For approximately 16 years, Shirley Lacko was employed by BKD, Inc., an accounting firm. When her health issues forced her to quit her job, she applied for both short-term disability (STD) and long-term disability (LTD) benefits due to her numerous documented medical problems. At the time she stopped working on September 25, 2015, her position was that of Senior Manager in the Audit Department with an annual salary of $93,250.04.
The disability insurance group policies her employer provided to her were issued by United of Omaha Life Insurance Company (United). United initially approved her claim for STD from October 12, 2015, through November 22, 2015.
United informed her she would receive no benefits after November 22, 2015. United seemed to accept that Lacko had a plethora of medical problems, but it concluded that she failed to prove that these problems prevented her from performing a material duty of her regular occupation.
In making that decision, as it was allowed to do under the terms of the policy, United chose a job classification from the U.S. Labor Department Dictionary of Occupational Titles (DOT) to determine her “regular occupation.” The job classification it chose was “Manager, Department” with a generic job description suitable for an unskilled worker.
Meanwhile, the Social Security Administration (SSA) approved her claim for disability benefits. The SSA also chose a job classification from DOT after it conducted an in depth comparison of her actual job duties. It determined her regular occupation was that which required a skilled worker.
After United denied her claim, Lacko filed an administrative appeal which United denied. She then filed an ERISA lawsuit in the U.S. District Court for the Northern District of Illinois, Eastern Division. The District Court upheld United’s decision that Plaintiff had not proved she was disabled from working in her regular occupation. Plaintiff then appealed to the United States Court of Appeals for the Seventh Circuit.
In Shirley Lacko v. United of Omaha Life Insurance Co., the Appellate Court held that United did not properly consider Plaintiff’s job description or duties when classifying her job according to the U.S. Labor Department Dictionary of Occupational Titles (DOT). The Court remanded with instructions to United to reevaluate Plaintiff’s regular occupation classification, and to specifically consider the job classification used by the SSA in approving her disability claim.
United Erred When It Chose the Wrong Job Classification and Ignored Plaintiff’s Actual Job Description and Duties
The Appellate Court noted that Plaintiff based her claims for disability benefits on the combination of several impairments, “including but not limited to gastroparesis, diabetes, rheumatoid arthritis, congestive heart failure, breathing difficulties, anxiety, musculoskeletal impairments, and cognitive difficulties related in part to the medication needed to manage the other conditions.”
Plaintiff’s medical conditions were documented with physician statements and lab reports, X-rays, and MRIs. There was really no dispute over her actual ailments and United acknowledged her medical problems.
Plaintiff’s psychiatrist submitted a report based on medications Plaintiff was required to take and said that they interfered with her cognitive functioning. They psychiatrist stated that Lacko was incapable of performing an occupation that requires more than unskilled work. “Unskilled work for SSA purposes is work that ‘requires little or no judgment to do simple duties that can be learned on the job in a short period of time (30 days or less).’”
The record contained no mental or psychological evaluation that contradicted the psychiatrist’s report, and United never “challenged or questioned those findings.” The district court had agreed that United accepted the findings of Dr. Fritz, but that court failed to note that by accepting the findings of Dr. Frizt, this meant that the Plaintiff “possessed mental limitations that rendered her incapable of work other than unskilled work.”
On Remand, United is Required to Consider the SSA’s Job Classification in Order to Determine if Plaintiff Could Not Perform a Material Task of Her Regular Occupation
According to the United disability plans for both STD and LTD benefits, the Plaintiff was required to prove, among other things, that she was “prevented from performing at least one of the Material Duties of Your Regular Occupation on a part-time or full-time basis.”
When the SSA considered Plaintiff’s actual job duties of her regular occupation, it also used the DOT and considered the Plaintiff’s actual job description and job duties in order to determine the DOT classification that best fit Plaintiff’s regular occupation.
The SSA classified her position as “Accountants, auditors, and Related Occupations.” This classification recognized the job required “specialized administrative and managerial functions.”
The Seventh Circuit found that the SSA classification applied “to the audit and accounting managerial functions common to many organizations. Those appear more directly related to the Senior Manager position at issue here. They also more closely align with the job description for the position of Senior Manager in the Audit Department.”
This was an occupation requiring specialized skill. Since Plaintiff’s medical condition allowed her only to perform unskilled work, the SSA found that under its job classification, she was unable to perform a material task of her regular occupation which required skilled work.
The Seventh Circuit held that “because United failed to recognize and address the cognitive limitations set forth in the SSA decision, there is no reasoned basis in the decision to support the determination that Lacko was ineligible for disability benefits. The district court failed to address that deficiency in United’s analysis.”
The Appellate Court expressed some frustration with United, stating “on appeal, United continues in its selective characterization of the SSA’s decision.” In its brief, United argued that the SSA found that Plaintiff’s limitations “had not arisen to such level as to prevent her from participating in work related activities.” United left out the part that the SSA found she could participate in “work” only if the work was “unskilled work.” But, the SSA determined that she “lacked the ability to perform her past relevant work because it was skilled work.”
The Seventh Circuit reversed the district court finding that Plaintiff was not entitled to benefits since the district court, like United failed to recognize the significant distinction between skilled and unskilled work “which is controlling for the purposes here of determining her ability to perform the job of Senior Manager.”
If your disability insurance company is improperly classifying your regular occupation, or if you are having any other problem with your disability claim, contact one of our disability attorneys at Dell & Schaefer. We offer a free consultation and serve clients in all parts of the United States.