Meaning of Long-Term Disability Insurance Plans’ Requirement You Be Receiving Social Security Disability

Employees in Chicago covered by an employer’s group long-term disability insurance policy sometimes see a term that to qualify for “any occupation,” or “any gainful occupation,” disability benefits, they must be receiving Social Security Disability benefits. But it can take quite a long time to have Social Security Disability adjudicated in your favor, often years. Do the long-term disability insurance plans’ requirements you be receiving SSDI mean you must have been awarded those SSDI benefits already, or that a retroactive award to your eligibility date satisfies the requirement? Insurers often try to take the former view. But as a recent case demonstrated, that isn’t always reasonable.

In Robinson v. Aetna Life Ins. Co., No. 20-cv-4670, 2023 WL 2058310 (N.D. Ill. Feb. 16, 2023), Robinson worked for Mondelez Global LLC and suffered from severe cardiac conditions. He claimed disability in 2016. The plan provided that in order to receive long-term disability benefits beyond 24 months, the participant must be receiving Social Security Disability benefits. Robinson claimed SSDI, but his claim was still pending at the 24-month mark. Aetna Life Insurance Company terminated his long-term disability benefits at the 24-month mark because he was not receiving SSDI yet. Weeks after Aetna upheld its denial on appeal, Robinson received a retroactive SSDI award dating back to his 2016 claimed disability date. He asked Aetna to consider it and award him benefits, but it refused. However, it asserted a right to overpayment of benefits for the time period Aetna awarded Robinson benefits, and he received retroactive SSDI benefits. Robinson then sued for benefits under ERISA § 502(a).

The district court held Aetna’s decision was arbitrary and capricious. It reasoned that Aetna failed to help Robinson obtain the SSDI benefits, but then used the delay in the award against him. Moreover, Aetna considered the retractive award of SSDI for purposes of its overpayment calculation, but refused to consider the retroactive award for purposes of entitlement to long-term disability benefits. See, e.g., our victory in Schane v. Int’l Bhd. of Teamsters Union Local 705 Pension Fund Pension Plan, 760 F.3d 585 (7^th Cir. 2014). Because Aetna never made a decision on whether Robinson was disabled from any occupation, the court remanded to Aetna with instructions to make that determination within 120 days.

If your claim for long-term disability insurance has been denied, speak to an experienced long-term disability lawyer immediately.