Anita Roodman, Senior Legal and Technical Specialist, at Simeka

In a recent media statement by the National Financial Ombud Scheme (NFO), it was emphasised that a medical report does not automatically entitle an employee for disability insurance.

It often happens that an employee has been dismissed due to incapacity or is medically boarded by their employer, and it is then assumed that if the employer’s doctor has declared the employee disabled for work, the insurer would pay the disability benefit.

However, the employer’s boarding or incapacity process and the application for disability benefits from an insurer in terms of the insurance policy are two distinct processes.

The NFO highlighted two cases where complainants were boarded by their employers, but their disability claims were declined by the insurers because they did not meet the criteria of the policy.

Case 1

A Code 14 truck driver started to lose sight in his right eye and submitted a claim for income disability benefits to the insurer of their group scheme. While undergoing further treatment with a specialist, his employment was terminated by the employer a year later due to ill health.

The claim with the insurer was however declined on the basis that it was not a valid claim according to the policy definition.

In this case, the criteria of the policy required the complainant to be disabled for his own occupation as a truck driver. However, the policy further states that if a member practices a certain type of occupation, such as a driver, pilot, diver, seaman, security person, sportsperson, or performing artists, reference to own occupation will be a reference to any occupation. Any occupation in the policy “means …, any other occupation with any employer in the open labour market which the Employee could reasonably be expected to follow…”

In assessing the claim for any occupation, the insurer acknowledged the complainant’s limitations and that he is restricted in terms of driving the heavy-duty truck. However, the insurer was of the view that he was still able to perform other duties, including driving a light motor vehicle.

The NFO considered the medical facts of the case and questioned whether it was reasonable to expect the complainant, who worked as a Code 14 truck driver for 13 years, to re-enter the open labour market at the age 57 years, and to seek alternative employment with severely impaired vision in the right eye, even though he had functional vision in the left eye, which was also affected by the disease.

In this case the insurer agreed to pay the claim after intervention by the NFO.

The NFO remarked that in deciding on disability claims, insurers have a responsibility to be fair and unbiased. The insurer should consider the individual’s specific circumstances and attributes when assessing a claim.

Case 2

In another complaint that came before the NFO, the complainant was deemed disabled from his job as an underground load driver on a mine by the occupational medical practitioner (OMP) due to a respiratory condition.

In this case the policy criteria required the complainant to be continuously, permanently and totally incapable of engaging in his own occupation or a suitable alternative occupation with his current employer; or unable to fulfil the minimum standards of fitness to perform work at a mine as per the mandatory code of practice.

The insurer noted that his respiratory pathology was mild, and that the complainant was deemed unfit from working underground. No restrictions were placed on him in terms of operating the load driver vehicle. His condition further improved with treatment and his prognosis was considered good. His claim was therefore declined.

The complainant argued that he was declared unfit for work by the mine doctor and that he was therefore entitled to the lump sum disability benefit.

The medical evidence however showed that he met the minimum standards of fitness for working in the mine. The OMP declared the complainant permanently incapacitated and unfit for underground work but fit for surface work. The employer could not offer him an alternative position on the surface due to unavailability of work and proceeded to terminate the complainant’s services.

The NFO agreed with the insurer that the availability of work within the mine and or in the open labour market is not a relevant factor in determining whether a person is disabled in terms of the policy. In this instance the medical evidence did not support that the complainant was permanently unfit to work as a load driver or take up a suitable alternative occupation.

The complaint was therefore dismissed.

While medical reports are crucial evidence, the employer’s medical boarding policy could differ from the criteria used by the insurer for determining eligibility for disability benefits. Even if an employee is medically boarded by the employer, it does not mean that their insured disability claim will succeed.

Insured disability benefits are considered not only as a medical decision but is based on the terms and conditions of the contract entered between the policyholder and the insurer.

ENDS