What does the term “own occupation” mean in disability insurance coverage? The answer to that question was recently provided by a federal court in New Jersey.

The case of Patterson v. Aetna Life Insurance Co., 2017 WL 4786562 (D. N.J., Oct. 23, 2017), involved Christopher Patterson, who became disabled in 2007 following spine surgery and who received disability insurance benefits for the next seven years until Aetna abruptly ceased making payments.

Prior to becoming disabled, Patterson worked for a consulting organization as a system analyst responsible for “analysis, design, development, implementation and maintenance of information systems and web-based applications.”

In addition to the need to possess considerable technical skills and experience to perform such a job, travel was required on a nearly full-time basis.

Although repeated surveillance and an independent examination conducted in 2009 led Aetna to conclude that Patterson remained disabled, in 2014, Aetna performed a full re-evaluation of the claim.

As part of its assessment, Aetna obtained a medical file review report from Dr. Lucia McPhee deeming Patterson capable of sedentary work. That was followed by a vocational evaluation which acknowledged the travel requirements of Patterson’s work but deemed his occupation “sedentary” as performed in the national economy and maintained that an employer could accommodate travel limitations. Aetna then terminated Patterson’s benefits.

The policy at issue defined disability as the inability of the claimant to “perform the material duties of [his] own occupation.” The term “own occupation” was undefined in the policy, though.

Aetna maintained the provision required consideration of how the occupation is generally performed in the national economy. However, the court disagreed and found “Aetna should have considered the actual duties performed by Patterson before he became disabled.”

The court looked to precedent, which established that the “assessment of a claimant’s ability to perform the ‘material duties of his/her regular occupation’ requires consideration of the ‘usual work that the insured is actually performing immediately before the onset of disability.'” (citingLasser v. Reliance Standard Life Insurance Co., 344 F.3d 381, 386 (3d Cir. 2003)).

The court deemed the distinction between “own occupation” used in the Aetna policy and “regular occupation” used in the policy in Lasser immaterial. The court also cited two other cases: Osborne v. Hartford Life & Accident Insurance Co., 465 F.3d 296, 300 (6th Cir. 2006), and Peck v. Aetna Life Insurance Co., 495 F.Supp.2d 271, 277 (D. Conn. 2007), which also deemed “own occupation” synonymous with the claimant’s job.

The court added that if Aetna intended to apply a broader national economy standard, it should have said so in the policy. The failure to specify in the policy that Aetna defined “own occupation” to mean a more generalized generic occupation was fatal to its decision.

The court next examined Patterson’s “material duties,” since that was a term defined in the policy as duties that:

  • “[A]re normally required for the performance of your own occupation.”
  • “[C]annot be reasonably omitted or modified.”

Since the record showed Patterson’s duties involved extensive travel and giving presentations, the court observed that Aetna could not simply disregard those duties.

The court also examined the evidence relating to Patterson’s ability to do his job and concluded that the medical findings supported an ongoing inability to perform such job duties. Although accommodations were suggested, the court found it “unlikely these accommodations would be available to Patterson if he primarily traveled and worked outside of his own office.”

What plainly troubled the court and influenced the outcome of the case was Aetna’s inconsistency in handling the claim over the years.

“After conducting its first and only independent medical examination conducted in April 2009 and undertaking surveillance,” the court explained, “Aetna continued to find that plaintiff was disabled. Its own records say so: Patterson ‘cannot work’ and the medical information ‘continues to support [Patterson’s] disability.’

“Yet the doctor who performed the IME in 2009, like the doctor who undertook the review of medical records in 2014, both found that Patterson was capable of ‘sedentary work.’ So what changed in those five years? In both instances, findings were made after conducting surveillance which demonstrated that Patterson was capable of walking and driving short distances.

“Four years after finding him disabled, Aetna came to a contrary conclusion based on strikingly similar surveillance videos, a review of Facebook posts from Patterson’s wife mentioning family vacations and a medical record review by a nurse. Why was Patterson ‘disabled’ in 2009 but not disabled in 2014 based on very similar evidence?” (Record citations omitted.)

Aetna tried to excuse its inconsistency by asserting that it had applied the wrong standard for 94 months, to which the court responded, “Was Aetna right then, or is it right now?” The court answered its own rhetorical question by remarking, “A retroactive finding that a plaintiff was never entitled to LTD benefits, without new medical information, is itself evidence of arbitrariness and capriciousness.”

The court thus ordered Aetna to reinstate Patterson’s benefits.

The court was clearly bothered by Aetna’s inconsistency. There were certainly questions raised about Patterson’s ongoing entitlement to benefits, but since there was essentially no change in the medical evidence relating to his condition, Aetna could not justify its abrupt change in position after paying benefits for seven years.

However, this is an issue on which courts have been divided, although most courts recognize that the U.S. Labor Department’s Dictionary of Occupational Titles is hopelessly outdated since it was last revised in 1991 and includes many job descriptions that date from the 1970s.

The problem with Aetna’s decision in this case is that it tried to make Patterson’s job too generic and ignored the reality that high-level business consultants often need to travel extensively.

A similar mistake was made by Aetna in another case decided several years ago by the 5th U.S. Circuit Court of Appeals, Robinson v. Aetna Life Insurance Co., 443 F.3d 389 (5th Cir. 2006). There, the court faulted Aetna for failing to address a sales representative’s travel requirements in assessing disability. The insurer utilized the job description for “sales representative,” which included both inside and outside salespersons. However, the plaintiff’s occupation was exclusively in outside sales. Consequently, the court rejected Aetna’s reliance on a broad Dictionary of Occupational Titles job description.

In this case, it was evident to the court that Patterson’s travel and presentation responsibilities were nonmodifiable aspects of his occupation and thus had to be taken into consideration.

This article was initially published in the Chicago Daily Law Bulletin. 

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