PANDEMIC PULSE

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Long COVID Patients Bring ERISA Lawsuits to Secure Disability Benefits

American employers have experienced troubling economic consequences of the coronavirus pandemic as many of their employees have become newly disabled by long COVID. In turn, some employees with long COVID have relied on the Employee Retirement Income Security Act of 1974 (ERISA) to obtain the benefits they are entitled to under their employers’ benefit plans. ERISA sets minimum standards for employer-funded benefit plans to provide protections for employees covered by these plans. Notably, ERISA requires plans to establish procedures that allow plan participants to appeal adverse benefit determinations and the wrongful denial of benefits. When a plan participant has exhausted their plan’s internal procedures for appealing an adverse benefit determination, ERISA empowers them to file a lawsuit against the benefits administrator, which provides an opportunity for their benefits eligibility to be reviewed in federal court. Specifically, Sec. 502(a)(1)(B) of ERISA “permits a plan participant to bring a civil action to recover benefits due under the terms of the plan, to enforce rights under the terms of a plan, and/or to clarify rights to future benefits under the terms of a plan.” Some employees with long COVID have invoked these protections to secure their eligibility for short-term and long-term disability insurance benefits after their plan administrator wrongfully denied them. These ERISA actions have culminated with the recent settlement in Haut v. Reliance Standard Life Insurance Company in June 2022.

Haut v. Reliance Standard Life Insurance Company

On January 12, 2022, Wendy Haut brought a federal lawsuit in the U.S. District Court for the Central District of California against her disability benefits administrator after she was denied eligibility for long-term disability benefits. The plan administrator denied Ms. Haut’s eligibility for long-term disability benefits because it determined that the plaintiff’s long COVID symptoms did not satisfy the plan’s definition of disability, even though several health care practitioners provided letters of support that articulated the extent of her disability. Ms. Haut’s disability benefit plan was governed by ERISA, which allowed her to file this lawsuit for the wrongful denial of benefits after she exhausted her internal appeals under the plan.

Ms. Haut’s long COVID symptoms included severe digestive complications, cognitive dysfunction, word-finding difficulties, confusion, balance difficulty, incontinence, memory loss, brain fog, difficulty multi-tasking, and loss of attention and concentration. Ms. Haut’s neurologist suggested that she could not work and that it was medically necessary to be on short-term disability. Months later, her symptoms made it impossible to do her job and her neurologist encouraged her to stop working and apply for long-term disability benefits. Subsequently, Ms. Haut received denial of her long-term disability benefits. She appealed with additional medical documentation, but her appeal was denied, which exhausted her administrative remedies.

Ms. Haut’s long COVID symptoms included severe digestive complications, cognitive dysfunction, word-finding difficulties, confusion, balance difficulty, incontinence, memory loss, brain fog, difficulty multi-tasking, and loss of attention and concentration.

At issue in this case was the long-term disability insurance plan’s definition of “total disability,” which is defined:

for the first 24 months for which a monthly benefit is payable, an insured cannot perform the material duties of their regular job, after a monthly benefit has been paid for 24 months, an insured cannot perform the material duties of any occupation.

In her complaint, Ms. Haut provided medical documentation from her care team that substantiated her long COVID symptoms and how they prevented her from working. Ms. Haut argued that her symptoms satisfied the plan’s definition of “total disability,” which would entitle her to long-term disability benefits. After several months, the parties reached a settlement agreement on Jun 24, 2022. This settlement resulted in the insurance company reinstating Ms. Haut’s claim for long-term disability benefits and providing full payment of the unpaid benefits she was owed. This settlement demonstrates how the symptoms of long COVID can qualify for coverage under long-term disability insurance policies by satisfying their more stringent definitions of disability. Additionally, this settlement provides hope to other employees with long COVID who are struggling to secure eligibility for these critical benefits.

Many other similar lawsuits have been filed by plaintiffs who are also experiencing debilitating symptoms of long COVID, but they have not yet reached their conclusion.

Sekar v. Guardian Life Insurance Company

On January 19, 2022, Anisha Sekar filed a federal lawsuit in the U.S. District Court for the Northern District of California against Guardian Life Insurance Company after they rescinded her short-term disability benefits and refused to review her eligibility for long-term benefits. The plaintiff, Ms. Sekar, worked as a product manager and participated in her company’s disability insurance plan through the Guardian Life Insurance Company. Ms. Sekar contracted COVID-19 in 2020 and experienced severe symptoms, including shortness of breath, chest pain, sore throat, brain fog, and fatigue, which she initially recovered from. However, her symptoms returned months later. Due to the severity of these symptoms, Ms. Sekar did not have enough energy to care for herself and took medical leave from her job.

After returning to work part-time later that year, Ms. Sekar’s symptoms again worsened, and she was diagnosed with long COVID. Ms. Sekar filed a claim for short-term disability insurance benefits and her eligibility was initially approved. After she had been on short-term disability for several months, Ms. Sekar filed a claim for long-term disability insurance benefits. During Guardian’s review of Ms. Sekar’s long-term disability insurance claim, Guardian’s nurse case manager determined that Ms. Sekar’s medical information on file did not support a significant level of impairment. Subsequently, Guardian denied Ms. Sekar’s long-term disability claim and her short-term disability benefits were scheduled to be discontinued.

Ms. Sekar filed an appeal along with substantial medical evidence to support her disability claim. This appeal included medical documentation from her treating physician, which detailed her persistent neurological symptoms and how they limit her ability to work. Additionally, Ms. Sekar’s physician noted that her condition had deteriorated while she was attempting to maintain part-time employment. At Guardian’s request, Ms. Sekar also provided documentation from her treating therapist and psychiatrist, alongside a cognitive assessment and her medical records from the Stanford ME/CFS clinic. 

This specialist noted that cognitive impairment is outside of his expertise but, nevertheless, determined that Ms. Sekar’s persistent neurological symptoms did not prevent her from working.

To review her appeal, Guardian selected an internal medicine and occupational medicine specialist who disagreed with the treating physician’s clinical conclusions about Ms. Sekar’s functional limitations. This specialist noted that cognitive impairment is outside of his expertise but, nevertheless, determined that Ms. Sekar’s persistent neurological symptoms did not prevent her from working. Guardian relied on this specialist’s uninformed conclusions to uphold its termination of Ms. Sekar’s short-term disability benefits and its denial of Ms. Sekar’s long-term disability benefits. At this point, Ms. Sekar exhausted her administrative internal appeals under the terms of her benefit plan and brought this lawsuit against Guardian under Sec. 502(a)(1)(B) of ERISA. The parties have agreed to participate in private mediation by July 18, 2022, which may result in a settlement.

Mathews v. Life Insurance Company of North America

On April 26, 2022, Julie Mathews filed a federal lawsuit in the U.S. District Court for the Western District of Washington against the Life Insurance Company of North America after they refused to approve her eligibility for long-term disability benefits. At the time, Ms. Mathews worked as a software developer for Accenture and the Life Insurance Company of North America administered her workplace disability benefits. Ms. Mathews was diagnosed with COVID-19 in March 2020 when she was five months pregnant. Shortly after being exposed to COVID-19, Ms. Mathews took maternity leave. However, long-term symptoms of COVID-19, including pulmonary issues and liver enzyme complications, prevented Ms. Mathews from returning to work and she applied for short-term disability benefits on October 8, 2020.

The Life Insurance Company of North America approved Ms. Mathews’ short-term disability benefits because her symptoms prevented her from performing the essential functions of her position. Ms. Mathews continued receiving short-term disability benefits through April 2021, which is when their six-month duration concluded. At this time, the Life Insurance Company of North America reviewed Ms. Mathews’ claim for long-term disability benefits, which they denied on August 3, 2021, claiming that her medical records did not adequately support her medical restrictions and limitations.

Ms. Mathews supplied additional medical records to her insurance company, but her claim was again denied on November 3, 2021. Ms. Mathews alleges that the denial letter she received on November 3 erroneously referred to the denial letter she received on August 3 for the justification of its more recent adverse determination. Ms. Mathews also claims that the denial letter on November 3 failed to properly inform her about the next steps available to her if she wished to appeal the decision. Ms. Mathews appealed this adverse determination on January 18, 2022.

In her complaint, Ms. Mathews claims that she is experiencing several non-specific symptoms of long COVID, which she will need to articulate more clearly to convince the court that her condition is disabling enough to prevent her from returning to work.

ERISA requires benefits administrators to issue a decision on an appeal within 45 days of receiving it. Ms. Mathews claims that the Life Insurance Company of North America failed to comply with this requirement. Further, Ms. Mathews claims that the insurance company has not responded to any of her repeated inquiries about the status of her appeal. Ms. Mathews appeal is presumed to be denied, which represents the exhaustion of her administrative remedies under her disability insurance policy.

Ms. Mathews brought this lawsuit against the Life Insurance Company of North America under Sec. 502(a)(1)(B) of ERISA. Ms. Mathews may have a strong claim to recover payment of long-term disability benefits. However, the court will look closely at Ms. Mathews medical record to determine whether she truly meets her long-term disability plan’s definition of disability. In her complaint, Ms. Mathews claims that she is experiencing several non-specific symptoms of long COVID, which she will need to articulate more clearly to convince the court that her condition is disabling enough to prevent her from returning to work.

Rosas v. Reliance Standard Life Insurance Company

On May 13, 2022, Amy Rosas filed a federal lawsuit in the U.S. District Court for the Western District of Washington against Reliance Standard Life Insurance Company after they denied her claims for short-term and long-term disability benefits. Ms. Rosas worked as a highly skilled Senior Technical Project Manager for Expedia, Inc. and she with COVID-19 and pneumonia in February 2020. Ms. Rosas became disabled on June 29, 2020, and by December 2020 her long-term symptoms included brain fog, memory recall issues, dizziness, blood pressure dysfunction, severe fatigue, double vision, joint and chest pain, and photosensitivity. These symptoms prevented Ms. Rosas from keeping up with the demands of her job. Ms. Rosas applied for short-term disability benefits through Reliance Standard Life Insurance Company, but her claim was initially denied.

Ms. Rosas appealed the insurance company’s decision and simultaneously filed a claim for long-term disability benefits. On January 4, 2021, the insurance company denied Ms. Rosas’ claim for long-term disability benefits on the grounds that her symptoms were not severe enough to prevent her performing her job. Ms. Rosas alleges that the denial letter from January 4 failed to communicate the specific information that was missing from her claim. Ms. Rosas appealed this adverse determination on July 2, 2021 and submitted additional medical records to the insurance company to demonstrate that she satisfies the plan’s definition of “totally disabled.” Between July and November of 2021, several physician consultants and specialists reviewed Ms. Rosas’ claim on behalf of the insurance company. However, Ms. Rosas asserts that these reviews are unreliable because the reviewers are inherently biased in favor of the insurance company, the reviewers failed to consider the nature of her condition, the reviewers were unqualified to comment on her condition, and the reviewers formulated clinical conclusions about her condition without examining her in-person. Ms. Rosas also asserts that the insurance company failed to provide the results of several other clinical reviews that were conducted by specialists who were more qualified to comment on her condition.

Ms. Rosas also asserts that the insurance company failed to provide the results of several other clinical reviews that were conducted by specialists who were more qualified to comment on her condition.

On February 14, 2022, Ms. Rosas’ claim for short-term disability benefits was approved. However, the insurance company declined to overturn its decision for denying Ms. Rosas’ claim for long-term disability benefits. At this point, Ms. Rosas exhausted her administrative remedies and brought this lawsuit to seek judicial review of her claim for long-term disability benefits under Sec. 501(a)(1)(B) of ERISA. Based on the outcome of Haut v. Reliance Standard Life Insurance Company, Ms. Rosas may be able to secure her long-term disability benefits through a similar settlement. Both Ms. Haut and Ms. Rosas provided substantial medical documentation to support their claims for disability benefits, which establishes a persuasive record of their functional impairment.

Conclusion

The settlement in Haut v. Reliance Standard Life Insurance Company signals that insurance companies will more readily pay claims for short-term and long-term disability claims related to long COVID when the employee’s symptoms are supported by multiple medical professionals and when the employee can draw a direct connection between their symptoms and their inability to fulfill their job responsibilities. Employees with long COVID who are seeking eligibility for workplace disability benefits should make every effort to provide comprehensive medical records that clearly establish their disabling symptoms and evidence that demonstrates how their medical condition directly limits their ability to satisfy the functional requirements of their position. These factors will heavily influence the outcome of any lawsuit contesting an individual’s eligibility for workplace disability benefits.

J.B. Asked: Can I Appeal a Disability Insurer’s Medical Review?

“I have long COVID and I recently filed a claim for disability insurance benefits through my workplace disability policy. The insurance company relied on a clinician’s review of my medical records to deny my claim. The clinician is employed by the insurance company, they never examined me in-person, and they do not specialize in a field of medicine relevant to my long COVID symptoms. Can I appeal the insurance company’s decision?”

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