Published
This month’s Friday Five covers recent decisions on supplementation of the administrative record, offset of dependent benefits, full and fair review of claim for benefits, and timing of benefits determination, as well as an update from a case discussed in the June Friday Five relating to an insured earnings calculation.
The Saul Ewing ERISA Litigation Team
- Southern District of New York agrees with insurer’s calculation of insured earnings. The June 2025 Friday Five highlighted a case in which the court determined the term “earnings” in the long-term disability (“LTD”) policy at issue was broad enough to include K-1 earnings. Since that time, the parties were unable to agree on the insured earnings calculation—which were to be calculated “as of March 1, 2015”— among other issues, resulting in a bench trial. Regarding the calculation of insured earnings “as of March 1, 2015,” the insurer based the calculation on the plaintiff’s 2014 tax returns. The plaintiff, on the other hand, argued the calculation should include his earnings in January and February 2015. The court agreed with the insurer. The plaintiff’s K-1 earnings varied in amount during different months of the year and the plaintiff did not submit his monthly K-1 earning information for 2015. For these reasons, the court determined the insurer could not simply “extrapolate” the earnings for January and February 2015 as the plaintiff insisted. Therefore, there was no basis for including earnings for January and February 2015 in the calculation. Rappaport v. Guardian Life Ins. Co. of Am., No. 1:22-CV-08100 (JLR), 2025 WL 2694252 (S.D.N.Y. Sept. 22, 2025)
- Western District of Louisiana precludes plaintiff from supplementing administrative record. In this case, the court considered whether the Fifth Circuit’s holding in Vega v. National Life Insurance Services., Inc., 188 F.3d 287 (5th Cir. 1999), permitted the plaintiff to supplement the administrative record with 582 pages of additional medical records even though she did not provide those records to the insurer until almost nine months after the final decision on her appeal of LTD benefits denial. In Vega, the Fifth Circuit held that “the administrative record consists of relevant information made available to the administrator prior to the complainant's filing of a lawsuit in a manner that gives the administrator a fair opportunity to consider it.” 188 F.3d at 300. Here, however, the Western District of Louisiana reasoned that Vega cannot be broadly applied to re-open or supplement the record after a beneficiary exhausts their administrative appeals, and foreclosed the plaintiff from supplementing the record with additional medical files. Further, the court was not persuaded by the plaintiff’s argument that she was not represented by counsel during her administrative appeal, explaining that there is no distinction under ERISA between a beneficiary who pursues their claims pro se and one represented by counsel. Nelson v. Reliance Standard Life Ins., No. 6:24-CV-01307, 2025 WL 2811123 (W.D. La. Sept. 30, 2025)
- Middle District of Pennsylvania determines insurer properly offset dependent benefits from LTD benefits. The plaintiff brought this action individually and on behalf of her minor son and her deceased husband to recover benefits she alleged were wrongfully denied. Particularly pertinent were the plaintiff’s allegations that the insurer improperly reduced her husband’s LTD benefits by offsetting them against her son’s dependent benefits. The court disagreed. It found that, even though the dependent benefits are the property of the dependent, that does not affect the propriety of the offset to the parent’s benefits. Nor does such an offset violate public policy set by the Social Security Act. Accordingly, the court granted the insurer’s motion to dismiss the plaintiff’s claim alleging improper offset of LTD benefits and the related claim for breach of contract. However, the court permitted the plaintiff’s claims for breach of fiduciary duty under ERISA section 502(a)(3) and for wrongful denial of benefits under section 502(a)(1)(B) to proceed, noting that whether those claims are duplicative and whether relief is available are questions that must be determined after discovery at the summary judgment stage. Pitsko on behalf of Pitsko v. Gordon Food Servs., Inc., No. 3:24CV1055, 2025 WL 2627694 (M.D. Pa. Sept. 11, 2025)
- District of Maryland dismisses cause of action for failure to provide full and fair review of plaintiff’s claim for LTD benefits. Following a denial of benefits, the plaintiff commenced a civil suit for (1) failure to provide LTD benefits; (2) failure to provide a full and fair review of the claim; and (3) failure to provide life insurance benefits. The insurer moved to dismiss the second cause of action, which was based on the claims procedure outlined in § 1133 of ERISA requiring a “full and fair review” of a claim for benefits. The court agreed with the insurer that there is no private right of action under ERISA § 1133. Additionally, the court held the plaintiff could not state a claim under ERISA § 1132 for a violation of § 1133 because the complaint sought relief for plaintiff’s personal benefit rather than relief on behalf of the plan. As such, the court granted the insurer’s motion to dismiss the plaintiff’s second claim. Blackett v. UNUM Life Ins. Co. of Am., No. CV 1:24-2259-CDA, 2025 WL 2781544 (D. Md. Sept. 30, 2025)
- Southern District of New York concludes an insurer’s 45-day extension was appropriate and “diligence should not be penalized.” Plaintiff, a corporate finance attorney, received short-term disability (“STD”) benefits following a car accident. When her STD benefits expired, however, the insurer determined she could perform the material duties of her occupation and thus, she was not eligible for LTD benefits. The plaintiff filed suit and argued that, notwithstanding the discretionary authority provided by the LTD policy, the court should apply a de novo standard of review to the insurer’s denial of LTD benefits, asserting the insurer failed to comply with several of the Department of Labor’s claims procedure regulations, including failure to (i) consult with qualified medical reviewers; (ii) provide for an impartial review by independent reviewers; and (iii) render a timely decision in light of a 45-day extension the insurer granted itself. The court summarily addressed the first two arguments and focused primarily on the plaintiff’s third argument pertaining to the timeliness of the insurer’s decision and appropriateness of its extension. Citing 29 C.F.R. § 2560.503-1(i)(1)(i), the court explained that the determination of whether the circumstances warrant an extension is in the plan administrator’s sole discretion. It reasoned that the insurer’s extension was appropriate here because additional time was needed for a full, good faith examination of the plaintiff’s claims, stating “[i]t is crucially important for institutions to work properly, and to be allowed time to do so.” Grounded in this logic, the court declined to review the denial of LTD benefits de novo. Instead, it applied the arbitrary and capricious standard, found the insurer’s decision to deny the plaintiff’s LTD claim was not “without reason, unsupported by substantial evidence or erroneous as a matter of law,” and granted the insurer’s motion for judgment. Pistilli v. First Unum Life Ins. Co., No. 24 CIV. 5266 (AKH), 2025 WL 2814714 (S.D.N.Y. Oct. 3, 2025)
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