Disability insurer taken to task over vocational assessment

This article was published in the Chicago Daily Law Bulletin on February 25, 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 [email protected].

A recent ruling from a federal court in Kentucky raised serious concerns about the validity of vocational assessments performed by disability insurance companies.

In Bishop v. Aetna Life Insurance Co., 2016 WL 591765 (E.D. Ky., Feb. 12, 2016), the court overturned a denial of disability benefits after finding that Aetna improperly disregarded a Social Security determination and that its vocational assessment was markedly flawed and biased.

The case involved Scott Bishop, a former machine operator for the Wausau Paper Co. in Kentucky. In 2012, Bishop applied for disability benefits from his employer's group disability insurer, Aetna Insurance Co., after he ceased working on account of osteoarthritis and gout. He also applied for Social Security disability benefits.

Both Aetna and the Social Security Administration approved Bishop's claim for benefits, but Aetna ceased making payments after 24 months. For the initial 24-month period, "disability" was based on Bishop's inability to perform his regular job. Thereafter, to continue receiving benefits, he had to meet a standard that assessed whether he could perform a "reasonable occupation," which includes "gainful activity that the claimant may become fitted to with additional education, training or experience, even if the claimant is not currently able to perform that type of work."

Because the Social Security Administration pays benefits only if an individual cannot perform any work, the court began its analysis by examining the relationship between the Social Security award and Aetna's benefit program. The court questioned whether Aetna presented a valid explanation for terminating Bishop's benefits in the face of the Social Security benefit approval under a more demanding definition of "disability." The court rejected Aetna's explanation, finding the insurer relied on a post hoc justification for terminating benefits.

The court acknowledged that while the Social Security decision was not automatically binding on Aetna, the determination was nonetheless persuasive evidence supporting a comparable finding under the private disability plan.

Ultimately, the court rejected the insurer's disregard of Bishop's Social Security award because Aetna failed to engage with the reasoning and evidence supporting Social Security's finding that Bishop was disabled.

The main portion of the court's opinion focused on Aetna's vocational assessment. Aetna had obtained an initial "job seeker" report finding that Bishop could perform several "potential" occupations despite his impairments.

The "potential" designation meant that additional vocational preparation was required. However, Aetna mistakenly assumed that Bishop was immediately capable of performing the potential occupations without evaluating whether he possessed the skills, training and education necessary to actually perform the specified occupations. Thus, the court rejected Aetna's vocational assessment.

The court also invalidated the vocational assessment because it found the evaluation was the product of a selective review of the medical documentation, which excluded evidence that regular flare-ups of Bishop's gout would result in frequent job absences and ignored other data.

"Recurring absenteeism," the court pointed out, "is undoubtedly a major consideration in determining whether a person can acquire a job"; however, Aetna's vocational consultant never took that issue into consideration.

Overall, the court dismissed Aetna's vocational evaluation, finding, "Aetna acted unreasonably by commissioning a result-oriented vocational report based on limited records. A vocational analysis based on such a small, self-serving portion of the claimant's records is not reliable evidence."

Therefore, the court concluded the decision to terminate Bishop's benefits was the result of an arbitrary and capricious process. The court was extremely skeptical of Aetna's heavy emphasis on the "or may reasonably become" language in the "reasonable occupation" requirement under the policy, finding the argument was "manufactured ... after-the-fact to shore up its decision for litigation."

Even so, the court refused to reinstate Bishop's benefits. It remanded the matter to Aetna with advice to utilize a vocational expert "who is given a full record - to determine whether there are sedentary jobs that Mr. Bishop can perform even with the various limitations on his physical capacity, notably the possibility that he will miss work due to gout flare up. If such jobs exist, Aetna should specifically state whether it believes Mr. Bishop is currently qualified to perform those jobs or whether he will need additional education and/or training to qualify for them."

Bishop, along with several other recent court rulings involving Aetna, presents a road map to examining Aetna's compliance with the terms of its policies and a checklist to assess the validity of any vocational report:

  • Was the evaluator provided with all of the relevant medical evidence?
  • Did the evaluator assess the claimant's prior occupation and acquired skills properly?
  • Was the transferable skills analysis performed properly? (A "potential" match under the job analysis software that most vocational evaluators utilize deems a potential match as requiring additional training.)

Within the last category, there also needs to be a further explanation of the following:

  • What additional training or education is necessary for the claimant to perform a "potential" job match?
  • How long will it take to acquire the necessary qualifications, or how extensive is the necessary additional training?
  • Does the insured even have the necessary requisite skills and education to undergo additional training or education?
  • Are there any other factors that might limit the claimant's employability such as anticipated missed days of work?

Another critical factor not discussed in Bishop but has been frequently commented on in Social Security disability cases questions the reliability of the source of occupational data used by vocational evaluators. See, e.g., Hill v. Colvin, 807 F.3d 862 (7th Cir. 2015) (Posner, J., concurring).

Such data are often out-of-date or aggregate specific jobs within a category of jobs, thus making it impossible to determine either the potential salary or number of jobs available in the labor market for the identified occupations.

The importance of an accurate vocational assessment in disability claims cannot be understated, especially in situations where a claimant's ability to work at a particular job or meet an established wage threshold are critical elements of the determination.

The Bishop ruling recognized that even under a deferential review, a facially reasonable explanation is not necessarily a rational or evidence-based analysis and deserves scrutiny.