Yesterday, the United States District Court for the Northern District of Alabama found in favor of a long term disability claimant after an insurer ignored the opinions of his treating physicians in finding that he was not disabled under the terms of his employer’s long term disability plan. A copy of the Court’s opinion in Wiley v. United of Omaha Ins. Co., Case No. 5:16-cv-1936-CLS (N.D. Ala. May 20, 2019), may be found here. (The opinion is lengthy due to a large appendix at the end).
The plaintiff was employed by Camber Corporation as a “Senior Business Systems Analyst,” a position that required him to provide software analysis, design, and programming support to the United States military and other departments and agencies of national government. He participated in the short and long term disability plans his employer sponsored. Those short and long term disability plans are governed by the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001, et seq. (“ERISA”). The plans were funded by a contract of insurance issued by United of Omaha Life Insurance Company (“defendant”). The insurer was responsible for administering claims for disability plan benefits. The plaintiff applied for long term disability benefits (“LTD”) under the plan, and his LTD claim was denied after the insurer found that he could perform the material duties of his regular occupation. He then filed suit under Section 502(a) of ERISA, 29 U.S.C. § 1132(a), seeking to recover the benefits owed to him.
The U.S. Court of Appeals for the Eleventh Circuit has set forth a multi-factor test for assessing whether a claim for benefits arising under ERISA Section 502(a) should be reversed. That test is as follows:
(1) Apply the de novo standard to determine whether the claim administrator’s benefits-denial decision is “wrong” (i.e., the court disagrees with the administrator’s decision); if it is not, then end the inquiry and affirm the decision.
(2) If the administrator’s decision in fact is “de novo wrong,” then determine whether he was vested with discretion in reviewing claims; if not, end judicial inquiry and reverse the decision.
(3) If the administrator’s decision is “de novo wrong” and he was vested with discretion in reviewing claims, then determine whether “reasonable” grounds supported it (hence, review his decision under the more deferential arbitrary and capricious standard).
(4) If no reasonable grounds exist, then end the inquiry and reverse the administrator’s decision; [on the other hand,] if reasonable grounds do exist, then determine if [the administrator] operated under a conflict of interest.
(5) If there is no conflict, then end the inquiry and affirm the decision.
(6) If there is a conflict, the conflict should merely be a factor for the court to take into account when determining whether an administrator’s decision was arbitrary and capricious.
Blankenship v. Metropolitan Life Insurance Co., 644 F.3d 1350, 1355 (11th Cir. 2011). In applying the test, the Wiley court found that United of Omaha had erred in denying the plaintiff’s claim for benefits.
First, the Court held that United of Omaha’s decision was de novo wrong. The court found that the plaintiff suffered from a variety of physical impairments that prevented him from performing most of the material duties of his regular occupation as a Senior Business Systems Analyst. It also found that he lacked the ability to maintain the concentration required to perform repetitive analytical tasks on a sustained basis, which were essential functions of his position. Because the Court next determined that the insurer had discretionary authority to construe the terms of the LTD plan, it moved on to the other factors to assess whether the insurer acted arbitrarily and capriciously in denying the plaintiff’s claim.
The court unequivocally found that “reasonable grounds” to support United of Omaha’s decision to deny the plaintiff’s claim did not exist. The insurer classified the plaintiff’s regular occupation as “Sedentary,” which requires “sitting most of the time, but may involve walking or standing for brief periods of time. Jobs are sedentary if walking and standing are required only occasionally and all other sedentary criteria are met.” Although the insurer’s medical consultant found that plaintiff could sit up and stand/walk each for up to six hours in an eight-hour work day, the Court found that the evidence in the record showed otherwise.
One of the plaintiff’s treating physicians, a neurologist, restricted the plaintiff to sitting for not more than four hours during an eight-hour workday, which is insufficient to perform sedentary work. The same doctor also limited the plaintiff to standing for not more than one to two hours, and walking for one to two hours during the remaining four hours of a normal workday. The physician also directed him to alternate between sitting, standing, and walking every ten to fifteen minutes. Thus, the Court held that “[t]here is no evidence in the administrative record indicating that plaintiff could perform the material duties of his regular occupation with such frequent changes in position …”
Likewise, the restrictions placed by the plaintiff’s primary care physician, were even more restrictive than those of the Plaintiff’s neurologist. The primary care physician limited him to a total of only three hours of sedentary work during any given workday: specifically, one hour of sitting; one hour of standing; and one hour of walking. He also concluded that plaintiff was not able to engage in repetitive work at a constant pace.
Lastly, although neither of plaintiff’s treating physicians responded to the insurer’s written correspondence to them in which the insurer asked each doctor to agree with insurers assessment of the plaintiff’s functional abilities, the court found their silence to be afforded little weight in evaluating the reasonableness of defendant’s decisions. The treating doctors’ failure to respond to a follow-up request for additional information was not a valid reason to disregard medical diagnoses “that have been well documented by extensive records of physical examinations, supporting tests, and actual treatments conducted over a period of years. Ignoring the breadth and depth of such objective evidence allows insurance companies to subvert meritorious claims by simply increasing the paperwork burden on a claimant’s physicians.”
The insurer’s decision was overturned accordingly.