Why Employers Must Do Their Own Medical Follow-Ups

Brian, August 30, 2019

What should an employer do when disability benefits have been denied but the employee says they’re still too sick to work?

One of the most challenging issues that human resources needs to address, and on which we advise as employment lawyers, is managing employees’ medical absences. When our employees claim disability benefits, we often breathe easier. We know that an independent third party, with expertise at evaluating medical claims, will review the employee’s medical information and give us an accurate assessment of whether they’re able to work or not. If they say the employee should return to work, we want to trust them.

The courts, however, have consistently held that employers cannot rely solely on their insurer. The recent decision of Nagpal v. IBM Canada Inc. is only the most recent example of an employer getting in trouble for failing to do their own follow-up when an employee claims to be too sick to work.

Vinay Nagpal had been employed with IBM for more than 23 years when he commenced a mental health leave of absence. He was initially approved for short-term disability (STD) benefits.

During the summer of 2013, the insurer asked for more information from Vinay’s medical team to continue approving his benefits. Vinay’s psychologist wrote that a return to work would be premature and not recommended. Despite this, the insurer decided that Vinay could return, and his STD benefits were cut off.

IBM, like most employers in this situation, told Vinay that he either had to appeal the STD denial or return to work. Vinay wanted to appeal it, but the insurer told him that to do so, he would have to provide new medical information. Vinay’s doctors said they had no new information to provide.

Vinay hired a lawyer, who advised IBM that an STD appeal was untenable but Vinay was still unable to work. His lawyer said that Vinay did not want to resign. He wanted to return to work once he was able. The lawyer requested that IBM contact him to discuss options.

IBM, however, never responded to Vinay’s lawyer, nor did it ask Vinay for updated medical information. Instead, IBM relied on its insurer’s opinion that Vinay was able to work. Accordingly, IBM sent Vinay a series of letters with ultimatums to return to work. When Vinay continued not to return, IBM declared his employment abandoned.

In these circumstances, Vinay’s wrongful dismissal claim was successful. The court found that he had not abandoned his employment. He was unable to work, but he fully intended to return to work once he was capable of doing so. Furthermore, the court sharply criticized IBM for relying on the insurer’s opinion instead of doing its own follow-up, saying that IBM “should have done more” and could have gotten updated medical information with “minimal effort.”

The lesson for employers: an insurer’s opinion that an employee can return to work is not sufficient to protect the organization. If the employee claims they are unable to work, the employer must follow-up independently. Ask the employee for medical documentation or a functional abilities form, and make an independent assessment. Above all, do not be too quick to accuse an employee of abandoning their employment, especially when the employee has expressed a desire to return to work and a willingness to cooperate with providing medical information.

In addition to protecting the organization from liability, fully committing to the process of gathering medical information and exploring accommodation measures could help an employer, like IBM with Vinay, to retain a valuable, long-service employee.

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