Under many disability policies, claimants must show that they cannot perform the material and substantial, or the important duties of their occupations in order to qualify for long-term disability benefits. Although these terms are essential to the determination of a disability claim, most insurers do not define the terms “material and substantial” or “important” in their policies. Nor do they provide guidance in their policies about what guidelines or factors they will use to determine the material and substantial or important duties of an insured’s occupation.
Our firm confronted this first-hand in a case in which we represent a gynecologist in a lawsuit against Unum Life Insurance Company of America and Paul Revere Life Insurance Company (collectively, “Unum”) for long-term disability benefits. Our client lacerated her tendon during a procedure and is now unable to perform major surgeries, including hysterectomies. She does, however, maintain a clinical practice in which she is able to bill for routine, simple procedures like lab work and office visits.
Our client’s income disability policies with Unum do not define the terms “material and substantial” or “important,” and provide no guidance on the factors Unum may employ to interpret those terms. So then what exactly are the “material and substantial” and “important” duties of our client’s occupation? Commonsense would tell you that people who purchase income disability policies intend to insure against a risk of an injury that would lead to a loss of income or a loss of earning potential. In our case, our client asserted that the material and substantial and important duties of her occupation were serving as a lead surgeon on major, invasive surgeries, because those procedures resulted in higher billings, clinical referrals, and post-surgical visits. These procedures were also vital in safeguarding her patients’ health.
Unum, however, did not view it that way. As a part of our lawsuit, we deposed Melissa Walsh, the corporate representative designated by Unum in response to our deposition subpoena. In her deposition, Ms. Walsh discussed a 13-page-document Unum prepared when it evaluated our client’s initial claim for disability benefits. (For your reference, we have attached a transcript of Ms. Walsh’s deposition transcript here. We’ve also attached a copy of Unum’s 13-page document here, which was exhibit 4 to the Ms. Walsh’s deposition.) The document contained all the procedures for which our client billed prior to her disability. Referred to by Ms. Walsh throughout her deposition, Unum’s billing document listed our client’s pre-disability duties, how often they were performed, and their total charges. (see pages 71-73, 92-93 and Exhibit 4 to the deposition.)
Walsh referred to this billing document as an “analysis” and claimed that the document contained all of the important duties of our client’s occupation. In reality, Unum didn’t analyze anything. Unum simply collected the procedures our client billed and indiscriminately lumped them all together with no regard to the billing amount, complexity, or medical significance of each procedure. To Unum, there was no difference between the total hysterectomies our client performed, charged at $2,160.00 a procedure, and the urinalysis she administered and billed at $10.00. As Unum saw it, both procedures were each equally “important” for the purposes of evaluating whether our client could perform the important duties of her occupation. Remarkably, Unum’s listing of our client’s purportedly important duties also included billing for patients that did not show up for their appointments. (Walsh testified that the analysis of our client’s “important” duties, was no different than the analysis of her “material and substantial” duties so, in our discussion of her deposition, we’ll use those terms interchangeably.)
There is a reason why Unum and other disability insurance companies want to designate as many job duties as possible as “material and substantial/important.” If they put nearly every duty into that category, especially routine tasks that are not impacted by most injuries or disabilities, it is more difficult for claimants to make the case that they are totally disabled. Under a more evenhanded approach, in which claimants are evaluated on the basis of whether they can perform the more rigorous duties that drive their earnings, disability insurers will have to approve more claims. Obviously, they do not want to do that.
Unum’s failure to differentiate between a claimants’ job duties, which are most essential for generating income, and their mundane job duties is not just self-serving; it defies commonsense. If every duty is important, then no duty is important. Unum and Paul Revere cannot write terms like “material and substantial,” and “important” into their disability policies and then disavow them when someone makes a claim. These terms have to connote a hierarchy of duties. In the case of our client, the gynecologist, a hysterectomy is an important procedure. It requires a high level of aptitude, years of training and practice, and is vital in relieving pain or treating cancer. When evaluating our client’s claim for total disability benefits, however, Unum regards a hysterectomy no differently than administering a pregnancy test.
Later in her deposition, Ms. Walsh would contradict her earlier testimony that all of our client’s duties were important. Incredibly, she testified that Unum did not regard surgery to be an important duty. This position shows the lengths Unum is willing to go to deny a claim. (See page 116 of Ms. Walsh’s deposition.) Even in the context of litigation, where parties may adopt aggressive, one-sided positions, it is flat-out irrational to state that our client’s ability to perform life-altering surgeries is somehow an unimportant duty.
For disability lawyers and claimants alike, we encourage you to review Ms. Walsh’s deposition transcript and see firsthand how Unum, Paul Revere and other insurers will try to use undefined terms like “material and substantial” and “important” to their advantage. The key points to remember are that, under both their own policies and black-letter contract law, they do not have the unilateral right to define those terms.
Disability insurers intentionally draft their policies in such a way that they can use undefined terms to their advantage, as Ms. Walsh’s testimony illustrates. That’s one of many reasons why you should consult with an experienced disability law firm when pursuing a claim for long-term disability benefits.