Federal Appeals Court Upholds Unum's Disability Benefits Termination

A federal appeals court has upheld Unum Life Insurance Company of America's decision to terminate long-term disability benefits for a sheet metal fabricator, ruling the individual is capable of performing sedentary work.
The U.S. Court of Appeals for the Eighth Circuit confirmed this judgment on August 28, 2026, resolving a dispute over benefits regulated by federal law. This decision emphasizes the complexities that insurance professionals face in claims management, especially when definitions of disability evolve over time.
In October 2019, the worker sustained a significant shoulder injury, diagnosed as a complete rupture of the long head biceps tendon. Following surgery, Unum approved both short-term and long-term disability benefits, with the latter commencing in April 2020. However, the claim's trajectory changed as the policy defined "disability" differently after the initial 24-month period, from an inability to perform the specific job duties to an inability to engage in any gainful occupation aligning with the individual's skills and experience.
Key to Unum's decision was the treating surgeon's consistent assessments from June 2020 to May 2022. He indicated that the worker could perform sedentary work, which typically involves seated activities and light lifting up to 20 pounds. Despite a change in the surgeon's opinion after April 2022, Unum stood by its termination of benefits, supported by vocational assessments that identified suitable alternative roles such as a production clerk or routing clerk.

• Initial 24 Months: Disability defined as the inability to perform duties of the regular occupation.
• Post 24 Months: Expanded to inability to engage in any gainful occupation.
• Lifting Restriction: Initially light, increased to 20 pounds by December 2020.
• Vocational Findings: Alternative suitable roles identified by vocational consultants.

The district court, undertaking a de novo review, found no clear error in Unum's determination, despite the insurance plan not giving Unum discretionary power in eligibility decisions. This case exemplifies the rigorous scrutiny applied in courts during the claims adjudication process under the Employee Retirement Income Security Act (ERISA), which governs many similar disputes.
For insurance professionals, this ruling underscores the importance of thorough documentation and consistent communication with medical professionals. The case highlights the necessity of understanding regulatory compliance and preparing for potential legal challenges inherent in managing long-term disability claims. As insurers often face scrutiny over discontinuation of benefits, maintaining transparent and robust claims processes is vital to uphold operational integrity.