Tennessee Disability and Life Insurance Blog
When we are retained by a new ERISA disability client, one of the first documents we review is the letter from the plan administrator denying long-term disability benefits, or, as it is most often called, the “denial letter.” Most denial letters, regardless of the disability at issue, follow the same formula: A general description of the claimant’s physical or mental condition, a brief explanation downplaying the severity of the claimant’s condition, and a conclusory sentence stating that the claimant is able to meet the occupational standard of the policy.
This type of letter can be challenged in court as evidence that the plan administrator’s denial of disability benefits was arbitrary and capricious, and should be overturned. For example, in Elliott v. Metro. Life Ins. Co. (2006), the Sixth Circuit examined a denial letter that noted that the plaintiff’s medical documentation “does not support a condition of a severity that would prevent you from working.” The court took issue with the defendant’s denial letter. It noted that the denial letter included “no statement or discussion” of the plaintiff’s occupational duties or her ability, or inability, to perform them. The court also observed that the physician who reviewed the claim on behalf of the defendant gave no opinion as to how the plaintiff’s “medical condition” related to the demands of the job.
As the Elliot court saw it, the defendant’s denial letter was evidence that the defendant did not make a “reasoned judgment” in evaluating the plaintiff’s claim for long-term disability benefits. More specifically, the defendant failed to rely on medical evidence that assessed the plaintiff’s physical ability to perform her job. Because of the defendant’s flawed review, the court overturned the defendant’s denial of long-term disability benefits.
The Elliot decision is important because it shows that plan administrators cannot merely review a claimant’s medical condition in a vacuum. They must determine how the claimant’s medical condition affects his or her ability to work. So, for example, if the claimant’s policy states that he or she is disabled if they are unable to work his or her occupation, then the plan administrator must consider the physical and mental demands of that occupation when determining whether the claimant is disabled.
In our practice, we have reviewed many denial letters that merely state that the claimant is not disabled because he or she can perform several physical and/or mental tasks. These denial letters are incomplete because they do not discuss the demands of the claimant’s job. In any subsequent lawsuit, we will argue a denial letter that does not assess a claimant’s disability in the context of his or her occupation reflects a faulty review.
Assessing the physical and mental demands of the claimant’s occupation should be a matter of common sense. A permanent hand injury may result in a disability for a surgeon, but not for a teacher. An inability to stand for long-periods of time may result in a disability for a teacher, but not for an accountant. Nevertheless, based on our firm’s experience, too many plan administrators fail to evaluate the unique demands of the claimant’s occupation when deciding a disability claim.
Courts in the Sixth Circuit have also emphasized that plan administrators must adhere strictly to the definition of disability set out in their own policies. For example, in Carty v. Metro. Life Ins. Co., (2019), the federal district court in Middle Tennessee took a close look at a policy that stated that, after 18 months, one is disabled if they are not earning more than “50% of your pre-disability earnings from any employer in your local economy.” In ruling that the defendant’s denial of disability benefits was arbitrary and capricious, the court noted that the defendant failed to conduct any vocational analysis of whether the claimant’s confirmed medical challenges prevented him from finding a job in Middle Tennessee that paid half his pre-disability salary of $126,200. The defendant was required to “base its conclusion on at least some combination of evidence and reasoning that rationally addressed [the claimant’s] ability to make an annual salary of at least $63,100.” Instead, the court noted that the defendant did not even analyze the claimant’s earning capacity.
If you have been denied a claim for long-term disability benefits, take a close look at your denial letter. Does it focus on the demands of employment and the language of the policy? Or is the denial letter so general that it is not even clear if it applies to your case? In any lawsuit seeking to overturn a denial of long-term disability benefits, courts will focus on the denial letter as evidence of the quality of the plan administrator’s review.
If you have a long-term disability claim, you should consult with an experienced long-term disability law firm in order to protect your rights.