You know that the ERISA regulations set out claims procedural requirements.
Whether the claims administrator complied with the claims procedure requirements is often a key battleground when a court is determining if the long term disability claim was improperly denied.
This new case highlights the arguments Plaintiffs' may make in challenging claims handling, and how the Sixth Circuit rejected those arguments.
Avery v. Sedgwick Claims Management Services, Inc. and FCA US LLC Long Term Disability Benefit Plan, 2023 WL 4703865 (6th Circuit July 24, 2023)(Applying abuse of discretion standard of review, court affirmed denial of ERISA-governed long term disability benefit claim. Claim administrator substantially complied with ERISA claims procedure requirements: "If Avery wished to include Social Security documentation in the administrative record, she should have requested said documents from the SSA directly and supplemented the record when given the opportunity to do so.")
FACTS: Avery sought and was granted ERISA-governed long term disability benefits following a leg injury. Sedgwick discontinued benefits after an independent medical exam, and Avery appealed. The appeal was denied and Avery brought suit in federal court.
DISTRICT COURT HELD: District Court granted Sedgwick's motion for judgment.
SIXTH CIRCUIT HELD: Affirmed denial of Long Term Disability Benefits—substantial evidence supported the denial of benefits under the arbitrary capricious standard of review.
- "In deciding whether a plan has satisfied the requirements
of [the ERISA Procedural Requirements] we employ a 'substantial
compliance' test. Op. at 8.
- "'If the communications between the administrator and
the participant as a whole fulfill the twin purposes [of notice of
specific reasons for claim denial and an opportunity for review],
the decision will be upheld even where the particular communication
does not meet those requirements.'" Op. at 8-9.
- Argument that Sedgwick letter failed to inform claimant of
reasons for claim denial and appeal right...
rejected. "Sedgwick's collective
communications...substantially complied with ERISA's procedural
requirements. Although Sedgwick's July 21, 2014 letter
undoubtedly fell short of meeting [ERISA procedural]
requirements...its August 20, 2014 letter corrected any
deficiencies." Op. at 10-11.
- Argument that Sedgwick failed to give claimant an opportunity
to submit comments and documents... rejected.
"Before issuing its initial benefits denial, Sedgwick
...ask[ed] whether she intended to provide any additional
information, to which she responded 'no'." Claimant
also did submit additional comment in her appeal letters. Op. at
12.
- Argument that Sedgwick failed to provide "reasonable
access" to administrative file... rejected.
"While claimants are entitled to reasonable access to records
relevant to their claim, this access is provided 'upon
request.' ...And there is no indication that [claimant] ever
requested access to records...." Op. at 6
- Argument that Sedgwick did not retain appropriate peer
reviews... rejected. "Sedgwick relied on
[Independent Record Reviews] by two board certified
neurologists.... Furthermore, the requirement that a group health
plan 'consult with a health care professional who has
appropriate training and experience in the field of medicine
involved in the medical judgment' applies only 'in deciding
an appeal of any adverse benefit determination.'" The
knowledge and experience of a medical reviewer not consulted in
deciding an appeal is "procedurally irrelevant." Op. at
13.
- Argument that surveillance documentation was omitted from the
administrative record... rejected. Avery contended
Sedgwick failed to include in the administrative record the
"actual surveillance" of claimant. An investigator
apparently sent an email of observations of claimant driving a car
and running a business. There was no evidence that other
documentation of the surveillance was made, so it was "pure
speculation" by Avery that documents had been kept out of the
record. Op. at 13-14.
- Argument that records from Social Security were omitted from administrative record... rejected. Avery argued that documents related to her Social Security disability had not been included in the administrative record. "If Avery wished to include Social Security documentation in the administrative record, she should have requested said documents from the SSA directly and supplemented the record when given the opportunity to do so." Op. at 14.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
