First Circuit Holds Significant Risk of Relapse into Substance Dependence Can Constitute Current Disability Under Long-Term Disability Insurance

An anesthesiologist became addicted to the opioid drugs she administered in her practice. She entered an in-patient substance abuse treatment program. After she was discharged from the in-patient program, she remained under regular medical supervision on an outpatient basis.


Her employer had a group employee benefit plan that included long-term disability (LTD) benefits. The plan was governed by the Employee Retirement Income Security Act of 1974 (ERISA). The anesthesiologist applied for LTD benefits and the insurer approved payment of LTD benefits up until the anesthesiologist was discharged from the in-patient program. The insurer did not approve payment of LTD benefits after her discharge because it did not classify risk of relapse as a current disability. Rather, the insurer considered risk of relapse as risk of a future disability, which was not covered under the policy.


The anesthesiologist sued the insurer. At trial, evidence showed that the plaintiff’s inability to return to work was due to both the physical and logistical exposure to her drug of choice and the likely exacerbation of other triggering conditions. Factors increasing her risk of relapse included denial of her dependence; relapse to alcohol; an obsessive-compulsive personality trait; and a history of major depression, dysthymia, and post-traumatic stress disorder.


The United States District Court for the District of Massachusetts found the insurer’s termination of benefits unreasonable and awarded the maximum allowable LTD benefits under the plan to the plaintiff. The court explained that a denial of benefits premised on the ground that an LTD plan does not cover future risk generally or treats physical and psychological future risks differently, absent language allowing such distinctions, is arbitrary and capricious.


The First Circuit United States Court of Appeals held that, in an addiction context, a risk of relapse can be so significant as to constitute a current disability, affirming the district court. Under the employer’s plan, the insurer did not exercise its discretion reasonably in terminating the plaintiff's benefits on the ground that risk of relapse cannot constitute a present disability.

The risk of relapse was not expressly excluded by the language of the plan. The insurer concluded the plaintiff could not be disabled after her release from in-patient treatment because she was not still experiencing the effects of opioid dependence. This carved out an exclusion from the plan’s coverage that the plan itself does not contemplate. Plans governed by ERISA must expressly state any exclusions. If the plaintiff followed the decision of the insurer and returned to work as an anesthesiologist following her discharge from in-patient care, not only would she be at risk of relapsing, her patients would be in grave danger.


See: Colby v. Union Sec. Ins. Co. & Management Co. for Merrimack Anesthesia Associates Long Term Disability Plan, 2013 WL 174419 (C.A.1 (Mass.), January 17, 2013) (not designated for publication).