A Kentucky District Court found Standard’s decision to terminate a truck driver’s disability benefits unreasonable. Lewis Bustetter was covered under group long term disability and life insurance policies through his employer, CEVA. Bustetter filed for long-term disability and waiver of life insurance premium benefits when he could no longer work as a tank-truck driver.
Under the long term disability policy, Bustetter had to show he was unable to work as a truck driver to receive disability benefits from Standard for the first 24 months of his disability. This is known as the “own occupation period.” Thereafter, Bustetter had to show he was unable to work in any job to continue receiving disability benefits. This is known as the “any occupation period.” The disability policy also had a 24 month limitation for disabilities due to other conditions. Bustetter was diagnosed with a medical condition that was an exception to the policy’s limitation. In order to keep his life insurance policy, Bustetter had to show he could not work in any occupation.
Mr. Bustetter’s Claim & Appeal
Bustetter suffered from numerous medical conditions including lumbar radiculopathy, herniated discs, neck pain, cervical stenosis, systemic autoimmune disease, and spinal cord lesions. Standard initially approved both of Bustetter’s claims and then reviewed his entitlement to benefits beyond 24 months under the “any occupation” definition of disability. Bustetter’s treating doctors all opined he could not return to work in any occupation due to his conditions. They described his gait as stiff and slightly wide based and recommended he avoid repetitive bending of the neck and back.
During its review, Standard hired three doctors to read Bustetter’s medical records and render an opinion on his abilities. Standard also conducted a vocational analysis and determined Bustetter could return to work in other occupations. Based on these reports, Standard terminated both his long term disability and waiver of life insurance premium claims. In his appeal response, Bustetter provided a Functional Capacity Evaluation (FCE) supporting disability. After having one of its paid doctors review the appeal documents, Standard denied Bustetter’s claims.
The Court’s Decision
In reviewing the facts, the Court noted that Standard’s explanation for denying Bustetter’s long term disability claim based on its doctors’ review was cursory. Moreover, Standard had the right under the policy to personally examine Bustetter but failed to do so. Standard’s reliance on the opinion of non-examining physicians, instead of Bustetter’s numerous doctors was unreasonable. Finally, Standard’s denial failed to address Bustetter’s waiver of life insurance claim.
In the end, the Court found Standard’s decision to be arbitrary and capricious. The court remanded the claim back to Standard to adequately address its concerns.
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