Buckle up because this story could easily be adapted into a three-hour dramatic film starring Reese Whitherspoon and directed by Oliver Stone. And if you think reading this story takes a long time, imagine how the plaintiff feels.
The main takeaway from this case is that assuming the disabled person can summon the mental and physical energy to challenge illegitimate benefit denials, justice will eventually find its way – even if it’s the long way.
It started fine
In Jordan v. Reliance Standard Life Insurance Company, the plaintiff was forced to leave her job as a nurse anesthetist due to Lyme disease symptoms. Reliance paid her from 2009 until 2015, when they terminated her benefits.
The timing of this termination, just before the Reliance policy changed its definition of a “disability,” reflects a common approach by disability carriers: when the definition of disability under the policy changes from inability to perform your “own occupation” to inability to perform “any occupation”–a common feature in many group LTD policies–every LTD claim will be scrutinized anew to determine if the claimant continues to be disabled. This is the opportunity which insurers wait for–a “redo” of the claim under different standards which are much more difficult for claimants to meet. In fact, most LTD terminations occur at the point when disability definitions change, so it is very predictable.
Back to the Jordan saga.
The plaintiff’s administrative appeal to Reliance went unanswered, so she filed suit. Reliance was able to stall for time after successfully arguing that the plaintiff hadn’t exhausted all administrative options, despite letting the plaintiff marinate in prolonged limbo.
After the plaintiff submitted to an independent medical examination, Reliance relented and paid benefits through August 2016. In a tragic twist, the plaintiff was diagnosed with breast cancer and underwent a bilateral mastectomy during this interval. She eventually returned to work in September 2017, but there was still the matter of unpaid benefits from 2016 to 2017.
Déjà vu
After another appeal for the missing year of benefits, it was back to federal court for round two. In an all too familiar scene, the court took issue with Reliance’s denial of benefits, saying it hadn’t given the plaintiff’s case a full and fair review. The court judged Reliance’s peer review reports to be “inadequate” and concluded that they hadn’t given the plaintiff’s doctor’s opinion proper consideration. But the court did not award benefits. Instead, the court ordered a remand to Reliance to reconsider the plaintiff’s case.
After this reconsideration, Reliance once again denied the plaintiff’s benefits for 2016 and 2017. Remarkably, this time the district court let the decision stand. The plaintiff then filed an appeal to the United Stated Court of Appeals for the Sixth Circuit.
A belated happy ending
Enter the hero of our story (apart from the long-suffering plaintiff), the Sixth Court of Appeals. The court took Reliance to task for insufficient credible medical evidence, failing to give proper weight to the plaintiff’s doctor’s opinion, and giving too much weight to their doctor’s conclusion, which was based on “unsupported assumptions.” The court noted that Reliance had failed to provide their staff doctors with letters from the plaintiff’s doctor, refuting their opinions.
The court also chastised Reliance for their baffling attempt to use surveillance from 2015, a period when Reliance was still willingly paying benefits, to argue against paying benefits in the disputed period of 2016 and 2017. It concluded that Reliance “acted arbitrarily and capriciously” in denying the plaintiff’s benefits. In the ERISA legal world, “arbitrarily and capriciously” is one of the last things insurance providers hear before a judge orders them to write a big check.
Importantly, the Sixth Circuit Court of Appeals declined to give Reliance another chance to do the right thing, ordering the district court to award the plaintiff benefits from August 2016 through September 2017 without another remand
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What else did we learn?
If you’ve read this far, you know Reliance’s shortcomings were plain and egregious. Their administrators repeatedly mishandled the plaintiff’s case – intentionally or unintentionally, you be the judge. Their doctors used poor (or biased?) judgment that withered under casual review. Finally, during that third appeal, their lawyers seemingly tried to argue a completely different case.
There’s a general sense-not without basis in fact- that insurance companies have a bottomless reserve of cunning administrators, crooked doctors and sharp lawyers. Even so, individuals must challenge a denial of benefits to reveal these weaknesses, and insurance carriers count on the unfortunate fact that many people don’t bother challenging their benefit denials.The old adage “do not accept no for an answer” should be rule, not the exception.
There’s everything to gain and nothing to lose in consulting ERISA lawyers, many of whom will gladly provide a free consultation and give you an honest assessment of the strength of your claim. Why would an insured not take advantage of this resource before abandoning their claim? When the consultation is free, there is no good reason not to get an informed opinion before making a decision about what to do with a denied or terminated LTD claim.