At first glance, it did not seem like a strong claim for disability benefits. The claimant, a technician, applied for short-term disability benefits claiming that he was disabled as a result of severe spinal and hip disorders. He filed his claim after his employer fired him for repeated acts of insubordination. Under the terms of his ERISA policy, no individual could qualify for disability benefits if the period of disability began when he or she was no longer an employee of the company. Solely due to this provision, the plan administrator (“Plan”) denied the claim for disability benefits.
In his lawsuit seeking to overturn the Plan’s decision to deny him disability benefits, the claimant argued that his period of disability began more than six months before his termination.
His case is Hipple v. Matrix Absence Mgmt., Inc., (E.D. Mich. June 13, 2014), and it is a decision of considerable importance for disability claimants. In Hipple, the claimant’s argument, on the surface at least, could seem flawed. How could you be disabled during a period in which you were still working? In Hipple, the court denied the Plan’s motion for summary judgment, faulting the Plan’s assumption that, because the claimant continued to show up to work until the day he was fired, “he was not disabled before that date.”
The ruling in Hipple is critical: A disability plan administrator cannot turn down a claim for disability benefits solely because the claimant continued to work after he or she began experiencing the onset of the disabling condition.
Hipple is not an anomaly, but, in fact, expanded on precedent. In the case of Rochow v. Life Ins. Co. of N. Am., 482 F.3d 860 (6th Cir. 2007), the Sixth Circuit held that a plan administrator could not deny an employee’s claim for disability benefits “solely because the employee was present at work on or after the alleged disability onset date.” In Rochow¸ the Sixth Circuit also determined that the plaintiff, whose employment was terminated before he sought disability benefits, had been disabled under the terms of his policy before he was terminated. As the court noted: “[T]here is no logical incompatibility between working full-time and being disabled from working full-time.” Continue reading