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Overlaps and Gaps in Coverage: E.D.Pa.

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  • Overlaps and Gaps in Coverage: E.D.Pa.

    In a recent case out of Pennsylvania, the Plaintiff encounters difficulty in having his STD benefits approved during a time in which two insurance companies may be liable:

    From December 1, 2015 until mid-2016, Plaintiff was an employee of Anexinet Corporation (“Anexinet”), who provided Plaintiff with a disability insurance plan governed by ERISA and sponsored by third-party insurers. Lincoln was the plan’s sponsor prior to March 1, 2016, and Aetna sponsored it from March 1 onward. The terms of the Aetna policy are described in a “Booklet-Certificate” that Plaintiff attached to his Amended Complaint.3 The policy offered short-term and long-term disability benefits. (Am. Compl. ¶¶ 1–3, 7–16.)
    On February 26, 2016, Plaintiff alleges that he “went out of work with severe anxiety and depression, and exacerbation of his bi-polar disorder.” He “was non-functional to the point of not being able to leave his home.” On March 4, 2016, Plaintiff was admitted to a treatment center. Since then, Plaintiff has been under the ongoing supervision of a physician. At the time Plaintiff filed his Complaint, he was still unable to work. (Id. ¶¶ 17–21.)
    On March 4, 2016, Plaintiff applied to Aetna for short-term disability benefits. Aetna denied coverage because it concluded that Plaintiff’s disability started on February 26, 2016—the day of his first absence from work—four days before the Aetna coverage period began on March 1, 2016. Plaintiff then applied to Lincoln, which also denied coverage, based on, among other reasons, its conclusion that Plaintiff’s disability did not begin until March 4, 2016, the date Plaintiff first sought treatment. This date was four days after the Lincoln coverage period ended on February 29, 2016. (Id. ¶¶ 25–29.)
    It should be noted that the Plaintiff never applied to either company for LTD benefits. While it would have been interesting to see the court's reasoning with respect to which "date of disability" is controlling, as this was a 12(b)(6) motion, the court simply held:

    Aetna first argues that it is undisputed that Plaintiff’s disability began on February 26, 2016, putting the disability outside of Aetna’s coverage period, which did not start until March 1, 2016. Plaintiff counters that the first date on which his condition met the definition of a “disability” under the policy is a factual issue that cannot be resolved on a motion to dismiss.
    Plaintiff and Aetna both rely on the Booklet-Certificate for the definition of a covered “disability.” (Am. Compl., Ex. D.) The Booklet-Certificate defines a disability as being “not able [to] perform the material duties of your own occupation because of an illness or injury.” (Id. at AETNA 00237.) “Illness” an “injury” are themselves defined terms, as is the meaning of being unable to perform the material duties of one’s own occupation. Although the Amended Complaint raises a possible inference that Plaintiff became disabled on February 26, 2016, that is not the only inference that can be drawn from these facts. Plaintiff was not treated until March 4, 2016, and Lincoln determined that his disability did not begin until that date. (Am. Compl. ¶¶ 19, 29, 32.) Additionally, Plaintiff’s Social Security disability began on March 4, 2016. (Id. ¶ 24.) These facts raise an equally plausible inference that Plaintiff’s condition did not become a “disability” until after the start of the Aetna coverage period, either because it was not an “illness” or “injury” until that time or because Plaintiff was still capable of performing the “material duties” of his job.
    When more than one inference can be drawn from a pleading, it is premature to resolve the conflict on a motion to dismiss. Connelly v. Lane Constr. Corp., 809 F.3d 780, 790–91 (3d Cir. 2016). Because Plaintiff plausibly alleges that he is disabled and that his disability is covered by the Aetna policy, Plaintiff’s Amended Complaint will not be dismissed for failure to allege a disability beginning within the coverage period.
    The court then goes on to discuss the "active work" requirement, as well as futility of exhausting administrative remedies. As mentioned above, however, the court ultimately denies the motion. The entire opinion is attached below.
    Attached Files