Disability Carriers Must Pay the Price for Their Arrogance in Denying Benefits

In a recent case, the attorney who assisted his disabled client in securing disability benefits from the Social Security Administration then agreed to assist her in securing LTD benefits from her former employer’s disability carrier, MetLife. Plaintiff’s counsel inquired as to whether MetLife utilized a physician to review his client’s application and appeal, as it was required to do under the Employee Retirement Income Security Act of 1974 (ERISA). MetLife conceded that a physician had not reviewed Plaintiff’s file, but claimed that it was not required to do so, because it had denied the application based upon a Plan provision: specifically, that Plaintiff did not meet the Plan’s 180-day elimination period requirement. In response to a persuasive letter from Plaintiff’s counsel, MetLife relented and agreed to provide Plaintiff with one final review of her claim.

A. Procedural Irregularities Demonstrate an Insurer’s Failure to Provide Plaintiff with a Full and Fair Review

Under the Plan, MetLife agreed that, “the person who will review your appeal will not be the same person who made the decision to deny your claim.” This is consistent with ERISA regulations passed to ensure full and fair review for claimants. In assuring a full and fair review for plan participants, ERISA regulations require that no deference be given to the initial decision, that the review be conducted by someone other than the initial reviewer, that someone trained and experienced in the appropriate field of medicine be consulted, and that a different consultant be involved in advising on the review. In this case, however, MetLife‘s case management specialist initially denied Plaintiff’s claim and then also denied Plaintiff’s final appeal. The conflict of interest inherent in someone reviewing the propriety of his or her earlier decision denying benefits should be obvious.

There were other examples of procedural irregularities, as well. Contrary to ERISA’s requirements, MetLife failed to have medical personnel review Plaintiff’s first or second submissions. (Noting that plans must have a physician or nurse consultant review a claimant’s application for benefits.) It was only when Plaintiff’s counsel highlighted MetLife’s failure to comply with its ERISA obligations that MetLife finally hired a physician to review Plaintiff’s file. The Court found that these procedural irregularities constituted additional evidence that MetLife’s decision was arbitrary and capricious.

B. Retroactive Award of Benefits and Attorney Fees Were Necessary Remedies When Carrier Disregarded Evidence of Disability and Selectively Cited to the Record

The court found that evidence so strongly favored Plaintiff’s entitlement to LTD benefits, and so strongly demonstrated MetLife’s refusal to provide Plaintiff with a full and fair review of her claim, that a retroactive award of benefits was appropriate.

In addition, the Court found that Plaintiff’s attorney was entitled to his Attorneys’ Fees. “The Court in its discretion may allow a reasonable attorney’s fee and cost of action to either party.” In deciding whether to award attorney’s fees to the prevailing party, the Court must decide whether the losing party’s position was justified and taken in good faith. “MetLife’s utter disregard for the evidence favoring Plaintiff’s claim and its selective citation to the Record in this litigation weighed heavily in favor of awarding Plaintiff’s reasonable fees and costs.”

This case is a prime example of an arrogant long-term disability insurance carrier’s intentional violation of clear mandates of public policy and the law in order to feed its own greed at the pain and suffering of its policyholders.

Alan Olson writes this web-log to provide helpful information regarding long-term disability cases. He practices long-term disability law throughout the United States from his offices in New Berlin, Wisconsin. Attorney Olson may be contacted at [email protected] with questions about the information posted here or for advice on specific disability benefit claims.


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