Lash V. Reliance Standard

Case Name: Kimberley Lash v. Reliance Standard Life Insurance Co, et al.

Court: U.S. District Court for the Eastern District of Pennsylvania.

Date of Decision: April 4, 2017.

Type of Claim: Long Term Disability under the Employment Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001, et seq.

Insurance Company: Reliance Standard Life Insurance Company (“Reliance Standard”). Matrix Absence Management, Inc. was the Third-Party Administrator (“TPA”) for the claim.

Claimant’s Employer: Temple University Health System.

Claimant’s Occupation / Job Position: Lash was a payroll supervisor.

Disabilities: An MRI performed in May, 2012 revealed that Lash had a tumor in her lower back. Lash had surgery to remove the tumor on May 24, 2012, which caused her to become totally paralyzed in her lower extremities.

Benefits Paid? Yes – for the first two years under the “own occupation” definition of disability. Matrix initially approved Lash’s claim for long-term disability benefits. At that time, Matrix informed her that “in order to be eligible for benefits beyond 24 months she had to be disabled from performing the material duties of any occupation beginning August 3, 2014.” To determine Lash’s continued eligibility, Matrix collected documentation from her medical providers and had its Nurse Case Manager review her claim on April 10, 2014.

Basis For Denial / Termination of Benefits: On February 6, 2015, Matrix informed Lash that her claim for long-term disability benefits was denied, as Matrix determined that she could perform other occupations despite her disability.

Procedural history: Lash appealed the termination of benefits decision on February 22, 2015, after which Reliance required her to submit to an Independent Medical Examination. On May 22, 2015, Reliance notified Lash that it had conducted an independent review and was upholding the decision to deny benefits.

Plaintiff Kimberly Lash thereafter brought a civil action against Temple University Health System, her former employer, Reliance Standard Life Insurance Company, the insurer of Temple’s Group Long-Term Disability Insurance Plan (the “Plan”), and Matrix Absence Management, Inc., the Third-Party Administrator for the Plan. Matrix and Reliance moved to dismiss the First Amended Complaint. The District Court granted in part and denied in part the Motion to Dismiss.

Primary Issue: The moving Defendants seek to dismiss Counts I and II as against Matrix, contending that Matrix is an improper Defendant in Lash’s claims asserted under 29 U.S.C. § 1132(a)(1)(B). Under ERISA, an insurance plan participant may bring a civil action “to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan.” 29 U.S.C. § 1132(a)(1)(B).

Holding: For the aforementioned reasons, we conclude that the First Amended Complaint, like the original Complaint, fails to allege that Matrix is a proper Defendant to Lash’s claim for benefits asserted under § 1132(a)(1)(B). Rather, because the First Amended Complaint alleges that Reliance made the final decision to deny Lash’s claim for long-term disability benefits, it does not plausibly allege that Matrix exercised the requisite control over the administration of benefits to support a claim against Matrix pursuant to § 1132(a)(1)(B). Accordingly, the Motion to Dismiss Counts I and II for failure to state a claim against Matrix is granted.

Disclaimer: This was not a case handled by disability attorney Nick A. Ortiz. The court case is summarized here to give readers a better understanding of how Federal Courts decide long term disability ERISA claims.

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