In Hans v. Unum, the U.S. District Court for the Eastern District of Pennsylvania has ruled that the court cannot substitute its judgment to for an insurer’s comprehensive and reasoned benefits denial decision if the decision is supported by substantial evidence.
Law. The Supreme Court has ruled, in Firestone Tire & Rubber Company v. Bruch, that a reviewing court may not substitute its judgment for that of the claims administrator if the plan document gives the administrator discretionary authority to interpret the terms of the plan. When such authority is granted, claims denials are subject to a more deferential “arbitrary and capricious” standard of review in court, and an administrator’s decision can only be overturned by a court if the decision is unreasonable, unsupported by the evidence or clearly erroneous.
Facts. An employee who participated in a long-term disability (“LTD”) plan and experienced “symptoms consistent” with long COVID and heart problems applied for LTD benefits.
Under plan provisions, an employee participant is “disabled” when the plan’s insurer determines the participant “[is] limited from performing the material and substantial duties of [his] regular occupation due to [his] sickness or injury.”
The employee’s medical team said he has episodes of rapid heart rate often accompanied by left side axillary pain and neurological symptoms, which interfered with his work, plus intermittent palpitations, rapid heart rate, lightheadedness, tingling sensation in his extremities, dizziness, shortness of breath, and headaches.
The employee’s doctors also said his primary diagnosis was “post COVID-19 (condition unspecified),” coagulation defect (unspecified), mast cell activation syndrome (MCAS), and “debilitating” postural orthostatic tachycardia syndrome. They determined that he could not perform the physical requirements of his duties “nor could he work in stressful environments for extended periods of time.”
In response, the insurer studied multiple medical records, and vocational assessments, for similar employment positions as well as the employee’s evidence concerning his day-to-day activity. This, according to the court, led to the insurer’s “detailed findings and conclusion [the employee participant] was not disabled under the terms of the plan.” The employee disagreed with the insurer’s finding and sued in federal court.
District Court. Noting that the case was to be reviewed under the arbitrary and capricious standard, the court stated it cannot substitute its judgment to overrule the insurer’s comprehensive and reasoned benefits decision supported by substantial evidence.
The court then ruled that, “We cannot find an arbitrary and capricious denial of benefits to the [employee] on review of the administrative record and the parties’ fully-briefed arguments. We grant judgment on the administrative record in favor of the insurer.” A benefits decision is arbitrary and capricious only “if it is without reason, unsupported by substantial evidence or erroneous as a matter of law…’substantial evidence’ means “such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.”
The court also noted that a claims administrator’s benefit decision may also be arbitrary and capricious if “a combination of case-specific structural and procedural factors…demonstrate that a fiduciary abused its discretion in making an adverse benefit determination or if it improperly dismissed the opinions of his treating providers.”
The court similarly ruled that it could not find the insurer’s decision to deny benefits to be arbitrary and capricious under these standards. The insurer did not arbitrarily refuse to credit the opinions of the employee’s treating providers and it properly required objective evidence of employee functionality. Furthermore, the insurer explained the reasoning for its decision. Therefore, the court “cannot disturb [the insurer’s] decision if it is reasonable and supported by relevant evidence as a reasonable mind might accept as adequate to support a conclusion.”