Insurers May Not Ignore Evidence of Psychiatric and Cognitive Limitations in Long-Term Disability Claims

Employees in Chicago with claims for long-term disability frequently suffer from psychiatric and cognitive limitations in addition to their physical ailments. Often, these psychiatric and cognitive limitations are results from the physical limitations. It is not uncommon for pain and fatigue to cause things like adjustment disorder, depression, anxiety, or problems with processing information and executive functioning. But there is a careful distinction between disability based on psychiatric conditions, and cognitive limitations resulting from physical ailments. Most long-term disability insurance policies include 24-month limitations on benefits payable due to a disability caused by psychiatric conditions. Claimants must accordingly thread the needle carefully when asserting cognitive limitations, as demonstrated by a recent case.

In Murch v. Sun Life Assurance Co. of Canada, No. 20-cv-3900, 2023 WL 3058780 (N.D. Ill. Apr. 24, 2023), Murch worked as a transactional attorney for a multi-national law firm. He claimed disability due to sleep behavior disorder and a functional neurological symptom disorder, though his diagnoses were not yet all definitive, as doctors were still working his case up. He claimed long-term disability under his employer’s sponsored group long-term disability insurance policy, insured by Sun Life. Murch cited symptoms of extreme tiredness, hand tremors, difficulty speaking, pain, numbness and weakness in his arms, hands, legs, and feet, and difficulty with memory, concentration, confusion, and other speech problems. Sun Life quickly denied Murch’s claim. After he unsuccessfully appealed, Murch sued Sun Life under ERISA § 502(a) for benefits due under the long-term disability policy.

The United States District Court for the Northern District of Illinois determined the arbitrary and capricious standard of review applied to Murch’s claim in an earlier decision, found here. Reviewing the denial under this deferential standard of review, the Court held most of Murch’s arguments were not valid, including that Sun Life denied the claim because there was no definitive diagnosis, that Sun Life disregarding the policy’s own occupation standard, that Sun Life failed to undertake a holistic review of Murch’s claim, and that it ignored his doctors’ opinions. The Court agreed with Murch, however, that Sun Life improperly ignored psychiatric and cognitive limitations. Sun Life asserted that Murch’s counsel sent it a letter disclaiming Murch’s disability was based on psychiatric and cognitive disorders, prompting Sun Life to stop reviewing whether Murch had any psychiatric or cognitive limitations. The Court held this was arbitrary and capricious, and an overly narrow view of Murch’s contention in the letter. Murch appears to have disagreed with reviewing his claim as one that would fall within a 24-month limitation, but never suggested Sun Life should disregard his claimed psychiatric and cognitive limitations caused by his physical ailments. Unable to determine whether Murch would be entitled to benefits, though, the Court remanded the matter back to Sun Life to continue its review consistent with the opinion.

If you have a claim for long-term disability insurance benefits, contact a knowledgeable ERISA long-term disability lawyer today.