Articles Tagged with administrative appeals

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In an ERISA case, at the center of any dispute over a claimant’s eligibility for long-term disability benefits is the administrative record.

The administrative record is legalese for all the medical records, documents and other information obtained by, and submitted to, the plan administrator during the initial stages of the claim and through the appeal process.

One reason the administrative record is so important is that a claimant who challenges a denial of long-term disability benefits by filing a court action generally cannot present evidence to the court that is not in the record.  Another reason is that disability insurers and plan administrators can—and will—take information from the administrative record out of context to justify denying a claim for disability benefits.

Here is a real-life example: A claimant filled out an “Activities Questionnaire” for her plan administrator and answered questions about her abilities.  In the questionnaire, the claimant reported that she walked two miles a week on an underwater treadmill.  One key advantage of the underwater treadmill is that it can make it easier for a person experiencing joint pain to walk because the water diminishes the pounding on the person’s knees, hips and neck.  In addition, the person can hold onto the handlebars of the treadmill for support.  Given these features, it is much easier to walk on an underwater treadmill than on a sidewalk or around a high school track.

The plan administrator denied the claim.  In its letter explaining why it rejected the disability claim, the plan administrator specifically mentioned that the claimant was able to walk two miles a week, while neglecting to point out that she did so on an underwater treadmill.  This omission was obviously self-serving because it gave an exaggerated depiction of the claimant’s abilities and condition.

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In an ERISA disability case, an insurance company cannot deny a claim without any explanations. Instead, under 29 U.S.C. §1133, it has to provide written notice of the “specific reasons” for the denial, and it must allow a “full and fair review” of any denial, i.e., an administrative appeal.

An important regulation from the United States Department of Labor provides some guidance on §1133.  Specifically, 29 C.F.R. § 2560.503–1 (the “claims procedure regulation”) requires, in part, that any denial of a claim include the following information:

(1) The specific reason or reasons for the denial;

(2) 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 an explanation of why such material or information is necessary; and

(4) Appropriate information as to the steps to be taken if the participant or beneficiary wishes to submit his or her claim for review.

The claims procedure regulation, in particular, provides notable protections for claimants:  An insurance company must not only explain its reasons for denial, but also, it must inform the claimant what information or documents he or she needs to submit in order to appeal.  The insurance company also cannot withhold important documents from the claimant.  For example, in Hamall-Desai v. Fortis Benefits Ins. Co. (N.D. Ga. 2004), the district court held that the requirement of a “full and fair review” of a denial meant that the insurance company had to provide the claimant with copies of all the documents, records and other information it relied on in making its decision to deny the claim. The court explained that, by failing to provide this information, the insurance company prevented the  claimant from preparing an adequate appeal because she could not respond to the evidence the insurance company used to support its decision.

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