Can the Reason for Long-Term Disability Change While on Claim?

Employees in Chicago and all around Illinois who receive long-term disability benefits often have the reason for disability change while on claim. They frequently have an insurer terminate long-term disability benefits because the original disabling condition has improved or resolved. This prompts the question whether it matters that an originally disabling condition resolved if there is a new reason for disability. The answer is it depends. Some policies expressly state you must remain disabled due to the same injury or sickness that rendered you disabled in the first instance. Others are not so specific. A recent case demonstrates the importance of this difference in policies.

In McEachin v. Reliance Standard Life Insurance Co., No. 2:21-CV-12819, 2023 WL 2611719 (E.D. Mich. Mar. 23, 2023), McEachin experienced a series of car accidents that left her with musculoskeletal problems. She claimed and received long-term disability benefits. While receiving long-term disability benefits from Reliance Standard, McEachin’s son committed suicide, leaving her with severe symptoms of depression and anxiety. Reliance Standard terminated benefits contending McEachin’s physical symptoms had improved, and she exhausted the policy’s 24-month limitation on disability benefits due to mental health. McEachin appealed, contending she had been approved for her physical disabilities and had not yet exhausted her 24 months of mental health benefits. McEachin then sued under ERISA § 502(a).

The United States District Court for the Eastern District of Michigan held Reliance Standard erred in terminating long-term disability benefits. The court reasoned that Reliance Standard clearly granted benefits on the basis of the physical conditions, disclaiming any evidence of disabling psychiatric symptoms. The court agreed that at the time of the benefit termination McEachin was disabled due to mental health, but held Reliance Standard could not retroactively apply the limitation. It thus ruled in McEachin’s favor and remanded to Reliance Standard to pay 24 more months of disability benefits, so long as McEachin continued to meet the definition of disabled.

If you have a long-term disability claim and have developed new reasons for needing the disability benefits, don’t waste any time. Contact a knowledgeable ERISA long-term disability lawyer.