Disability carriers must provide for a full and fair review including the four cornerstones of Reason, Reference, Description, and Explanation, pursuant to ERISA

The Employee Retirement Income Security Act of 1974 (ERISA) sets certain minimum requirements for procedures and notification when a plan administrator denies a claim for long-term disability benefits. In a nutshell, ERISA requires that specific reasons for denial be communicated to the claimant and that the administrator afford the claimant an opportunity for “full and fair review”. These requirements insure that when a claimant appeals a denial to the plan administrator, he or she will be able to address the determinative issues and have a fair chance to present the claimant’s case.

A “full and fair review” has the four following requirements: 1) a specific reason for the denial; 2) a specific reference to pertinent plan provisions on which the denial is based; 3) a description of any additional material or information necessary for the claimant to perfect the claim; and, 4) an explanation of why such material or information is necessary.

Federal courts have held that a LTD carrier’s comment to the claimant that, “[y]ou should include all relevant information to support your claim for benefits”, does not satisfy the requirements of ERISA regulations mandating that the denial be “written in a manner calculated to be understood by the participant.” One court scrutinized a letter ambiguously informing the claimant that she, “should include appropriate issues, comments, and reasons why you think your claim should not have been denied.” Such a description is too vague to satisfy ERISA’s notice requirements, the court held. Similarly, a benefit termination letter failed to satisfy notice requirements where it advised claimant to, “forward any additional information or medical reports which you wish to have considered as part of your appeal”.

The rationale behind these court decisions in favor of the LTD claimants is that, “describing additional information needed and explaining its relevance enables a participant both to appreciate the fatal inadequacy of his claim as it stands and to gain a meaningful review by knowing with what to supplement the record.”

As held in White v. Airline Pilots Ass’n, Intern., 364 F.Supp.2d 747, 762 (N.D.Ill., 2005), MetLife conducted a careless and superficial review of White’s claim by not following its own procedure, not describing the background or qualifications for the internal MetLife reviewers (the “nurse consultants”), and not attaching parts of the record until filing its response brief in the case. After a disorganized and imperfect review, MetLife arbitrarily concluded that White was able to perform her “own occupation” without considering what White’s occupation required. Id.

Disability benefit denial letters lacking the four cornerstones of reason, reference, description, and explanation, pursuant to ERISA, are defective and must be remedied through an award of disability benefits to the claimant and all additional statutory remedies.


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