Melissa McIntyre (“McIntyre”) worked as a nurse for Mayo Clinic Health System. She was covered under a long term disability plan which was administered by Reliance Standard Life Insurance Company (“Reliance”). Around 2011, McIntyre’s health caused her to cease working. McIntyre suffered from Charcot Marie Tooth Syndrome, a neurological issue that can result in atrophy of the hands, legs, and feet and loss of sensation. Her specific symptoms involved problems with fatigue, balancing, and walking to and from patient rooms. As a result of her problems, McIntyre sought short term disability benefits, which she then began to receive.
Under the long term disability plan, there were two types of disability benefits. First, there is a Regular Occupation benefit, where an employee cannot fulfill the requirements of his or her occupation because of their disability. Secondly, there is an Any Occupation benefit, where an employee cannot fulfill the requirements of any occupation because of their disability. Under the Regular Occupation benefit, an insured can continue to receive benefits for twenty-four months. Then, after the twenty-four month period, the benefit becomes an Any Occupation benefit. The insured then has to meet the qualifications for benefits under that definition.
McIntyre sought long term disability benefits in September of 2011. Reliance agreed to pay her benefits from October 18, 2011, forward. She additionally applied for Social Security Disability Insurance benefits in addition to the long term disability benefits. At first, Reliance decided that McIntyre met the qualifications for Regular Occupation benefits since she was only restricted at a less than sedentary level. By 2013, Reliance sought to determine whether McIntyre met the requirements for Any Occupation benefits. It decided that she was able to do sedentary and light work, therefore she would be unable to obtain Any Occupation benefits after December 2015.
McIntyre sought to appeal this termination of her benefits. She supported her appeal with a document from Dr. Vanessa Tseng which explained that she was unable to have gainful employment, along with further letters and an employment evaluation report. In response to the information she submitted, an analyst from Reliance requested more information from McIntyre’s doctors: Dr. Tseng, Dr. Mankato, and Dr. Stevens. McIntyre explained that there was no such person as Dr. Mankato, but Reliance continued to wait for records from that person. As of August 25, 2016, Reliance explained to McIntyre’s attorney that she would need to undergo an independent medical examination.
The letter that Reliance sent out explained that its “request for an IME will toll the statutory time frames for reaching an appeal determination, from the time of our request until such time as we receive the independent physician’s report.” Subsequently, a letter was sent scheduling the independent medical examination for September 20, 2016. A conflict of interest caused the appointment to be rescheduled, and that appointment was made for October 22, 2016. McIntyre’s legal counsel objected to the new date because of a conflict, as well as because the location of the appointment was too far away.
Reliance then explained that it was “required to make a decision within 45 days of the date of [McIntyre’s] appeal but [was] allowed an additional 45 days if circumstances do not permit us to make a decision within the initial 45 day time frame” and the letter itself was “notice of our intention to take beyond 45 days to make a final decision.” McIntyre’s legal counsel then canceled the next appointment and it was not rescheduled for over a month. Finally, in December of 2016, McIntyre participated in the independent medical examination. The results of the examination explained that she was able to perform jobs at the sedentary level, including office work. Reliance then used this information to uphold its termination of benefits, which led to this suit.
Normally, under an ERISA review, the claims administrator has “discretionary authority to determine eligibility for benefits or to construe the terms of the plan.” In some cases, however, there are different standards of review. “[A] plan administrator’s decision will be afforded less deference if a claimant presents ‘material, probative evidence demonstrating that (1) a palpable conflict of interest or serious procedural irregularity existed, which (2) caused a serious breach of the plan administrator’s fiduciary duty to her.’”
First, the court had to decide whether a procedural irregularity existed in this case. In another case, a court “found over 100 opinions in the last 21 years criticizing Reliance’s disability decisions, including over 60 opinions reversing a decision as an abuse of discretion or as arbitrary and capricious.” Further, “Reliance’s denials are overwhelmingly outweighed by evidence to the contrary, fraught with procedural irregularities, and blind or indifferent.” In this case, the court decided that the major procedural irregularity here was the fact that Reliance took so long to decide the appeal. Overall, it held that Reliance intentionally chose to fail to make a determination until after a statutory time period elapsed.
In addition to the procedural irregularity, the court had to determine whether Reliance breached a fiduciary duty to McIntyre. To demonstrate this breach, McIntyre must show “serious doubts as to whether the result reached was the product of an arbitrary decision or the plan administrator’s whim.” The court decided that Reliance failed to address evidence provided by Dr. Tseng related to McIntyre’s inability to work. Further, Reliance did not discuss how it weighted Dr. Tseng’s evidence in relation to the independent medical examination. Therefore, the court ruled that there were serious doubts about Reliance’s decision being arbitrary or a whim.
The court felt that McIntyre was unable to carry out the requirements for work on a full-time basis. Particularly, her condition made her leg muscles to atrophy which resulted in pain and fatigue. Because of this and other evidence, the court supported a finding of total disability and the court agreed that McIntyre is disabled as defined under the Any Occupation benefit standard. Therefore, the court chose to rule in favor of McIntyre and against Reliance.[Note: this claim was not handled by the Ortiz Law Firm. It is merely summarized here for a better understanding of how Federal Courts are handling long term disability insurance claims.]
Here is a PDF copy of the decision: