Contacting the Treating Physician

In most ERISA LTD claims, the insurance company will hire a physician, usually an employee of the insurance company, to review the medical records and give an opinion on the claimant’s functional limitations.  Said physicians are often called “reviewing physicians.”  Generally, the insurance company’s reviewing physician will try to contact the claimant’s treating physician(s).

In Shaw v. AT&T Umbrella Benefit Plan No. 1, 795 F.3d 538 (6th Cir. 2015), the Court made specific note of the fact that the Plan failed “to make a reasonable effort to speak with” the claimant’s treating physicians.  In Shaw, the reviewing physicians attempted to contact the claimant’s treating providers; however, the treating providers were only permitted 24 hours to return the phone call.  The Court noted: “the cursory manner in which the Plan attempted to contact Shaw’s treating physicians is evidence that the Plan’s decision was not ‘the result of a deliberate, principled reasoning process.'”

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Ignoring Favorable Evidence

LTD carriers are not permitted to ignore favorable evidence in a long term disability claim. “A plan may not reject summarily the opinions of a treating physician, but must instead give reasons for adopting an alternative opinion.”  Elliott v. Metro. Life Ins. Co., 473 F.3d 613, 620 (6th Cir. 2006).

Heimeshoff v. Hartford Life & Accident Ins. Co

Yesterday, the United States Supreme Court decided a very important case in the context of ERISA long term disability.  The plaintiff filed a claim for long term disability benefits, which was denied by the Hartford.  Almost three years after the denial, but more than three years after the date proof of loss was due under the Policy, the Plaintiff filed suit.  The Policy contained a contractual statute of limitation providing that suit must be filed within three years of the date proof of loss is required. The case made it up to the U.S. Supreme Court, which held The Plan’s limitation provision is enforceable.  Heimeshoff v. Hartford Life & Accident Ins. Co., ____ U.S. _____, No. 12- 729 (Dec. 16, 2013).  
The Court ruled that unless the contractual limitation period is unreasonably short or there is a “controlling statute to the contrary”, the limitation will be given effect.  In this case, the Court held the 3 year contractual statute of limitation was reasonable. The Court did not preclude the application of equitable tolling, waiver or estoppel.
What remains to be seen is whether LTD insurers will seek to impose a contractual limitation in a scenario where the Plaintiff is approved for two years, and subsequently denied, but unable to file suit within the applicable period of time.  It is difficult to imagine a Court enforcing a contractual limitation in a situation where the claimant is initially approved for a period of time. Nevertheless, the Heimeshoff case opens the door to such arguments. 

ERISA Time deadlines and Standard of Review

Under the ERISA regulations, a plan must issue a benefits determination no later than 45 days after receiving a claim.  The regulations provide for an extension of that deadline, but what happens if the plan doesn’t comply with the 45 day deadline?  It appears the answer depends upon the jurisdiction.

One consequence of the failure to comply with the 45 day deadline is “exhaustion.”  In other words, a claimant is not permitted to file suit in federal court until such time as administrative remedies have been exhausted.  Thus, if a decision is not made by the plan within 45 days, there is authority for the proposition that such a situation constitutes a constructive denial of the claim.  As a result, the plaintiff can bring a lawsuit in federal court. See 29 CFR 2560.503-1.

Once the Plaintiff brings the claim in federal court, what happens?  Normally, disability determinations under ERISA are reviewed by the court under the arbitrary and capricious standard of review.  Interestingly, there is some authority for the proposition that a plan’s failure to comply with the 45 day benefit determination deadline results in de novo review instead of the deferential arbitrary and capricious standard.   Stefansson v. The Equitable Life Assurance Society of the United States, 2005 U.S.Dist. Lexis 21723 (M.D. Ga. 2005) (“because DMS failed to render a benefits determination in accordance with the regulatory requirements, application of the de novo standard of review is appropriate”).  See also: Gilbertson v. Allied Signal, Inc., 328 F.3d 625 (10th Cir. 2003); Jebian v. Hewlett Packard Co., 349 F.3d 1098 (9th Cir. 2003); Kinstler v. First Reliance Standard Ins. Co., 181 F.3d 243 (2nd Cir. 1999); Buck v. Kraft Food Global, Inc., (M.D.Tenn. 2007); Kosiba, 384 F.3d 58 (3rd Cir. 2004). But see: Southern Farm Bureau Life Ins. Co. v. Moore, 933 F.2d 98 (5th Cir. 1993); Hackney v. The Lincoln National Life Ins. Co., 2012 U.S.Dist. Lexis 694 (W.D.Ky. 2012) (de novo determination appropriate in some situations, but Court remanded to insurer for benefit determination).

If you have a long term disability claim governed by ERISA, and the insurer has not rendered a timely decision, it is important that you contact an attorney to discuss your rights.

6th Circuit Standard of Review for LTD ERISA Claims

District court review of a plan administrator’s denial of benefits is normally de novo. Jones v. Metro. Life Ins. Co., 385 F.3d 654 (6th Cir. 2004). However, where a plan fiduciary has discretionary authority to determine eligibility for benefits or construe plan terms, a district court will review per the “arbitrary and capricious” standard. Whitaker v. Hartford Life & Acc. Ins. Co., 404 F.3d 947 (6th Cir. 2005).  The arbitrary and capricious standard is used so long as the plan contains a clear grant of discretion to the administrator to determine benefits or interpret the plan. Perez v. Aetna Life Ins. Co., 150 F.3d 550 (6th Cir. 1998).

The arbitrary and capricious standard “is the least demanding form of judicial review of administrative action . . . . When it is possible to offer a reasoned explanation, based on the evidence, for a particular outcome, that outcome is not arbitrary or capricious.” Perry v. United Food & Commercial Workers Dist. Unions 64 F.3d 238, 241 (6th Cir. 1995).   As a result, a decision will “be upheld if it is the result of a deliberate principled reasoning process, and if it is supported by substantial evidence.” Baker v. United Mine Workers of America Health & Retirement Funds, 929 F.2d 1140, 1144 (6th Cir. 1991).  Substantial evidence is defined as “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.” Consolidated Edison Co. v. NLRB, 305 U.S. 197, 229 (1938).

LTD ERISA Venue

29 USC 1132 (e)(2) provides: “Where an action under this title is brought in a district court in the United States, it may be brought in the district where the plan is administered, where the breach took place, or where a defendant resides or may be found, and process may be served in any other district where a defendant resides or may be found.”

GENERAL:

  • Plaintiff’s choice of forum is entitled to substantial deference.  Hanley v. Omarc, Inc., 6 F.Supp.2d (N.D.Ill. 1998).  However, the Plaintiff’s choice may still be incorrect. Id.
  • The defendant must be subject to personal jurisdiction in the selected venue.

WHERE THE PLAN IS ADMINISTERED:

  • Ret. Funds v. Golden Eagles Architectural Metal Cleaning & Refinishing, 277 F.Supp.2d 291 (S.D.N.Y. 2003)

WHERE THE BREACH TOOK PLACE:

  • The plaintiff’s state of residence can be a proper venue if that is the place where he/she was to receive benefits.  Cole v. Cent. States Southeast & Southwest Areas Health & Welfare Fund, 227 F.Supp.2d 190 (D.C.Mass. 2002); Oakley v. Remy Int’l, Inc., 2010 U.S.Dist. Lexis 10821 (M.D.Tenn. 2010)

WHERE DEFENDANT RESIDES OR MAY BE FOUND:

  • For venue purposes, some courts hold that the corporation resides wherever personal jurisdiction is proper.  Ransom, 820 F.Supp. 1429 (N.D.Ga. 1993). But see Med. Mut. v. DeSoto, 245 F.3d 567 (6th Cir. 2001).

Consideration of Social Security determination in LTD claims

Quite often, a claimant who is receiving long term disability benefits will be required by the insurance company to file for Social Security Disability.  In fact, often the Plan will provide a representative to assist the claimant in obtaining Social Security disability benefits. If SSA awards benefits, the LTD carrier then claims an overpayment of benefits.   More often than not, the claimant is found disabled by SSA around two years after he/she became disabled, which is right around the time period when the LTD definition of disability changes.  I have represented a number of individuals who are approved by SSA for disability, and then denied by the LTD carrier a month or two later.  In the 6th Circuit, the LTD carrier is not permitted to ignore the SSA disability finding.  In situations where the LTD carrier has required the claimant to apply for disability, and receives a financial benefit from an award of SSA disability, a reviewing court will generally take those facts in to serious consideration in determinating when the decision to deny LTD benefits was arbitrary and capricious. Calvert v. Firstar Finance, Inc., 409 F.3d 286 (6th Cir. 2005); Glenn v. Metlife, 461 F.3d 660 (6th Cir. 2006).  As a practical and legal matter, if the LTD carrier requiring the claimant to apply for disability, is assisting the claimant in applying for disability, and receives a financial benefit from the claimant obtaining disability through SSA, the carrier should be estopped from arguing that the claimant is not disabled.

For example, in Raybourne v. Cigna Life Ins. Co. of New York, 2012 U.S.App. Lexis 24018 (7th Cir. Nov. 21, 2012), Raybourne applied for long term disability benefits with Cigna.  He also filed for Social Security disability benefits.  Cigna hired a company to assist Raybourne with his Social Security disability claim. Raybourne’s disability claim was approved by the Social Security Administration; however, just a few months prior to the disability award, Cigna hired a physician to review the file.  Said physician opined that Raybourne was not disabled.  The report from Cigna was never provided to the Judge deciding Raybourne’s Social Security disability claim.  Instead, after Raybourne was awarded social security disability benefits, Cigna “recouped from the back benefits the money the insurer had paid to Raybourne during the first twenty-four months of his disability.”  Even more disturbing is the fact that just three weeks before Raybournes social security disability hearing, Cigna denied Raybourne claim for long term disability.  In other words, Cigna hired someone to argue that Raybourne was disabled, despite the fact that Cigna had denied his claim for private disability benefits just three weeks prior to the hearing.  Cigna denied Raybourne’s administrative appeals, and did not even mention the social security disability finding.  The case went to federal court, at which time the federal judge remanded the claim back to Cigna for consideration of the SSA disability determination.  Cigna then supplied a list of “reasons” for not accepting the disability finding of the social security administrative law judge.  The Court noted the “seemingly inconsistent positions taken by the insurer” that were “financially advantageous to the insurer.”  The Court further noted that Cigna did not produce the report from their doctor to the Social Security Administration, and instead, only used his report “when it was financially advantageous to the insurer.”  Ultimately, the Court concluded: “Cigna’s denial of benefits was not supported by substantial medical evidence but instead was the result of a structural conflict of interest.” The Court also affirmed the award of attorney fees to Raybourne’s attorney.

If you would like to discuss your Social Security and/or Long Term Disability claim, please click here to obtain the author’s contact information.