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Insurer May Rely on In-House Advisors’ Disability Determination

by | May 1, 2024 |

In Harmon v Unum Life, the U.S. Court of Appeals for the Sixth Circuit has ruled that an insurer may rely on its own medical advisors in denying long term disability (“LTD”) benefits, as long as the advisors took into account the opinions of the participant’s own physician.

Facts.  An employee injured his back on the job.  Because the job required him to lift 50 pounds on a regular basis, he applied for and received LTD benefits.  However, the LTD plan provided that after 24 months, benefits would only continue if the participant was considered to be unable to work in “any gainful occupation.”  The insurer reached out to the participant’s treating physician, requesting updated medical records and including a form that asked if the participant could do work that required him occasionally to walk, stand, and lift up to 20 pounds, while frequently lifting up to 10 pounds.  The physician provided inconsistent replies, eventually stating that he believed the participant was unable to engage in gainful employment.

The insurer then had its in-house medical advisors review the participant’s medical records, and they determined he was capable of gainful employment and no longer eligible for LTD benefits.  The participant then sued the insurer, claiming that the termination of his benefits was tainted by a conflict of interest on the part of the advisors.  However, the lower court sided with the insurer and the participant appealed.

Appeals Court.  The Court first stated that, contrary to the participant’s claim that the insurer’s use of  in-house medical advisors was unreasonable, “reliance on [non-treating] physicians is reasonable so long as the administrator does not totally ignore the treating physician’s opinions.”

In this case, the medical advisors’ review properly accounted for the opinions of the participant’s treating physician and objectively took into account the participant’s ability to lift a certain amount of weight, as would be required in certain forms of gainful employment.  The insurer also verified that the participant had not received any recent evaluations of his back pain and had not recently been prescribed pain medication.  The participant denied having back pain at one physical examination, and his treating physician reported that his spine had a full range of motion.

In addition, the insurer’s medical advisors had contacted the participant’s physician to ask how he came to his disability determination but the physician did not respond with any meaningful criteria.  Therefore, according to the Court, the physician did not give the insurer any compelling reason to credit his opinion over the medical advisors’ own review.

Consequently, the Court concluded that the insurer properly based its decision on objective medical evidence rather than on the claimant’s subjective complaints.  It said the insurer’s structural conflict of interest does not change the fact that the ultimate decision to terminate benefits “was the result of a deliberate, principled reasoning process” and “supported by substantial evidence.”

It therefore affirmed the ruling in favor of the insurer and dismissed the participant’s claim.