LTD Benefits Denied; Plan Standards Met
Because a beneficiary did not meet a long-term disability plan's requirement for "total disability" during a 180-day waiting period, an insurance company properly denied a claim for benefits, according to a ruling by the Eighth Circuit U.S. Court of Appeals (Butts v. Continental Casualty Company and Michael Foods, Inc., No. 03-1134).
Patti L. Butts had worked at Michael Foods as a poultry housekeeper until June 24, 2000. Her job consisted of standing and walking for up to four hours each day, lifting up to two pounds, carrying up to ten pounds, and pushing or pulling up to 30 pounds. On July 10, 2000, Butts underwent a surgical procedure from which she suffered complications—including chronic abdominal and leg pain. As a result, she required additional surgery in July and saw several physicians between July and December 2000.
Butts was scheduled to receive additional physical therapy in November 2000, but missed the sessions due to family reasons. In December 2000, Butts underwent minor surgery and was released the following day with "no restrictions."
In November 2000, Butts filed a claim for LTD benefits with Continental Casualty Company, which had issued a group LTD plan to Michael Foods. Continental denied the claim because Butts did not meet the plan's requirement of total disability during a 180-day waiting period. Continental noted that if Butts' disability began on June 24, 2000 (her last day of work), she ceased to be totally disabled when she stopped physical therapy on Oct. 25, 2000. Butts filed suit in Nebraska state court, but Continental removed the case to the U.S. District Court, which granted summary judgment in favor of Continental. Butts appealed but the eighth circuit affirmed the district court's ruling.
The eighth circuit court noted that the LTD plan clearly gave Continental the discretion to determine eligibility for benefits. The court noted that although Butts' condition "took a turn for the worse. . .the fact remains that the disability policy requires a 180-day period of total and continuous disability."
