These recent court decisions are provided to keep you up to date with the many challenges and changes faced by Long Term Disability Insurance Benefits policyholders. If you have any questions or would like to learn more about these decisions, or to discuss your own situation, we encourage you to contact us at contact us by calling at 1-877-LTD-CLAIM (1-877-583-2524) or click here to send us an email.
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The United States Supreme Court decision on Met Life v. Glenn was the most significant decision of the past twenty years. This case is expected to open doors to claimants whose claims were unjustifiably terminated or denied.
The Court held that an insurer’s conflict of interest must be considered in evaluating whether the decision on the claim was an abuse of discretion.
Court Compels Met Life to Produce Significant Discovery
The First Case Using Met Life v. Glenn is from Frankel & Newfield.
A District Court judge in New York has granted our application to compel discovery against Met Life, including depositions and significant documentation likely to uncover the relationship between Met Life and the doctors they regularly employ to deny and terminate claims.
The Court embraced the need to conduct this discovery to appreciate and fully outline the impact of Met Life’s conflict of interest as the single entity that pays and decides claims. This is the very first case embracing the changes from Glenn.
Court finds Plaintiff is Disabled from Chronic Back Pain
A recent decision determined that a claimant with chronic back pain should receive ongoing disability benefits, as she was disabled from any occupation. The Court embraced the support from the claimant’s treating physician, noting the longstanding nature of the patient-physician relationship, and the findings from Social Security of disability.
The Court rejected Prudential’s argument that the claimant could perform sedentary work and acknowledged the subjective complaints that the claimant provided. Interest and attorneys’ fees were also awarded by the Court.Ready To Talk?
Court Determines that Chronic Fatigue Patient was Still Disabled
A victory for chronic fatigue claimants came when a Federal judge held that Hartford’s claim determination must be overturned, finding that a claimant remained disabled from her ability to perform the duties of any occupation. The Court rejected Hartford’s transferable skills analysis and labor market survey, rejected the opinions of its paid medical.
Evaluator, and embraced the limitations in functionality that were provided by the claimant’s treating physician.
The Court found that Hartford failed to credit reliable reports from the claimant’s doctor, and improperly ignored the findings of disability from Social Security. Interest and attorneys’ fees were also awarded.
Court Favorably Impacts Limitation for Pre-Existing Conditions
Claimants facing a potential exclusion of coverage based upon a pre-existing condition were provided with support when the New York Court of Appeals held that any such limiting provision would only serve to toll the time in which a claimant with a pre-existing claim could receive coverage.
The Court rejected Met Life’s argument that any pre-existing condition would bar coverage, and instead held that a claimant would secure coverage following the waiting period imposed for pre-existing conditions.Ready To Talk?
Court Finds CIGNA’s Claim Decision Arbitrary and Capricious
A victory for the pursuit of physical disability claims, with secondary depression, occurred, when a Court determined that the claimant, who suffered from a myriad of impairments, including heart disease, sleep apnea and depression, was disabled from a physical condition, which exacerbated his depression. The Court held that the conditions were in concert with each other, and determined that the decision to deny the claim must be overturned.
The Court held that the claim handling was "perfunctory and superficial" and was not in good faith. Attorneys’ fees and costs were also awarded.
Court Criticizes Prudential’s Reliance upon Paper Review
A recent decision supports the attack upon paper reviews and the reliance by insurers upon such reports. In this case, the paper reviewing doctor failed to consider a plethora of functional impairments, providing an opinion that lacked substantial credibility. The Court found that the subsequent review by Prudential lacked credibility because it relied upon the flawed opinion of the paper review.
The Court held that Prudential could not adequately support its contention that the medical records supported a return to work finding.
Court Finds Impairment from Fibromyalgia Supports Disability.
Another victory for the fibromyalgia community, when a Federal Judge found the termination of benefits to be wrongful, and reversed the decision.
The claimant had been granted Social Security and had the support of her treating doctor. The Court found compelling support from the claimant’s family and co-workers, and chastised the determination that the claimant had sedentary work capacity and for failing to consider the co-morbid impact of the myriad conditions suffered by the claimant.Ready To Talk?
Supreme Court Recognizes Problem with Claims Review Structure
In 2008, the United States Supreme Court issued a long awaited decision in Met Life v. Glenn that will have a major impact on denial of claims cases. The Supreme Court was asked how to consider the fact that an insurer that is also an employer in a self-funded plan has a financial conflict inherent in its dual role as the entity which decides eligibility and, at the same time, functions as the entity that pays benefits. This “structural” conflict of interest has always existed, but had previously been considered differently by the varying Circuit Courts throughout the country. In New York, previously the plaintiff was compelled to demonstrate that this conflict “actually influenced” the claim handling.
This decision may well prove to be the most significant decision on ERISA law in the past twenty years. While it is not yet clear how the Court’s decision will be used in individual cases, we are pleased that an authority as high as the United States Supreme Court has recognized this conflict of interest.
As a result of Glenn, insurers’ conduct will become more heavily scrutinized and the playing field more level, since now claimants will be better able to compel consideration of an insurer’s dual role and the Courts will be forced to take the conflict of interest into account when deciding whether the administrator “abused its discretion” in reaching its claim decision.
Court Permits Discovery in ERISA LTD Case
A federal court recently permitted an ERISA LTD plaintiff to conduct discovery to determine whether the plan administrator operated under a conflict of interest, was biased and whether plaintiff was denied due process in the context of the claim for benefits. The court, relying upon Supreme Court authority, held that these issues were relevant to determining whether the decision to deny benefits was arbitrary and capricious.
Court Holds Trial, Finds Claim Determination Unreasonable
A court recently held a bench trial in an ERISA LTD case, taking testimony from live witnesses, and held that the termination of benefits by the insurer was improper. The court held a trial after permitting significant discovery into the claims practices of the insurer.
Claim Decision Not Reasonable Where Insurer Refused to Credit Claimant’s Reliable Evidence
A judge reversed a claim determination by an insurer where it refused to credit the claimant’s reliable evidence, shut its eyes to available evidence and refused to ask for information it felt was necessary to deciding the claim. It was held that the insurer’s conduct was tainted by a conflict of interest, and the court reinstated benefits and awarded prejudgment interest.
Second Circuit Clarifies Standard of Review Issues
The Federal Appeals Court for New York actions recently issued a decision clarifying the standards for claimants to have denied or terminated claims reviewed by a court. Upholding a decision against an insurer, the appeals court explained that courts should evaluate the insurer’s conflict of interest as evidence to support a conclusion that the decision should be reviewed with less deference to the insurer. Such a conflict alone, however, may not be enough; rather, other claim handling issues may need to be demonstratedReady To Talk?
Court Holds Insurer’s Conduct Arbitrary Where Insurer Ignored Findings of Treating Physician
A federal court has provided claimants with hope even in the face of the U.S. Supreme Court’s recent decision allowing insurers to refuse to accept the treating physicians’ opinions. The court granted judgment to a claimant and addressed an insurer’s obligations to at least consider the reliable evidence of a treating physician.
Conflict of Interest Discovery Permitted
A recent decision by a federal judge permitted a claimant to access discovery concerning the insurer’s conflict of interest which might affect the degree of deference the court would provide in reviewing the claim decision.
Court Provides Broad Interpretation of Relevant Documents
A federal appeals court has held that the scope of plan documents to which a claimant is entitled upon receipt of an adverse benefit determination of a disability claim is broad. The court held that training materials, manuals and other internal database material were "relevant" as that term is defined in ERISA’s governing regulations. Such materials are relevant so that a claimant can receive a full and fair review of a claim and to allow for the claimant to ensure that the claim was treated consistently with other claims.
Failure to Consider Impact of Medications Deemed Arbitrary and Capricious
In a recent case, an ERISA governed long term disability insurer failed to consider the effects of narcotic medications on the claimant’s ability to perform his occupation. Citing other court precedent, the judge ruled that the insurers’ reliance upon a medical examination that failed to discuss the effect of these medications rendered the decision to terminate long term disability benefits, which had been paid for 24 months, was arbitrary and capricious. Thus, the Court reinstated benefits, and granted costs and attorneys’ fees.Ready To Talk?
Insurer’s Reliance Upon Surveillance and Activity Logs Deemed Arbitrary and Capricious
A federal judge recently granted judgment to a claimant whose claim was terminated as a result of the insurer’s reliance upon surveillance evidence and activity logs, where the insurer ignored the claimant’s significant medication usage to combat her severe and chronic pain issues. The judge criticized the insurer for its reliance upon nurse reviews of the medical evidence and the refusal to acknowledge the claimant’s significant limitations.
Impact of Medications on Ability to Work Must be Considered
Another Court recently imposed costs and attorneys fees against a long term disability insurer, finding the denial of long term disability benefits to be arbitrary and capricious where the insurer failed to properly consider the impact of medications on the insured’s ability to perform his job. The Court held that an award of costs and fees would deter insurance companies from ignoring the effect of daily doses of potent medication on a person’s ability to work.
Failure to Consider Occupational Stress Arbitrary and Capricious
Another Court recently also determined that a long term disability insurance company improperly denied a claim for long term disability benefits where it acted in a self serving manner and failed to consider the effects of occupational stress on the ability to perform a job. The Court held that prior case law supported the conclusion that a future risk to a claimant’s health can qualify as a present disability and that it is a basic tenet in insurance law that an insured is disabled when the activity in question would aggravate a serious condition affecting the insured’s health. The Court noted that the insurer acted in a self serving manner by focusing only on portions of medical reports favorable to its position, while ignoring substantial evidence supporting disability.
IME Report Lacks Credibility
A Court recently held that a long term disability insurance plan determination was arbitrary and capricious because it relied upon a supplemental report of a physician whose opinion of no disability became more definite after his initial report, without justification for the change in opinion other than a telephone call with the insurer.
The Court reinstated the claimant’s long term disability benefits, discounting the physician’s supplemental report and finding that the opinion of the physician that the insured could possibly return to work under certain limited circumstances was contrary to the overwhelming evidence supporting the insured’s disability.
Denial of Benefits Arbitrary where Risk of Future Occupational Stress Ignored
A Court recently determined that a long term disability insurer acted in an arbitrary manner where it failed to consider evidence that further occupational stress would result in further cardiac problems. The insurer relied upon the results of an exercise stress test to deny the claim. The claimant had submitted medical records from his treating cardiologist indicating that his blood pressure was elevated when working but under control after he stopped working. The insurer failed to consider such evidence, relying instead only on the information favorable to its denial determination.Ready To Talk?
Procedural Defects in Claim Handling Render Claim Arbitrary and Capricious
A recent decision held that a long term disability insurer’s failure to follow ERISA’s guidelines rendered its decision to deny long term disability benefits arbitrary and provided the claimant with an opportunity to submit a further appeal of the decision. The insurer’s denial letter failed to set forth a description of any additional material or information necessary for the claimant to perfect the long term disability claim and an explanation of why such material is necessary. Instead, the insurer simply indicated that the claimant should submit any new, additional information to support his claim for long term disability benefits.
The Court held that "such a blanket request" for additional information failed to satisfy the regulatory requirement, thus rendering the determination arbitrary and capricious.
Insurer’s Procedural Irregularities Render Claim Decision Improper
A federal appeals court recently remanded a claim to the claims administrator to re-open the administrative record and consider information which it failed to consider during the claim. The court noted that a claims administrator has a duty to develop a claimant’s record to arrive at an appropriate claim determination.
Insurer’s "Pick and Choose" Approach Deemed Arbitrary
A court recently overturned a claim denial and reinstated benefits where the insurer, in reviewing the claim, refused to credit the claimant’s reliable evidence, including opinions of treating physicians, and where the insurer’s review of the evidence was selective use of information and documentation. The Court that the inherent conflict of the insurer as claims decided and claims payor influenced the decision to deny benefits.
Insurer’s Denial Reversed Where Denial Based upon Self-Reported Symptoms
A court recently reversed a long term disability insurer’s denial of benefits where the decision was based upon the claimant’s inability to provide a definitive diagnosis for the self-reported symptoms. The court held that the insurer had impermissibly required the claimant to provide "clinical evidence of etiology" where the Plan did not have that requirement. The court also determined that the insurer was required to consider the subjective complaints of the claimant.
Court finds Conduct Arbitrary in Failing to Consider Subjective Evidence
Another court found an insurer’s conduct arbitrary and capricious where it refused to consider the subjective evidence submitted by the claimant in support of her disability due to fibromyalgia. The court noted the elusive nature of diagnosing fibromyalgia, and found the insurer’s requirement of objective medical evidence to be arbitrary. Thus, the claimant was awarded all past due benefits plus interest and placed back on claim with the insurer.Ready To Talk?
Court Finds Good Cause to Admit Evidence Beyond the Administrative Record
A judge recently clarified prior precedent concerning the limited circumstances where evidence beyond the administrative record is admitted in an ERISA long term disability action. The Court held that where the insurer both pays and decides the claim, that conflict of interest can support the application to submit evidence beyond the administrative record to the court reviewing the decision of the insurer.
Court Refuses to Allow Insurer to Apply Pre-Existing Limitation on Coverage
An appellate court has reversed the decision of a federal judge that had dismissed an ERISA LTD action, holding that the insurer could not avoid coverage based upon the pre-existing condition limitation in the policy. The insured had received medical care during the relevant "look back" period for pre-existing analysis, but the treatment was for an undiagnosed condition. When the condition was later diagnosed, the insurer attempted to apply the pre-existing limitation, and denied coverage.
Court Employs Contra Proferentem to Deny Pre-Existing Limitation on Coverage
A federal judge recently overturned a denial of a long term disability claim which was based upon a pre-existing limitation clause in the policy. The court held that applying the limitation to medical treatment rendered during the relevant period where no diagnosis made was contrary to the terms of the policy. Coverage was reinstated and eligibility restored.
De Novo Standard Applies Where Insurer Failed to Render Timely Decision on Claim
A court has determined that where the insurer fails to issue a claims determination within the required period of time, the court will review the claim on a de novo basis. The court held that the failure to issue a decision constituted a failure to exercise discretion, thereby allowing the court to invoke its own discretion in rendering a claim determination.Ready To Talk?
Insurer’s Claim Determination Reversed Where Claim Supervisor Improperly Overruled Claim Determination by Claims Specialist
A federal judge recently reversed the denial of a fibromyalgia claim by a long term disability insurer when the insurer refused to approve benefits, even where the claims specialist who had reviewed the claim recommended approval. The claim supervisor who reviewed the recommendation overruled and determined that the claimant failed to sufficiently document impairment. The court determined that the decision was arbitrary and capricious and granted judgment to the claimant.
Insurer Chastised for Using DOT for Occupational Analysis
A court recently reversed a claim decision denying benefits where the insurer relied upon the Dictionary of Occupational Titles ("DOT") in determining the material and substantial duties of the insured’s occupation. The court took issue with this approach and found that it was inappropriate not to address the insured’s actual work duties, relying instead upon a generic occupational description.
Jason Newfield is a founding partner of the disability insurance law firm Frankel & Newfield. He has spent the majority of his legal career advocating for the rights of disabled workers. He has lectured other professionals, worked on a Federal Advisory committee, and published many articles in the field of disability insurance claims and litigation.
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