What does it mean to not be able to "engage in a gainful occupation"? Long-term disability (LTD) policies typically define "disability" in one of two ways. In an "own occupation" policy, you're disabled and entitled to long-term disability benefits if you have a medical condition that prevents you from performing the duties of your own occupation. "Any occupation" policies define disability more narrowly, as the inability to work in any gainful occupation for which you are reasonably suited, considering your education, training, and experience. In other words, if you can work in any gainful occupation, you'll be denied benefits.
Many LTD policies shift from requiring that you can't work in your "own occupation" to requiring you to be unable to work in "any occupation" after a certain period of time, often 24 months.
What does it mean to be unable to perform "any gainful occupation" for which you are "reasonably" suited? Who makes this decision, and based on what evidence? This article aims to remove some of the mystery from these poorly understood provisions of "any occupation" LTD policies.
What Is a "Gainful" Occupation?
In general, a "gainful" occupation is one that is able to provide you with at least 60% of your pre-disability wages. What this means is that, before an insurance company denies a disability claim (or terminates disability benefits) under an "any occupation" plan, the insurer must demonstrate that the insured, considering his educational and vocational history, can reasonably perform some job that would pay him 60% of his prior earnings.
The 60% figure is typical but not universal, so be sure to check the specifics of your policy. Some policies will pay out if you have a 20% or higher loss in earnings, meaning that a gainful occupation is one that provides you with at least 80% of your pre-disability wages.
Consider the case of a plastic surgeon who contracts a disease that causes tremors in her hands. Assuming her condition was documented by medical evidence, she would almost certainly be found to be disabled under an "own occupation" policy, as the job of surgeon requires fine motor skills. Whether she would qualify for benefits under "any occupation" plan is a more difficult question, one that depends upon her prior salary, her ability to perform other jobs, and how much she could expect to earn at those jobs. If the surgeon's pre-disability earnings were $300,000 per year, her insurer would have to show that she reasonably could earn at least $180,000 per year (60% of $300,000) at another occupation before denying her claim.
What Does "Reasonably Suited" Mean?
You must be reasonably suited to perform a gainful occupation, based on your location, your skills, your education, and your limitations. As used above, the word "reasonably" is open to interpretation, as is the case so often in law. Here are a few factors that could make an occupation "unreasonable" for you to perform:
- Few or no positions within that occupation exist within a reasonable commute of your home.
- The job requirements are beyond your skills or educational level. (Note that while you can't reasonably perform a job for which you're underqualified, the fact that you might be "overqualified" for a job will rarely be considered.)
- The job wouldn't allow you to attend regular medical appointments.
- Your doctor has not released you to perform the required tasks of the position.
Who Decides Whether You Could Work at Another Occupation?
LTD insurers often work with vocational experts (VEs) to establish that there are "other jobs" out there that individuals can perform, and the compensation associated with those jobs. A VE is an individual well-versed in the specifics of the labor market and often has experience placing disabled individuals in occupations. They rely on a number of sources for their opinions, including the Bureau of Labor Statistics, the (outdated) Dictionary of Occupational Titles, and surveys of employers.
As with medical and many other kinds of "experts", vocational experts often disagree with one another. With occasional exceptions, a VE employed by an insurance company is more likely to find that a disability applicant could obtain gainful employment. Attorneys who handle LTD cases frequently hire their own VEs, many of whom have biases in the opposite direction.
An experienced disability attorney will be adept at cross-examining a VE who works for the insurance company (via written interrogatories or a deposition). Likewise, a disability attorney can elicit helpful testimony from a VE who is favorable to your case.
Although VE testimony can be critical to whether you are granted or denied benefits, ultimately it is the claims administrator at your insurance company or the plan administrator who makes the final decision as to whether your claim is approved or denied. While many claims administrators will be more likely to credit the insurer's VE than the one a disability attorney hires and deny you benefits, having favorable VE evidence in the administrative record is crucial on appeal, especially if you plan to file suit in federal court.