Employees in Chicago and around the rest of Illinois with claims for long-term disability benefits frequently get worried about the long-term disability insurer placing them under surveillance. But when does surveillance hurt your long-term disability claim? In most instances of surveillance we see, the surveillance is benign and does not affect the claim at all. Benign surveillance occurs when the investigators either do not observe anything, or observe you doing things consistent with what you and your doctors represent to the insurer you are able to do. Surveillance can hurt your claim, however, where it reveals you doing something inconsistent with what you or your doctors told the insurer you cannot do. A recent case demonstrated how damaging surveillance set off a domino effect of claim investigation that ultimately led to benefit termination.
In Avery v. Sedgwick Claims Management Services, No. 22-1960, 2023 WL 4703865 (6th Cir. July 24, 2023), Avery worked for Chrysler as a finance specialist before suffering a fall that fractured her right ankle. After recovering, spontaneous pain in her right leg returned, leading to a diagnosis of advance peripheral deyelinatibe and axonal polyneuropathy of the lower legs. Avery stopped working in 2011 and claimed disability. Sedgwick approved Avery’s claim for short-term disability and long-term disability benefits. After three years of paying Avery disability benefits, in 2014, Sedgwick placed Avery under surveillance, which revealed Avery driving, though she was medically restricted from driving. Sedgwick then requested an Independent Medical Examination, which opined Avery had no functional limitations at all. Avery’s treating physicians disagreed with this conclusion. After unsuccessfully appealing the benefit termination, Avery sued under ERISA § 502(a).
The United States District Court for the Eastern District of Michigan ruled in Sedgwick’s favor, holding it relied on substantial evidence to terminate the benefits; thus the termination was not arbitrary or capricious. Avery appealed to the United States Court of Appeals for the Sixth Circuit, where she fared no better. That court likewise held Sedgwick was entitled to rely on the surveillance and IME opinion to terminate benefits. What ultimately sunk Avery’s claim was that she engaged in activity she or her doctors reported she could not do, prompting Sedgwick to aggressively investigate her claim and structure a benefit termination.
If you have a claim for long-term disability benefits and have been placed under surveillance, contact a knowledgeable ERISA long-term disability lawyer today.