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Missouri Woman Receives LTD After LINA’s Arbitrary Denial of Benefits

Melanie Lapidus was employed with BJC Healthcare as the Vice-President of Medical Benefits. In that role, she developed and executed strategic initiatives related to the growth of a managed care provider network. The work was sedentary for the most part, but it also involved brief periods of standing, walking, and lifting, carrying, or pushing 10 pounds occasionally. She attended meetings with both employees and clients regularly, which required prolonged sitting and walking. In 2002, Ladipus ruptured two discs in her lumbar spine. She was given the option to either have surgery right away or go through conservative treatment in the hopes that her condition would improve or that she would not have to have surgery until several years down the road. She chose the treatment option, which involved physical therapy, exercise, steroid injections, and chiropractor visits.

In 2013, she was diagnosed with degenerative lumbar scoliosis, and she began experiencing numbness in her left leg in 2015. Her doctor told her at that time that eventually, the feeling in her legs would not return and that she would have problems walking and other related issues.

Filing for Short Term Disability

Ladipus’s employer had both short-term disability insurance (STD) and long term disability (LTD) insurance policies through Life Insurance Company of North America (LINA) governed by ERISA. Those classified employees and gave different benefits to various classes. Lapidus was in Class 7, which meant that her definition of disability under the disability insurance policy was not quite the same as other classes. It required two major facts to get benefits:

1. She must not be able to perform “the material and substantial duties” of her regular job and

2. She cannot earn 80% or more of her Indexed Earnings from working in her regular job.

Ladipus had spinal fusion surgery in early 2016. She applied for STD benefits for the first time due to that surgery. She was approved for benefits, and those benefits continued as Ladipus continued to heal. Unfortunately, she continued treatment, but she did not seem to make any improvement, and her pain actually got worse over time.

Her doctors did not release her to go back to work due to her worsening condition. Her STD benefits were extended to the last day that they were available. After that, LINA transitioned her claim from the STD unit to the LTD unit.

LTD Application and Benefits

As part of her LTD application process, Lapidus noted that she was working about 10 hours per week in the office and another 10 hours per week from her home. She indicated that she would be returning to work to a modified schedule at the advice of her treating physician. Plaintiff also indicated that she was receiving 100% of her salary through the end of her STD termination date.

LTD was approved initially. However, LINA requested pay stubs from her employer in August 2016, which was approximately one month after her STD benefits terminated. LINA received those pay stubs and reviewed them, noting that Lapidus was receiving her full-time pay through the most of August. This was a problem from LINA’s perspective because only those who receive 80% of less than their normal income are entitled to disability benefits.

In September 2016, LINA told Lapidus that her benefits would be discontinued. At the same time, Lapidus was notified that her modified work schedule was no longer going to work for her employer and that she would be terminated effective December 31, 2016.

LINA stuck by their denial, and disputed Lapidus’s administrative appeals. The denial continued, and Lapidus filed a lawsuit with the district court.

Involving the Court

Part of Lapidus’s main argument was that LINA approved her short-term disability and several months of long-term disability, but then suddenly terminated benefits without any real change of her condition. She stated that her medical condition was essentially the same as when she was awarded benefits and when benefits were terminated.

In examining this argument, the Court noted that when the insurance company allows benefits and then denies them, it is required to show a “significant change in claimant’s condition making her no longer eligible for benefits.” Because of this general rule, the Court examined the factual differences between when she was provided LTD benefits and the date of the initial denial.

The Court thoroughly reviewed Lapidus’s medical records and concluded: “The preponderance of the evidence demonstrates that Plaintiff’s pain is persistent, disabling and ongoing not only from January 2016 through August 2016 but from August 2016 through at least January 2018.” The Court agreed, however, that because Lapidus was receiving more than 80% of her income for roughly two months, she could not receive benefits for that time period.

Essentially, the Court decided that Lapidus had presented enough medical evidence to show that her condition was not markedly different from when benefits were awarded to when her claim for disability benefits was denied. As a result, Lapidus was awarded benefits from her denial date in 2016, forward—and she would continue to receive benefits as long as she continued to qualify under the terms of the disability benefits policy.

Dell & Schaefer did not handle this case, but many clients face similar situations as Lapidus, where an insurance company will try to use weak evidence to deny benefit claims. We have unfortunately seen similar cases in the past. If you are experiencing a situation like this one, give our team a call to set up a free consultation.