by the employee and immediately family members. The most critical form of proof of loss is objective medical evidence in contrast to subjective complaints by the employee to their physician. Such objective medical evidence is secured through testing, examination, and detailed reporting.