PERA SHORT TERM DISABILITY BENEFIT CASE ARGUED TO THE COURT OF APPEALS

Shawn E. McDermott presented oral argument to a panel of the Colorado Court of Appeals on the appropriateness of Colorado PERA’s (and Standard Insurance Company’s former) administration of the short term disability program, on behalf of three clients whose cases had been consolidate for the appeal.  One of these cases seeks class action certification.  We expect a written decision to be entered within the next one to three months.  The case involves our request that the Court strike subsection E of PERA Rule 7.45 which contains the requirement that a PERA Member show the inability to earn 75% of his or her predisability earnings in some other job as a prerequisite to being entitled to short term disability benefits.  If eligible for PERA STD payments, a PERA Member is entitled to 60% of predisability earnings for up to 22 months. 

It has been our position for several years now that Rule7.45(E) is not consistent with the definition of short term disability found in the statute, C.R.S. 25-41-702(1)(a).  Click here to read prior posts on this issue.  We of course cannot predict how the Court of Appeals will rule, but if the decision is in the favor of the Appellants, then the PERA Rule is revised and the short term disability policy will likely be reformed to remove the “second prong” of the definition.  Moving forward, PERA Members will only have to prove the inability to do their own job in order to be entitled to short term disability benefits, which the statute provides.

We continue to be amazed that Colorado PERA fights our clients on this issue.  In our opinion, the law could not be any clearer, and the way in which the PERA administrator, formerly Standard Insurance Company and now Unum Insurance, is administering these disability claims.