What Happens When a Long-Term Disability Insurer Terminates Benefits While Your Condition Gets Worse?

Employees in Chicago and around the rest of Illinois often get approved for long-term disability, but then have benefits later terminated, despite their condition getting worse. They often ask us whether the insurer must show their condition improved to terminate benefits. While the burden to prove disability does not shift away from you even after an insurer approves your long-term disability benefits, whether a condition improved or worsened is a significant fact a court will consider in the event you find yourself in litigation. A recent case addressed this very issue.

In Graziano v. First Unum Life Insurance Co., No. 21-cv-2708, 2023 WL 4530274 (S.D.N.Y. July 12, 2023), Graziano worked as a Senior Property Underwriter for Swiss Re Group, a mostly sedentary occupation. Graziano began suffering from low back pain in 2010 and received cortisone injections to treat it. After the treatments were unsuccessful, Graziano began seeing a pain management specialist, who treated him with lumbar epidural injections. The injections initially provided some relief, but were temporary. In 2017 Graziano suffered an accident that aggravated his back pain. An MRI showed degenerative changes in his lumbar spine. He then left work and completed a two-day functional capacity evaluation (“FCE”). The FCE showed Graziano could only tolerate sitting 20–25 minutes at a time. Unum approved Graziano’s claim for long-term disability benefits. Graziano continued physical therapy, which documented his back pain did not improve. Unum then terminated benefits in January 2020, which Graziano appealed. Graziano submitted to a second two-day FCE, showing his tolerances got worse. A September 2020 MRI showed progressing degenerative changes in his lumbar spine. After Unum upheld its decision to terminate benefits, Graziano sued under ERISA § 502(a).

The United States for the Southern District of New York tried the case on the administrative record compiled before Unum, and ruled in Graziano’s favor, awarding him long-term disability benefits. The court was skeptical of Unum’s position given Graziano’s symptoms only worsened since Unum approved long-term disability benefits. It explained the burden of proof does not shift to the insurer merely because it awarded benefits, but the fact that a condition worsened after the insurer awarded benefits is strong evidence of entitlement to disability. The court generally found Unum’s medical reviewers’ opinions not credible given the history of failed treatments and worsening symptoms.

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