This month’s Friday Five explores two recent decisions that discuss limitations on benefits when both physical disability and disability arising from mental illness are alleged, whether remand of a claim by the court constitutes a new appeal or a continuation of the previous appeal, whether an order certifying a class action should be stayed pending appeal, and the necessity of remand where a decision terminating benefits did not provide adequate explanation.
The Saul Ewing LLP Employee Benefits/ERISA Litigation Team
- Are benefits appropriately terminated upon expiration of mental illness limitation despite claim of simultaneous physical disability? The plaintiff was receiving long term disability (LTD) arising from his mental illness, which the defendant then terminated when he reached the 24-month mental illness limitation. Under the terms of the LTD plan, the mental illness limitation does not apply when there is a concurrent physical impairment. The plaintiff argued that in addition to his mental illness disability he was suffering from a physical disability and that his benefits were improperly terminated. Applying a de novo standard of review, the court held that the claimant had failed to meet his burden to show the Court that there is “objective evidence that his chronic pain rendered him unable to perform the duties of a gainful occupation,” and that he was disabled based on the physical impairment prior to the termination of his benefits for mental illness. To support his physical disability claim, the plaintiff provided documentation from his three treating physicians. The defendant presented evidence from three physicians that evaluated the plaintiff’s claim and supported the defendant’s decision to terminate LTD benefits. The Court determined that after independently weighing the facts and opinions in the record, the plaintiff did not provide sufficient evidence that his chronic pain rendered him unable to perform the duties of any occupation prior to the expiration of the medical illness limitation. The Court, therefore, denied the claimant’s motion for summary judgment and granted the defendant’s cross motion. Abi-Aad v. Unum Grp., Civil Action No. 21-CV-11862-AK, 2023 U.S. Dist. LEXIS 61492 (D. Mass. Apr. 7, 2023).
- Does a remand constitute a new appeal or a continuation of the existing appeal? The claimant, a radiologist, received LTD benefits based on a diagnosis of nerve damage in her left eye causing a visual impairment. In 2017, after being on claim for approximately ten years, the defendant reevaluated the claim. An IME concluded that the plaintiff was not disabled. Based primarily on the IME, the plaintiff’s LTD benefits were terminated. On appeal, a new IME affirmed the conclusion that the plaintiff was able to work. In 2018, the plaintiff filed suit. The Court granted the plaintiff’s motion and remanded the case so that the plaintiff would be provided an opportunity to rebut the second IME. On remand, the insurer utilized the same doctor to review the plaintiff’s claim who again concluded that the plaintiff was not disabled. The plaintiff again filed suit. Applying an arbitrary and capricious standard of review, the Court affirmed the denial of LTD benefits. Among the issues raised by the plaintiff was a challenge to the defendant’s use of the same doctor on remand. The applicable regulation requires that the health care provider on appeal from an adverse benefit determination "is neither an individual who was consulted in connection with the adverse benefit determination that is the subject of the appeal, nor the subordinate of any such individual." The question, then, was whether the remand created a new appeal, and triggered the requirement for the defendants to hire a new doctor, or merely “continued” the existing appeal? The Court held that if the remand had been given on the grounds of procedural unfairness, it was possible that the remand would constitute a new appeal. But, because the purpose of the remand was to allow the plaintiff to rebut the IME, the remand was “merely to continue the appeal under more fair conditions and there was no requirement that defendants engage with a new doctor.” Macnaughton v. Paul Revere Ins. Co., No. 4:19-40016-TSH, 2023 U.S. Dist. LEXIS 48308 (D. Mass. Mar. 22, 2023).
- Should the district court’s class certification order be stayed pending appeal? Following a motor vehicle accident, the plaintiff applied for and was granted short and then long term disability benefits. The plaintiff had separately filed a civil action against the other party involved in the accident that resulted in the plaintiff receiving monetary compensation. The defendant sought reimbursement of the LTD benefits paid. The plaintiff originally agreed to pay the defendant a portion of the settlement, but then filed suit on the basis that the plan permitted the defendant to obtain reimbursement only for “Other Income Benefits” and that personal injury recoveries were not within the plan’s definition of “Other Income Benefits.” After filing suit, the plaintiff filed a motion for class certification, which was granted. The defendant appealed the class certification ruling and sought a stay of the District Court’s order. The defendant contended that, absent a stay, there would be confusion among the current class members if the class was decertified on appeal, that a stay would conserve judicial and party resources, the failure to grant a stay would cause irreparable harm without causing harm to the plaintiff or class and there was a high likelihood of success on the merits. In determining whether a stay is appropriate, the Court considered the following four factors: (1) whether the stay applicant has made a strong showing that he is likely to succeed on the merits; (2) whether the applicant will be irreparably injured absent a stay; (3) whether issuance of the stay will substantially injure the other parties interested in the proceeding; and (4) where the public interest lies. The Court agreed that a stay was unlikely to harm the plaintiff or class, but held that the balance of the factors weighed against a stay. The motion was, therefore, denied. Wolff v. Aetna Life Ins. Co., No. 4:19-CV-01596, 2023 U.S. Dist. LEXIS 47925 (M.D. Pa. Mar. 21, 2023).
- Was remand necessary where LTD insurer did not provide an adequate explanation for termination of benefits? The plaintiff, an in-house attorney, received short and then long term disability benefits based on a diagnosis of generalized anxiety disorder, and then long term disability benefits arising from a diagnosis of anxiety. Upon review which included an IME, the defendant subsequently terminated the plaintiff’s LTD benefits after determining she no longer met the Plan’s definition of “disability.” The plaintiff appealed the termination of her LTD benefits. On appeal, records review concluded that while the plaintiff worked in a high stress environment, "there was no objective documentation to support how impairments were measured” and it was unclear “if the impairments were judged solely on the claimant’s report or if testing was performed" and found that it appeared that the plaintiff was "functional enough to return to work.” The plaintiff filed suit and both parties filed motions for judgment. The Court held that under ERISA, the denial or termination of LTD benefits must: (1) provide adequate notice in writing to any participant or beneficiary whose claim for benefits under the plan has been denied, setting forth the specific reasons for such denial, written in a manner calculated to be understood by the participant, and (2) afford a reasonable opportunity to any participant whose claim for benefits has been denied for a full and fair review by the appropriate named fiduciary of the decision denying the claim. Without expressing an opinion on the merits of the decision, and holding that the plaintiff bore the burden of proving disability, the Court found that the defendant abused its discretion by failing to adequately explain its decision to terminate the plaintiff’s benefits based upon the medical record. The court, therefore, remanded the case back to the defendant for further proceedings consistent with its order. O'Connell v. Life, Civil Action No. 21-CV-10587-AK, 2023 U.S. Dist. LEXIS 50228 (D. Mass. Mar. 24, 2023).
- Which disability time frame prevails when a Plaintiff suffers both mental and physical disabilities and is receiving long-term disability benefits issued by an insurance provider that is governed by ERISA? This is an LTD coverage suit in which all parties agreed that the claimant was disabled from her occupation as a practicing anesthesiologist and Director of Cardiothoracic Anesthesia. At issue was for how long. The defendant contended that a psychological condition caused the disability, and thus the claim was subject to a 12-month cap on benefits. The plaintiff contended that her disability was due to a physical, rather than psychological, condition and that she was eligible for benefits paid up to the 48-month cap provided by the plan. The Court held that the defendant had the burden of proving that the plaintiff’s disability arose from a psychological condition. Citing to three reasons, the Court held that the defendant did not carry its burden: the plaintiff had introduced ample evidence that she suffered cognitive impairment; the medical opinions offered by the defendant did not persuasively respond to alternate explanations offered by the plaintiff’s treating doctors and were found to be less persuasive; and finally, where the conclusions of the defendant’s reviewers and the plaintiff’s treating doctors conflicted, the opinions of the plaintiff’s doctors were entitled to more weight. The court, therefore, granted the plaintiff’s motion and denied the defendant’s cross motion. Berg v. Unum Life Ins. Co. of Am., No. 2:21-CV-11737-TGB-DRG, 2023 U.S. Dist. LEXIS 49587 (E.D. Mich. Mar. 23, 2023).
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