Let's Take a Look at an Example
Joseph worked for Pepsi as a truck driver, which was a heavy physical demand level job. He suffered from chronic, unexplained, and unpredictable syncope, which is a sudden loss of consciousness. He became unable to work and applied for long-term disability (LTD) under Pepsi’s group long-term disability plan. Claims for disability benefits under a group plan (with few exceptions) are governed by the Employee Retirement Income Security Act of 1974 (ERISA).
The claim administrator agreed that he was not able to work as a truck driver and paid him benefits for two years under the “own occupation” definition of disability. The claim administrator denied Joseph’s claim under the “any occupation” definition of disability which took effect after twenty-four months, claiming that he was still able to work full-time in a sedentary capacity.
It is not uncommon for a claim administrator to approve benefits for two years while the claim subject to the “own occupation” definition of disability, and then terminate benefits at the point where the claim transitions to the “any occupation” definition. Claim administrators will typically conclude that the claimant is able to work in a sedentary occupation. That is exactly what happened in Joseph’s case.
The claim administrator sent Joseph a letter denying his claim and advising him that he had 180 days from receipt of the denial letter to submit an appeal. The letter informed Joseph that the claim administrator completed a vocational analysis that determined there were sedentary occupations consistent with his limitations and restrictions, and which were consistent with his background. The claim administrator denied the claim on the basis the medical records provided by Joseph’s doctors did not explain what was causing his symptoms. The truth was that his doctors did not know why he was suddenly, and without warning, losing consciousness.
What the Appeal Process is Used For
The administrative appeal process provides the claimant with an opportunity to “throw the kitchen sink” at the claim administrator. In Joseph’s case, this was his chance to provide medical and vocational evidence responsive to the claim administrator’s basis for denying the claim. He needed to use his administrative appeal to overcome any misconceptions, misrepresentations, and questions about the medical condition(s) that caused him to be disabled, and to respond to the vocational analysis.
What Happened Next
Unfortunately, Joseph handled his own appeal while he was also trying to manage his medical condition and medical treatment. His wife helped him draft an appeal letter which stated he could not drive (which was true), and that he could not be left alone in case he unexpectedly lost consciousness. Joseph merely relied upon the evidence already in the claim file which did include cursory statements by his doctors indicating that he was not able to work. There were witnesses to a few of his episodes where he lost consciousness, but they were not well documented in the medical records and Joseph did not obtain and submit statements from these witnesses explaining what they saw.
Furthermore, there was no detailed analysis from his doctor explaining whether there was any objective medical evidence or any other clinical data that would support Joseph’s diagnosed medical condition, or how his medical condition caused him to be unable to work in a sedentary physical demand level occupation. Furthermore, Joseph did not address the many inconsistencies that existed with the claim administrator’s vocational analysis.
What Happens After Final Denial?
Joseph’s claim was subject to ERISA so when the claim administrator issued the final denial on appeal, he was effectively barred from producing additional evidence in support of his claim. The sole remaining avenue to pursue was to file a lawsuit against the Long-Term Disability Plan in a federal district court. Judicial review of claims governed by ERISA are generally limited to the evidence contained in the claim administrator’s file (the administrative record) at the time of final denial.
Joseph contacted the Disability Specialists after he exhausted his appeal rights. Even though Joseph’s appeal failed to address many key points that required a response, and nothing could be done to improve the administrative record, the Disability Specialists took the case and proceeded to file a lawsuit in the federal district court in New York where the case ultimately proceeded to trial.
The Court’s review of Joseph’s case was subject to an “abuse of discretion” standard. The group plan that governed Joseph’s claim granted the claim administrator with discretionary authority which meant that the court could not disturb the benefit determination unless it could be shown that the claim administrator’s decision was arbitrary and capricious. A court will find a claim administrator’s decision to be arbitrary and capricious if it was made without reason, is unsupported by substantial evidence, and/or is erroneous as a matter of law.
The district court in Joseph’s case ruled in favor of the Long-Term Disability Plan and in doing so, stated the following:
“The record shows that [the claimant] has a very serious impairment, one that may place lifelong limitations on his daily living. But [he] has not established that the independent, third-party claims administrator had a conflict of interest or that the denial of his claim was arbitrary and capricious. Thus, under ERISA’s highly deferential standard of review, the Court cannot revisit the final claim determination.”
The claim administrator’s decision in Joseph’s case was flawed, but he did not bring these inconsistencies to light when he prepared his own appeal because he did not know what to look for, nor did he understand that the burden was on him to provide evidence in support of his disability. Consequently, important points were missed that could have demonstrated the unreasonable nature of the claim administrator’s decision. If Joseph had hired a lawyer while his administrative appeal was still pending, many things could have been done to improve his case which would have improved his chances of demonstrating how the claim administrator’s decision was in fact arbitrary and capricious.
How We Can Help
The Disability Specialists can help you with every phase of your denied long-term disability claim. Whether you are contemplating going out of work on disability or are dealing with a denied claim and need help with your appeal, or if you have a claim denied on appeal, call the Disability Specialists for a free consultation. You do not want to end up being a cautionary tale like Joseph because you missed something that could be the difference between winning or losing your case.
Whether you suffered a serious injury or illness that prevents you from work or your ERSA or long-term care claim has been denied, call our Los Angeles disability attorneys at (818) 495-8298 or fill out our online contact form today to schedule a free consultation. We have more than 20 years of trial-tested experience!