Court Denies Reliance Standard’s Untimely Request For Medical Exam

In a recent case, Harper v. Reliance Standard Life Ins. Co., Frankie Harper was employed as a Medical Surgical Registered Nurse when she was involved in a car accident outside of work that injured her back and shoulder. Harper applied for longterm disability benefits from Reliance, claiming “severe low back pain and bilateral shoulder pain.”

Harper’s treating doctor stated that in an eight hour day with two breaks and lunch, Harper could carry a maximum of ten pounds and occasionally carry small objects, and that she could not bend or squat at the waist. Harper was capable of sitting or driving for one to three hours, could not stand or walk, and could not use her upper extremities for simple grasping, for pushing or pulling, or for fine manipulation. Harper also could not climb or reach above her shoulder, could not kneel, crawl or use her feet to operate foot controls. Harper’s doctor concluded that she would indefinitely be restricted.

Reliance notified Harper that it denied her claim for long-term disability benefits because her medical records did not support impairment beyond the end of the Elimination Period. Harper appealed Reliance’s decision and submitted a letter from Diana Warren-King, a co-worker of Harper’s, who described Harper’s difficulty with everyday physical nursing tasks. Ms. Warren-King wrote that she had worked with Harper for “a number of years,” and that Harper’s duties had become “very hard” for her to perform, including general patient care. Ms. Warren-King wrote that Harper needed assistance from the staff nurses even for making a bed. Reliance responded to Harper by letter that it would have the records reviewed by an “outside, independent physician.”

More than 90 days after the submission of Harper’s appeal, Reliance requested a Functional Capacities Evaluation (“FCE”). Harper refused to submit to the FCE, saying it was “unlawful” and “unreasonable” for Reliance to request it because the 90 day period had passed during which Reliance was required to render a decision, and, further, she objected to the “reliability” of the FCE testing. Reliance then requested an Independent Medical Examination (“IME”). That same day, Harper refused to submit to the IME, stating that “the maximum time for resolving an appeal under the Employee Retirement Income Security Act of 1974 (ERISA) had already been exhausted (90 days since we submitted our appeal), the claim is deemed denied and we are ready to file suit unless we are immediately informed that benefits have been approved.” Having received no denial or approval Harper submitted three pages of additional medical records showing that she had received a lumbar epidural steroid injection for pain, and was scheduled for another injection.

Reliance upheld its benefit denial, stating that “the policy grants us the right to obtain such an exam. Your client’s refusal to cooperate with our request for the IME deprives us of the opportunity to evaluate her complaints and their impact on work function. We submit that, in declining to undergo the IME, Ms. Harper has failed to meet the burden of proof mandated by her policy and that, therefore, we have no alternative but to deny her appeal.” Harper filed her lawsuit three days later.

The Court held that Reliance’s denial of Harper’s appeal was based upon a job description provided by the Dictionary of Occupational Titles (DOT) rather than the actual job requirements described by Harper’s employer which entailed more physical labor than the DOT description, such as the ability to lift up to 50 pounds, with frequent lifting of up to 25 pounds, as well as a requirement of standing 90% of the day. The question of the physical effort required by Harper’s job, and her ability to do that work, was “at the heart of th[e] case.”

The Court held that the ERISA regulations provide 45 days for the administrator to make a determination on a review, and provide one 45-day extension of time if needed. In no event shall the extension exceed 45 days. The clock begins to run when the appeal is filed, “without regard to whether all the information necessary to make a benefit determination on review accompanies the filing.” Although “substantial compliance” with applicable regulations is sufficient, a significant procedural error can require that, in fairness, the administrator’s decision be set aside.

A number of courts have found that the administrator’s failure to comply with ERISA deadlines could not be considered substantial compliance with the regulations. While rejecting a “hair-trigger rule,” the Court said that “[i]t would be manifestly unfair to claimants if plan administrators could extend the process indefinitely by continually requesting additional information. The deadlines therefore empower the claimant to call a halt to the evidence-gathering process and insist on an up or down decision on the record as it stands.” To the extent Reliance’s decision to deny Harper’s appeal was based upon Harper’s refusal to undergo the FCE or IME that was requested after the time in which Reliance was to have decided Harper’s appeal, that decision was arbitrary and capricious. The court concluded that the appropriate course in this case was to remand Harper’s claim to the administrator to conduct a new review of her eligibility, applying the proper standards.

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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