This article was published in the Chicago Daily Law Bulletin on August 3, 2015.
By Mark D. DeBofsky
Mark D. DeBofsky is a name partner of DeBofsky, Sherman & Casciari, PC. He handles civil and appellate litigation involving employee benefits, disability insurance and other insurance claims and coverage, and Social Security law. He can be reached at email@example.com.
To qualify for Social Security disability benefits, a claimant must prove an inability to engage in "any" meaningful work, a standard considered extremely difficult to meet. However, as a recent case shows, the FedEx disability benefit plan imposes qualification standards that are even harder than Social Security's.
In Oliver v. Aetna Life Insurance Co., 2015 WL 4153628 (11th Cir., July 10) (unpublished), the 11th U.S. Circuit Court of Appeals ruled that although Greg Oliver unquestionably suffered from severe knee and back problems that were sufficient to qualify him for Social Security disability benefits, he failed to meet the FedEx test.
Oliver had been a courier for FedEx for many years until he had to cease working on account of severe arthritis in his knees and lower back. Although Oliver subsequently received short-term and then long-term disability benefits from FedEx for 24 months, he was denied additional benefits, which required his "complete inability ... to engage in any compensable employment for 25 hours per week."
Despite Oliver's SSDI award, the court contrasted the definition of "disability" under the Social Security Administration's system and under the FedEx plan, and concluded that the SSDI finding was not dispositive. The court highlighted the differences between the two:
"First, the SSA test categorizes as disabled one who cannot perform 'substantial gainful activity.' Under the plan, however, total disability means 'the complete inability ... to engage in any compensable employment for 25 hours per week.' Thus, the plan imposes a higher standard upon a claimant.
"Second, the fifth step of the SSA test precludes a finding of disability, even for a person able to perform work, unless the SSA commissioner can prove the existence of jobs, in significant numbers, that the claimant can do, given not only his impairment, but also his age, education and work experience. In contrast, the plan does not take the availability of jobs into consideration.
"Third, the SSA test, as interpreted by this circuit, recognizes that 'pain alone can be disabling, even when its existence is unsupported by objective evidence.' Francis v. Heckler, 749 F.2d 1562, 1564 (11th Cir.1985). The plan, by contrast, requires 'significant objective findings ... which can be observed apart from the individual's symptoms.' Or, as Aetna explained to Oliver, 'Pain, without significant objective findings, is not proof of disability.'
"Finally, although a court must give special weight to the opinions of a claimant's treating physician in Social Security cases, the same deference does not apply to disability determinations under employee benefit plans governed by [the Employee Retirement Income Security Act]. Black & Decker Disability Plan v. Nord, 538 U.S. 822, 825 (2003)."
The court found that although Oliver had undergone multiple surgeries, it concluded the evidence was not dispositive in demonstrating that Oliver was incapable of working. The court also determined that Oliver's testimony before the Social Security Administration in which he described daily activities such as helping his children get ready for school; attending classes, church and sporting events' driving a car up to 25 miles a week; walking short distances; and participating in physical therapy was "consistent with many part-time, fairly sedentary jobs." Also, the court was influenced by Social Security's finding that medical improvement was expected with further treatment.
While there are indeed some differences between the Social Security criteria for disability and the FedEx plan, there was no indication in the opinion that any of the differences listed were material to the Social Security decision. Nor are the distinctions between the two programs as significant as the court made out, especially since earnings from working for 25 hours a week, even at a minimum wage job, are even less than the amount of earnings that Social Security disability recipients are allowed to receive (approximately $1,000 per month) and still qualify for benefits, which are set forth in 20 C.F.R. Section 404.1574.
But even someone who could earn a minimum wage for 25 hours per week ($7.25 times 25 equals $181.25) would have insufficient earnings to stave off poverty since annual earnings at that level would be $9,425, which is well below the recognized poverty level of $24,250 for a family of four.
The whole purpose of a disability insurance benefit is to prevent destitution in the event that sickness or injury prevents a worker from engaging in employment, a point the 11th Circuit recognized in an earlier ruling, Helms v. Monsanto Company Inc., 728 F.2d 1416 (11th Cir. 1984). Like the FedEx plan, the Monsanto plan provided benefits only if the employee was "totally disabled and continues to be totally disabled by reason of bodily injury or disease so as to be prevented thereby from engaging in any occupation or employment for remuneration or profit."
However, the court rejected a literal reading of that language which would have provided benefits only if "the affected individual [were] utterly helpless." The court ruled that the plan's language had to be read in light of the congressional intent underlying ERISA, "that those who participate in the plans actually receive the benefits they are entitled to and do not lose these as a result of unduly restrictive provisions or lack of sufficient funds."
Accordingly, the court disallowed a "strict, literal construction of such a provision which would deny benefits to the disabled if he should engage in some minimal occupation, such as selling peanuts or pencils, which would yield only a pittance."
Nor would Oliver's expected medical improvement be a valid basis to deny benefits, since the FedEx plan could deny benefits in the future if Oliver's condition improved rather than refusing benefits altogether based on speculation that his condition would improve. And the type of everyday activities Oliver performs are hardly indicative of an ability to work according to Gentle v. Barnhart, 430 F.3d 865 (7th Cir. 2005), which found that child care and the ability to perform routine household chores do not equate to an ability to work.
If employers are going to get credit with their employees for offering benefits, those benefits should be meaningful and provide protection in time of need.