In an ERISA disability lawsuit, the plan administrator’s “denial letter” is one of the most important documents for a plaintiff. The letter is supposed to explain why the plan administrator denied a claim for disability benefits. A denial letter may also describe why the plan administrator rejected an administrative appeal of an earlier decision to deny benefits.
A denial letter should detail what evidence (medical exams, functional capacity evaluations, file reviews) the plan administrator relied on in making its determination that the claimant is disabled under the policy. Too often, however, plan administrators craft denial letters to sound official by simply reciting the policy language and claimant’s medical diagnosesꟷwithout actually explaining the basis for their decisions. These letters may run 8-10 pages, but they often don’t say anything of substance.
A vague, conclusory denial letter is not merely irritating, it runs afoul of ERISA and Sixth Circuit case law. As a result, an attorney representing an ERISA disability plaintiff can use a defective denial letter against a plan administrator by arguing that the letter indicates an arbitrary and capricious review of the disability claim. Under ERISA, courts usually will only overturn a denial of disability benefits if the plaintiff can show that the decision was “arbitrary and capricious.” A flawed, incomplete denial letter can be evidence of just that.