No Evidence of Physical Disability: Appeals Court Upholds Liberty Life’s Benefit Termination Due to Mental Illness Limitation
Disability benefits were paid for 2 years under a Mental Benefits Limitation
A federal appeals court has upheld a decision by Liberty Life Assurance Company to terminate benefits under an employer’s group plan which limited benefits to 2 years for disability due to mental conditions.
Like many disability insurers, Liberty issued a group disability policy to Allstate Insurance Company which had a limitation covering disability for mental limitations for only 24 months. This is not only common, but also perfectly legal, despite the fact that it discriminates against people with mental illness. Yulunda McAlister, an Allstate employee in Kentucky, made a claim for benefits, and Liberty approved her based on depression, a mental condition. When Liberty terminated McAlister’s claim after the 24th month of paying benefits, she appealed, contending that her disability was based on an organic cause, not an affective mental disorder.
Treating doctor described condition as a “cognitive disorder,” but also listed “major depression” in records
There was no dispute that McAlister had depression disability, a mental illness, for the first 2 years. As in most mental limitation cases, the question was whether a physical disorder caused disability after the 24th month. McAlister’s appeal relied upon a diagnosis by her physician that she suffered from “cognitive disorder, not otherwise specified.” She took the position that this was an organic condition, not a mental illness.
Both the federal trial court in Kentucy and the Sixth Circuit Court of Appeals focused on the overall evidence. The question in ERISA cases is whether the disability insurance administrator has substantial evidence to support their decision. McAlister’s problem was that there were substantial records showing her diagnosis as major depression.
The appeals court recognized that treating physician opinions must be considered. However, under ERISA, those opinions are not controlling. McAlister’s claim file was replete with physician reports discussing her depression. Significantly, even her treating doctor that diagnosed her with a cognitive disorder also diagnosed her with Major Depression! There was no other proof that the cause of her cognitive issues were anything other than a mental condition.
The court agreed that there was not enough evidence of a physical disability.
Ultimately, there simply was not enough evidence to show that a physical condition was disabling Ms. McAlister. She provided medical records showing the severity of her mental illness, yet no records proving she had a physical condition. Oddly, the focus of her case was on a cognitive disorder, yet the Liberty Life mental limitation actually had a clause which stated that any mental condition, regardless of cause, would fall within the 24 month limited period for mental conditions.
TAKEAWAY: To beat a mental limitation in a disability policy, you must submit evidence of a physical disability.
In this case, although the disabled person provided plenty of medical records noting the extent of her illness, none of the medical records specifically mentioned any physically disabling conditions that would make her completely unable to work any type job in the natural economy. Her own doctor listed depression as one of her diagnoses. Your doctors must describe physical diagnoses, not mental, if you want to avoid being terminated for being disabled due to a mental illness.
If you suffer from depression, anxiety, or some other mental condition that a disability insurance company wants to use to limit payments under a mental limitation, you must provide evidence of a physical disability to keep receiving benefits.