Residual Disability Rider Used to Deny Long Term Disability
When someone pushes through a difficult physical problem to continue to work, can that be used to punish them? Yes, if a long-term disability policy is involved. Many professionals in the workforce, lawyers included, insure themselves with a disability policy. Good policies insure the professional regarding disability and typically also have a residual disability rider.
What is s residual disability rider?
If there is still some ability to perform the occupation, but slower with reduced earnings power, the residual disability rider will pay a benefit. People who identify strongly with their work will prefer this effort.
Insurance companies have seized upon the residual disability rider provision to pay less or no benefit. Thus, when a residual disability rider is part of a policy, the insurance company argues that because the insured retained one or two abilities, he is only residually disabled. This effort erodes the total disability benefit. The underlying interpretation is that the insured is only totally disabled if every material duty cannot be performed. Residual disability covers everything else. Thus, someone with residual disability coverage can see their total disability coverage evaporate.
A recent case, Millis v. Ameritas Life Insurance Corp. explored this residual versus total disability issue very carefully in connection with the duties of a liver transplant surgeon.
Facts of the Case:
Dr. Millis had been specially trained to be a liver transplant surgeon, but liver transplants are not necessarily a daily occurrence.
Since these surgeries are only periodic, liver transplant surgeons would also have a professorship position at a medical treatment hospital. This was the case for Dr. Millis.
Between liver transplant surgeries, Dr. Millis would also perform hepatobiliary surgeries, a much simpler procedure to treat the liver, bile duct, and pancreas. General surgeons, as well as oncology surgeons, can perform that simpler surgery, but they cannot perform liver transplants.
Dr. Millis fell and broke his arm. As a result, he lost the ability to perform liver transplant surgeries unless he had a steroid injection. Since there is a limit on the number of steroid injections one can have, he was placed in the role of only performing those surgeries when all other liver transplant surgeons were unavailable.
As a result, his privileged status with the University of Chicago Medicine Center was changed from abdominal transplant surgeon to general surgery. Physically, he was able to perform all his work activities except liver transplants.
Ameritas adopted a divide and conquer strategy. It claimed that Millis had three separate occupations, and he was only unable to perform the liver transplant occupation. He could still teach and perform other surgeries. Thus, it contended, it only had to pay a residual disability benefit, and not the total disability benefit.
Accordingly, Dr. Millis filed a lawsuit.
The evidence in the case demonstrated that liver transplant surgery was the professionally recognized medical specialty, and hepatobiliary surgery was not a separate specialty occupation. It was a surgery that could be done by one of several different types of surgeons. It was not a recognized medical specialty. Likewise, the professorship was directly related to the specialty of liver transplant surgeries.
The court likened this case to a shortstop, who was no longer able to throw due to an injury, but could perform running, hitting, and catching. The shortstop was not residually disabled, even though he was only unable to perform one of the four material, and substantial duties of his occupation. In order to be an effective shortstop, one must be able to do it all.