Regular Occupation Definition in Disability Insurance Claims

In Burkhead v. Life Insurance Company of North America, the plaintiff filed for short and long term disability benefits from Life Insurance Company of North America (LINA), the insurer of her ERISA governed plan, . In the District Court’s Opinion, the court held that LINA abused its discretion in denying plaintiff benefits under the “own occupation” standard with respect to the short term disability plan. However, the court held that LINA did not abuse its discretion in denying LTD benefits because the long term disability plan has an “any occupation” definition of “disability”.

The LINA short term disability policy defines disability as follows:

“You are considered Disabled if, solely because of Injury or Sickness, you are:
1. Unable to perform the material duties of your Regular Occupation; and
2. Unable to earn 80% or more of your Covered Earnings from working in your Regular Occupation.”

The STD Policy defines “Regular Occupation” as:

The occupation you routinely perform at the time the Disability begins. In evaluating the Disability, we will consider the duties of the occupation as it is normally performed in the general labor market in the national economy. It is not work tasks that are performed for a specific employer or at a specific location.

The Court recognized that the definition of “Regular Occupation” means the duties of the occupation as normally performed in the national economy and not in the claimant’s specific employment.  However, the Court found fault in LINA’s evaluation of the STD claim in that there was
nothing to show that LINA did any investigation of the work of a telecommunications analyst anywhere. Moreover, the Court stated, “Reference to the Dictionary of Occupational Titles is of no value in considering this type of employment in an industry that is highly technical with new
developments in hardware and software and the employee must interact with many people as customers and co-workers.”

The Court held, “The denial of the STD claim was made without a fair evaluation of the claimant’s ability to perform the type of work she was doing and is, therefore, arbitrary and capricious.”

As for the LTD claim, the Court held, “The any occupation test for LTD benefits is met only if the claimant can show that her fibromyalgia and fatigue limit her to such an extent that she is unable to do any work for which she is or may become qualified. Ms. Burkhead did not make that showing to LINA.”


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