A recent district court ruling, Funk v. CIGNA Group Ins., 2010 U.S.Dist. LEXIS 90541 (D.N.J., Aug. 31, 2010), offers great insight into the nature of mental illness as it relates to occupational disability.
The claim here arose when Robert Funk became disabled from his job developing computer software for Lucent in 2004 on account of bipolar disorder and major depression. The claim was initially approved based on a finding that Funk was unable to perform the duties of his regular occupation.
However, the disability plan, which was funded by Lucent but administered by CIGNA, required that for benefits to continue beyond one year, the claimant needed to demonstrate an inability to work at any occupation that would pay at least 60 percent of pre-disability earnings.
When the initial year was near completion, CIGNA's reviewing psychiatrist determined that Funk could work "in [a] supportive, low stress, low cognitive demand environment," but did not analyze his earnings potential.
Although Funk was ultimately awarded Social Security disability based on a finding that his psychiatric condition precluded him from working altogether, a second reviewing psychiatrist hired by CIGNA concluded that Funk's depression was under control and that the absence of cognitive impairments enabled him to work.
Applying a deferential standard of review, the court nonetheless overturned CIGNA's finding. Of primary significance, the court pointed out that CIGNA's determination that Funk could work in a low stress, low cognitive demand environment gave no consideration whatsoever to whether he could earn at least 60 percent of pre-disability earnings as the plan required, despite those limitations.
The court thus concluded that while a formal vocational review was not necessary, CIGNA's failure to address a key plan standard was arbitrary and capricious. In addition, the court noted that CIGNA failed to reconcile the Social Security determination with its decision; and the court also criticized CIGNA's emphasis on a conclusion based on Funk's intact cognitive functioning, pointing out:
[S]ignificantly, the CIGNA claims administrator did not appear to understand the difference between cognition, on the one hand, and mental illness on the other, in deciding whether an individual is able to work at a productive level. CIGNA chose to support its decision primarily with the finding that the Plaintiff has intact cognition, without explaining why it gave virtually no weight to the indicators of mental illness reported by Dr. Pinchuck. *14-*15.
The court added in a footnote:
Cognitively, Mr. Funk may have been intact, but his mental and emotional state was described by his treating psychiatrist and psychologist as socially inept, isolating, hopeless and unable to drive himself. CIGNA did not state any reasonable basis to separate and not consider the effects of his mental illness on his cognition in evaluating his ability to perform a job at a certain salary level.
The court also made an interesting observation in footnote 12 of the opinion about CIGNA's conflict of interest despite merely administering a plan without its own funds being at issue:
Per Glenn, if a company is a claim administrator that offers itself to self-funded plans in a competitive market, then its incentive is to keep claims down to be more attractive to potential plans. This is an incentive to over-deny claims, just as if a self-funded plan was paying the claims itself. 128 S. Ct. 2343, 2349-50 ("[F]or ERISA purposes a conflict exists … An employer choosing an administrator in effect buys insurance for others and consequently (when compared to the marketplace customer who buys for himself) may be more interested in an insurance company with lower rates than in one with accurate claims processing.").
Finally, the court looked at CIGNA's counterclaim seeking reimbursement for overpaid benefits due to a Social Security disability award. Because the record showed the plaintiff no longer had the funds in his possession, the court determined that there was no equitable claim stated. However, the court allowed CIGNA to set off the payment due from the funds owed based on the court's award of benefits.
While there were a number of instructive findings in this case, the one that stands out had to do with the analysis of the psychiatric impairment. Both this case and Paterson v. United Parcel Service Flexible Benefits Plan, 2004 U.S.Dist. LEXIS 14119 (S.D.Ind., June 25, 2004) teach the same lesson — not every psychiatric claim is based on a cognitive impairment.
While measured cognitive impairments can be extremely useful in assessing disability, and a determination based on the absence of such findings may facially appear reasonable, such reasoning is often utterly worthless in assessing an affective disorder such as depression, anxiety or bipolar disorder.
In Paterson, the court focused on the psychiatric findings showing the plaintiff's inability to work with others. In such cases, the key findings are those pointed out by Social Security Ruling 85-15, one of many interpretive guidelines promulgated by the Social Security Administration to assist adjudicators in assessing disability claims. The ruling, entitled, "Titles II And XVI: Capability To Do Other Work — The Medical-Vocational Rules As A Framework For Evaluating Solely Nonexertional Impairments," is publicly available at http://www.ssa.gov/OP_Home/rulings/di/02/SSR85-15-di-02.html. In sections relating to the assessment of mental illness, SSR 85-15 points out:
The basic mental demands of competitive, remunerative, unskilled work include the abilities (on a sustained basis) to understand, carry out and remember simple instructions; to respond appropriately to supervision, coworkers, and usual work situations; and to deal with changes in a routine work setting. A substantial loss of ability to meet any of these basic work-related activities would severely limit the potential occupational base. This, in turn, would justify a finding of disability because even favorable age, education or work experience will not offset such a severely limited occupational base.
That ruling also looks at the impact of stress and points out that an intolerance to even routine work stress would also justify a finding of disabled. Hence, the ruling notes:
[T]he skill level of a position is not necessarily related to the difficulty an individual will have in meeting the demands of the job. A claimant's condition may make performance of an unskilled job as difficult as an objectively more demanding job, for example, a busboy need only clear dishes from tables. But an individual with a severe mental disorder may find unmanageable the demands of making sure that he removes all the dishes, does not drop them and gets the table cleared promptly for the waiter or waitress. Similarly, an individual who cannot tolerate being supervised may not be able to work even in the absence of close supervision; the knowledge that one's work is being judged and evaluated, even when the supervision is remote or indirect, can be intolerable for some mentally impaired persons.
These are important factors that have to be taken into consideration by those who adjudicate disability claims. Although the opinion in Funk did not cite these principles or the Diagnostic and Statistical Manual of Mental Disorders, which is the source of SSR 85-15's instructive guidelines, plainly, the court demonstrated a better understanding of the nature of psychiatric illness than the insurer.
