Ruling pushes needs of the individual

This article was published in the Chicago Daily Law Bulletin on March 22, 2016.

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 . He can be reached at mdebofsky@debofsky.com.

Most disability benefit claim decisions focus on medical issues and often overlook the equally critical need to perform an accurate vocational evaluation.

The recent case of Mackey v. Liberty Life Assurance Company of Boston, 2016 WL 915271 (W.D. Ark., March 7), is a singular exception.

This case involved Brenda Mackey, a former registered nurse who sought disability benefits after undergoing two knee replacement surgeries that left her with residual nerve damage causing muscle weakness. Although Liberty approved Mackey’s ensuing "own occupation" disability claim, it denied further payments after 24 months when the definition of "disability" shifted to an "any occupation" standard.

The court overturned that decision despite the application of an abuse of discretion standard of review requiring that deference be given to the insurer’s determination.

Although the court found reasonable support for Liberty’s conclusion that the medical evidence showed Mackey could perform a sedentary occupation, the inquiry did not end there. The court questioned the validity of Liberty’s transferable skills analysis and its conclusion that Mackey was capable of performing three occupations - utilization review, triage nurse and a hospital volunteer coordinator.

The court rejected the transferable skills analysis because Liberty failed to consider Mackey’s need to take narcotic pain medication to control her symptoms, Mackey’s age and her limited computer knowledge.

The court agreed with Mackey that the jobs Liberty identified required her to use her registered nurse licensure. However, Mackey introduced evidence that the state of Arkansas prohibits the use of controlled substances by anyone working in a medical field.

Instead of responding to that issue, Liberty merely asserted that the side effects of the medication could be managed. However, the plaintiff pointed out that the Arkansas state board that oversees nursing licenses looks only at whether "a controlled substance is consumed, not what the side effects of such medications are." (Emphasis in original.)

Hence, the court found Liberty’s decision was the product of an abuse of discretion. The court remarked that "it is inconceivable that a private actor would supplant the interpretation of an agency employee for its own, without additional inquiry. Liberty Life should have either accepted [plaintiff’s argument that the state of Arkansas would have prohibited working in a medical occupation while using narcotics] or contacted the [n]ursing [b]oard itself for clarification. Instead, it chose to do neither."

The court next found that Liberty failed to take Mackey’s age into consideration. Although the plan itself did not require that a claimant’s age be considered and the court observed that "where the participant is relatively young, age may be an innocuous factor hardly necessary to reference," Mackey was 63 years old when her benefits were denied. Thus, the court found, "Her age is, accordingly, a central factor in determining whether she is capable of performing an occupation — particularly one that she had never performed in her career before." (Citations omitted.)

Finally, the court criticized Liberty’s failure to consider Mackey’s lack of computer skills. The record showed that Mackey did not own a computer and had limited experience using electronic medical records. Consequently, the court made the following critical observation:

"The importance of possessing at least some baseline computer skills cannot be overstated in today’s economy. This is particularly true for occupations which may be classified as sedentary. Many — and likely most — of these jobs involve sitting at a desk and operating a computer for much of the work day. For example, being a volunteer coordinator presumably requires, in at least some part, use of Microsoft Office, managing an electronic database of volunteers, crafting and sending mass e-mails and perhaps managing social media pages."

Despite Mackey’s need to possess computer skills to perform the suggested occupations identified in the transferable skills analysis, Liberty never considered the issue, which, according to the court’s findings, rendered Liberty’s reliance on its vocational report an abuse of discretion.

The court remarked, "Absent consideration of Ms. Mackey’s age and lack of computer skills, Liberty Life’s vocational analysis was little more than a formulaic document, insufficiently individualized to Ms. Mackey."

The court then reinforced its criticism of Liberty’s inadequate skills analysis with the following critique:

"While not without value, such an analysis lacks the sort of individualized consideration necessary to determine whether the actual member, and not just a generic person with their educational and occupational background and physical limitations, can perform the material and substantial duties of an occupation.

This type of formulaic vocational analysis can serve as important evidence for determining whether a plan member is suited to an occupation, see Green v. Union Security Insurance Co., 646 F.3d 1042, 1052 (8th Cir. 2011), but a benefit plan administrator must also consider its member as an individual, factoring the material characteristics of the person, such as (in this case) age and computer skill."

Based on the sum total of those deficiencies, the court overturned the claim decision.

The significance of this ruling cannot be understated.

The case was brought by Rick Spencer, a well-known, highly experienced Social Security practitioner in Arkansas. This opinion illustrates how the importance of transferable skills analyses in Social Security cases can be effectively utilized in the context of the Employee Retirement Income Security Act as well.

As a result, the court grasped the main issue, which led to a conclusion that rejected a formulaic, generic vocational assessment and highlighted the need for an individualized assessment that appropriately addresses issues such as age and experience that might pose an impediment to working in a position that an individual might otherwise be qualified to perform.

The Mackey opinion offers a road map both to claimants and insurers on how to do a better job in evaluating disability.