Court of Appeals covering Michigan, Ohio, Kentucky and Tennessee Finds LTD Carrier’s File Review and Reasoning Defective

In a recent long-term disability case, the claimant, “Adrienne,” was a project manager and master plumber covered by a short-term and long-term disability plan (the Plan) when she went on disability leave due to multiple sclerosis and related conditions. Kemper National Services, Inc. and later Broadspire Services, Inc. administered the Plan. The Plan paid Adrienne short term disability benefits for twenty-four months but denied Adrienne’s claim for long term disability benefits on the grounds that she was not disabled under the “any-occupation” standard in the Plan. The district court dismissed Adrienne’s case so she appealed to the Sixth Circuit.

The Sixth Circuit Court of Appeals (covering Michigan, Ohio, Kentucky and Tennessee), reversed the district court and held that the denial of disability benefits was arbitrary and capricious because it was not made as the result of a “deliberate, principled reasoning process.” The court found that the administrator had not adequately explained why it reached a disability determination contrary to that of the Social Security Administration (“SSA”) which had determined that Adrienne was disabled. The court noted that the administrator’s lack of such explanation was problematic because it had assisted Adrienne in obtaining disability benefits from the SSA and reaped financial benefits from the SSA’s disability determination because the Plan reduced its benefits by any benefits Adrienne received from the SSA.

The court was also troubled by the administrator’s reliance on “file reviews” rather than physical examinations because the reviews contained conclusions that were not supported by either the content of the files or the file reviewer’s own findings. For example, the court found that the administrator relied on a file report that acknowledged that Adrienne could not walk or stand and could only sit for two hours in an eight hour work day but also concluded without support that she could work in a sedentary capacity. Finally, the court found that the denial letter did not adequately explain the reasons for the denial because the letter contained (i) a one-page description of the standard for “own-occupation” disability, (ii) a one-page list of the documents reviewed to reach the decision, and (iii) a conclusory statement that the documents did not contain sufficient medical evidence to support her claim for long term disability benefits.

The Employee Retirement Income Security Act of 1974 (ERISA) requires that denial letters based on file reviews contain specific reasoning that links the documents examined to the ultimate denial. Furthermore, a carrier must provide reasoning for rejecting the SSA’s conclusions of disability, especially when there is a conflict of interest. These two procedural defects alone would warrant a reversal of the carrier’s denial of our client’s long-term disability benefits.


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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