Reliance Standard, as do many disability insurers, has a mental and nervous disorders limitation that restricts payment of disability insurance benefits to 12 months where a claimant's disability is "caused by, " "contributed to by," or "resulting from" mental or nervous disorder. This language imposes a "but for" causation standard the Sixth Circuit held recently in Okuno v. Reliance Standard Life Ins. Co., joining the Fifth, Ninth and Third Circuits in so ruling.
The claimant, Patti Okuno, was diagnosed with narcolepsy, Crohn's disease and Sjogren's syndrome, an autoimmune disorder, after struggling for years with fibromyalgia and degenerative disc disease. Okuno went through a total of three administrative appeals, while the insurance company determined that her disability benefits would be limited to 12 months because of anxiety and depression diagnoses in addition to her physical maladies. The benefits limitation was based on Eventually she filed suit and the district court, Hon. Gregory L. Frost of the Southern District of Ohio, ruled on the administrative record for the insurance company.
Okuno argued that the mental or nervous disorders limitation did not apply where "the evidence establishes that a claimant is 'disabled by physical conditions alone, then the mere presence of a 'psychiatric component' does not justify application of the one-year mental health limitation."
The Sixth Circuit accepted this argument noting the Fifth Circuit's recent observation "that every federal circuit to consider the meaning of phrase 'caused by or contributed to by,' in the Mental or Nervous Disorders Limitation, has read it 'to exclude coverage only when the claimant's physical disability was insufficient to render him totally disabled." This "but for" test led the Sixth Circuit to conclude that "an application is not appropriately denied on the basis that a mental or nervous disorder 'contributes to" a disabling condition; rather the effect of an applicant's physical ailments must be considered separately to satisfy the requirement that review be reasoned and deliberate." This standard joined rulings by the Fifth, George v. Reliance Standard Life Ins. Co., 776 F3d 349 (5th Cir 2015), Ninth, Maurer v. Reliance Standard Life Ins. Co., 500 Fed.Appx. 626 (9th Cir. 2012), and Third Circuits, Michaels v. The Equitable Life Assurance Long-Term Disability Plan, 305 Fed.Appx. 896 (3d Cir. 2009).
