Lonnie Roach, partner at Bemis, Roach & Reed recently obtained an important decision from The United States Court of Appeals for the Fifth Circuit which will likely have a far-reaching and favorable impact for anyone receiving Long Term Disability (LTD) benefits under Plans governed by the Employee Retirement Income Security Act of 1974 (“ERISA”). In Case no. 14-50368; Robert George v. Reliance Standard Life Insurance Company, decided on January 15, 2015, the Court set out guidelines for interpreting LTD insurance policies or ERISA Plans that provide full disability benefits for claimants disabled due to physical injuries or sickness, but only limited benefits for disabilities “caused or contributed to by” mental illness or any mental/nervous condition.
Many LTD insurance policies limit the duration of disability benefits to only 24 months for disability caused or contributed to by any mental or nervous condition, such as depression. Many, if not most chronically ill claimants suffering from a physically disabling condition eventually also receive a diagnosis of depression. Their depression did not make them sick, however—they are depressed because they are sick. This does not stop some LTD insurance carriers from using the depression diagnosis to limit benefits to only 24 months.
This is exactly what happened to Bemis, Roach & Reed client Robert George. After suffering severe injuries in a helicopter crash, Mr. George was forced to retire from the U.S. Army and went to work for a private company where he continued to work as a pilot for 20 years until declining health from the many injuries he suffered in the crash forced him to stop working. Being physically disabled and unable to work, Mr. George became increasingly depressed. Despite the fact that the purely physical damages forced him to stop flying, his LTD insurance company, Reliance Standard Life Insurance Company denied his disability claim after 2 years claiming, in part, that Mr. George’s depression “contributed” to his disability. A federal trial judge agreed with Reliance Standard’s reasoning.
Bemis, Roach & Reed appealed to the Fifth Circuit Court of Appeals where Partner, Lonnie Roach won a reversal that not only restored benefits to Mr. George, it adopted Mr. Roach’s interpretation of the insurance policy requirements. As a result, the Court established a new rule for interpreting these policy provisions. The Fifth Circuit ruled that no mental/nervous condition “contributed” to Mr. George’s disability because even without his diagnosis of depression, Mr. George would still be disabled due to solely physical causes.
Given how common it is for disabled individuals to suffer from both physical and mental/emotional/nervous conditions, George v. Reliance Standard will likely have a profound impact on the future construction of these common insurance clauses and will be a valuable tool for those claimants whose disability benefits are denied after 24 months.
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