You already know that most ERISA plans require an assessment, say after 24 months, whether the claimant can perform “any occupation.”
This review usually involves a Vocational Assessment examining what “other occupations” and earnings are available given the claimant’s education, skills and experience.
HOT TIP: Courts are placing higher burdens on vocational experts when establishing what “other occupations” the claimant can assume.
For example, using median wage data may not be sufficient in certain circumstances.
Here’s the case of Flaaen v. Principal Life Insurance Co., 2017 WL 4286358 (W.D. WA, September 27, 2017)(attached)(“[T]he term ‘gainful occupation’ requires an evaluation of the insured’s actual employment prospects and wages based on his current experience and qualifications.”)
FACTS: Flaaen, a truck driver, received ERISA-governed disability benefits for years. While disabled, Flaaen earned a university bachelor’s degree in “Art/Media Culture”. After paying disability benefits for seven years, Principal Life sought to determine whether Flaaen could perform the “substantial and material duties of any Gainful Occupation” at an amount of $47,124. A vocational assessment determined he could perform jobs in the public relations and graphic design field, earning in excess of $50,000. Consequently, Principal discontinued benefits. Flaaen sued after an unsuccessful appeal. The Court applied de novo review.
ISSUE: Whether the Vocational Assessment supported the conclusion that Flaaen could perform “any Gainful Occupation”?
DISTRICT COURT HELD: NO—Flaaen was entitled to reinstatement of benefits.
- The Court rejected Principal’s argument that “an occupation is gainful even if the claimant would not be able to earn median/mean wage upon starting.” Op. at 12.
- “[C]hoosing the median wage of every professional is an arbitrary heuristic because it in no way relates to the experience or qualifications of the specific insured.” Op. at 14 (Emp. added).
- The record did not support the vocational assessment that Flaaen was qualified for either job suggested by the report. Principal also failed to show that the report was used by “experienced job experts”. Op. at 16.
- Principal’s vocational assessment failed to offer an opinion on Flaaen’s earning capacity. Op. at 18.
- Flaaen presented persuasive evidence he would earn only in the 25% percentile of certain occupations due to his inexperience. Principal’s mere reliance on Flaaen’s social media profiles and listed job titles was insufficient to support a conclusion that Flaaen had relevant job experience. Op. at 18-19.
KEY TAKE AWAY: This is another example of how the standard of review will affect the outcome. Come up with a plan to make your vocational assessments more defensible.