Disability Payment For Mental Illness Reasonable

January 31, 2007 (PLANSPONSOR.com) - The U.S. District Court of the Eastern District of New York ruled that a benefit plan administrator did not act arbitrarily or capriciously when it calculated the benefit payments due to a woman who claimed she was mentally disabled from witnessing the September 11 terrorist attacks.

Maritza Burgie was on her way to work when the planes crashed into the two World Trade Center towers. She worked in one of the towers as a benefits specialist for Euro Brokers Inc.

She was thrown from the building by the first explosion, witnessed a woman crushed to death by falling debris and a later explosion threw Burgie to the floor of a subway terminal – all of which she claimed caused her mental and physical injuries that required her to stay home from work.

She claimed she was forced to return to work in November 2001 – before she was clinically ready – and then had a nervous breakdown “from the stress of the attacks and her return to work.”

Burgie filed for extended medical leave under the Family and Medical Leave Act (FMLA) and disability benefits after she was diagnosed by a physician as suffering from “anxiety, post traumatic stress disorder and other sequelae,” and was therefore unable to perform her job, according to the opinion.

In March 2002, she received a letter that she would be terminated because she failed to return phone calls, contact the office or advise on her expected return date; however, Burgie claims she and her husband maintained continuous contact with Euro Brokers.

In September of 2002, Burgie filed a claim for benefits from First Unum Life Insurance Co, but her company did not supply the paperwork needed to process the claim. The claim was terminated by Unum in October 2002 and remained closed after she missed the 30-day deadline to request for it to be reopened.

It was only after Burgie sued Unum in February 2005 that the plan administrator obtained the required paperwork and calculated that the maximum disability benefits she was entitled to for mental disability was $6,390.

Burgie claimed that the calculations were incorrect and that she was entitled to more than two years of disability benefits.

According to the opinion by U.S. District Judge Charles Sifton, Unum’s policy spells out that mental illnesses have a limited pay period of 24 months. “Where the written plan documents confer upon a plan administrator the discretionary authority to determine eligibility for benefits or to construe the terms of a plan, a court confronted with such a claim should not disturb the administrator’s ultimate conclusion unless it is ‘arbitrary and capricious.” he writes.

In its opinion, the court said the calculations were correct and that because the diagnosis for Burgie of depression and post-traumatic stress disorder met the American Psychiatric Association’s requirements for mental illness, Unum’s assessment was not arbitrary and capricious.

However, Burgie argued that her illness was also physical, but provided no documentation.

The case is Burgie v. Euro Brokers Inc., U.S. District Court of the Eastern District of New York , No. CV-05-0968,  January 26, 2007.