This month’s Friday Five explores decisions from around the country discussing differences between LTD and LWOP policies, the breadth of discretion available to claims administrators and the always important topic of timely action by insurers in issuing claims decisions.

1. Is there a difference between the “any reasonable job” language in a life-waiver-of premium policy and the “any gainful employment” language in a disability benefits plan? Yes, because the same concerns are not implicated in the different policies. The claimant applied for long-term disability (LTD) and life-waiver-of-premium (LWOP) benefits after neuromylitis optica rendered him unable to work. The insurer paid LTD benefits for two years but did not thereafter renew the LTD benefits and denied LWOP benefits. The claimant filed separate civil actions, and the district court held a consolidated bench trial applying an arbitrary and capricious standard of review. The district court issued two separate decisions denying both LTD and LWOP benefits. On appeal, the claimant argued among other issues that the district court erred by concluding that the “any reasonable job” language in the LWOP policy was not analogous to the “any gainful employment” language in the LTD policy. In affirming the district court’s decisions in their entirety, the Second Circuit reasoned that the “any gainful employment” language in an LTD policy has been interpreted so that it would not deny LTD benefits to a person who could do “any kind of work whatsoever” so that it would assure American workers of financial security. The Second Circuit explained that the “any reasonable job” language in an LWOP policy was different in that it was meant to be a short-term benefit for the most grievously incapacitated claimants. Khesin v. Hartford Life & Accident Ins. Co., Nos. 22-1766 & 22-1767, 2024 WL 1404576 (2d Cir. April 2, 2024).
2. Is an insured denied a full and fair review if a claims administrator does not issue a written appeal decision within 60 days of the filing of an administrative appeal? No, if there is no evidence that the purported delay harmed the insured. The decedent was employed by Honeywell International in New Jersey, but his work became entirely remote in 2020 due to the pandemic, and Honeywell stopped all non-essential business travel for employees. The decedent was killed when a small private airplane that he was flying in crashed in Texas. The decedent’s wife filed a claim under the employer’s Business Travel Accident (BTA) policy, arguing that decedent was on a business trip at the time, as decedent supposedly had the authority to make his own decisions about where and how to accomplish his business objectives. After her claim was denied, the decedent’s wife filed a civil action. The district court applied an abuse of discretion standard and granted summary judgment in favor of the insurer, reasoning that the claims administrator acted within its discretion in determining that the decedent was not on a business trip at the time of his death. The Fifth Circuit affirmed, ruling that although the claims administrator did not issue a decision within the required 60-day window, the decedent’s wife could point to no harm to her caused by the delay, even pointing out that decedent’s wife availed herself of the opportunity to file the civil action after the claims administrator’s decision was due but before the decision was issued. The Fifth Circuit also held that the policy language was unambiguous, and that under the abuse of discretion standard the denial of the claim was proper. Krishna v. National Union Fire Ins. Co of Pittsburgh, Pa., No. 23-20289, 2024 WL 1049474 (5th Cir. March 11, 2024).  
3. Does an insurer abuse its discretion in determining that an insured has failed to meet its burden of establishing an entitlement to benefits if the insurer does not interview the insured and provide its own diagnosis for the insured’s treatment? No, where the insurer otherwise demonstrates that it appropriately reviewed the information that the insured submitted in support of his claim. The claimant was a traffic signal repairman and streetlight maintenance worker who was fired for poor job performance, and who filed a short-term disability (STD) benefit claim arguing that his poor performance was because of a disabling illness. In April 2020, Erickson experienced symptoms that he believed were caused by COVID, but which were never confirmed with a positive antibody test. The claimant’s physician advised him to stay home until his symptoms resolved but cleared him to return to work with no restrictions. The insurer determined that the claimant had not substantiated an inability to work so it denied his STD claim and affirmed it following an administrative appeal. The claimant filed a civil action. The claimant argued that the insurer abused its discretion because it did not affirmatively disprove that he was disabled. In granting summary judgment to the insurer, the district court ruled that the insurer acted appropriately within its discretion by thoroughly reviewing all of the information provided by the claimant and concluding based on that information that he had failed to substantiate that he had a disability that would entitle him to benefits. Erickson v. Sun Life & Health Ins. Co., No. 2:22-cv-00258-JNP-JCB, 2024 WL 1307167 (D. Utah March 27, 2024).
4. Does a claims administrator abuse its discretion by favoring the opinions of independent reviewing physicians over those of the insured’s treating physician? No, where the evidence of disability is not overwhelming, and the insurer appropriately weighted the evidence and opinions. The claimant was a nurse who developed severe anxiety and depression at the onset of the COVID pandemic. She left work in March 2020, received STD benefits and in September 2020 was approved for LTD benefits. The insurer sought an update from the claimant’s physician in February 2021, and the physician described the claimant as having “flare ups.” The insurer questioned whether that rendered the claimant totally incapacitated, and the physician indicated that it did. The insurer determined that there was not sufficient objective medical evidence to support an inability to perform her occupation, so it terminated the claimant’s benefits in February 2021. The claimant filed an administrative appeal, which the insurer denied. The insurer submitted the appeal to an independent review by five doctors with specialties relevant to her issues. The claimant filed a civil claim, which the district court reviewed under an abuse of discretion standard. The claimant argued that there was a drastic contrast between the opinion of her physician and the independent experts retained by the insurer, and based on that discrepancy the insurer’s discretion did not allow it to accept the opinions of the independent physicians over the opinion of her treating physician. The court rejected that argument, concluded that the insurer acted within its discretion in determining that the claimant was no longer eligible for LTD benefits, and granted summary judgment to the insurer on the LTD claim. The court, however, declined to grant summary judgment to the insurer on its counterclaim that it was entitled to reimbursement for certain benefits previously paid to the claimant. Wilkins v. Ascension Long-Term Disability Plan, No. 4:22-cv-00428-SEP, 2024 WL 1367050 (E.D. Mo. March 31, 2024).
5. Will a court use the de novo standard of review where the plan provides for discretionary review, but where the insurer does not issue a decision on an administrative appeal within the prescribed time? Yes, if the court concludes that the late issuance of the decision was not a minor irregularity. The claimant was a Physical Therapist Assistant who stopped working in May 2016 due to multiple conditions such as fibromyalgia. She received STD benefits, followed by LTD benefits under the “regular occupation” definition, and starting in 2018 LTD benefits under the “any occupation” definition. The insurer terminated LTD benefits in May 2022, concluding that there was insufficient evidence of a continued impairment of her ability to work, and noting that she authored a book in 2020, published essays, maintained a blog and had an active reading list. The claimant pursued an administrative appeal which the insurer denied in March 2023. The claimant then filed a civil action, and the parties filed cross motions for summary judgment. The parties agreed that the plan gave the insurer discretionary authority in reviewing claims, but the claimant argued that de novo review was required because the insurer did not issue a timely decision. The court agreed that the insurer’s failure to issue a timely decision transformed the standard of review to de novo, reasoning that failure to comply with required procedures was not a minor irregularity. In reviewing the merits of the case, the court rejected an effort by the insurer to attach “supplemental documentation” to the administrative record, because the insurer was unable to explain why the evidence was not provided during the administrative appeal. The court granted summary judgment to the claimant, ruling that she had established that she was entitled to benefits, and the insurer’s analysis that concluded to the contrary was “flatly inconsistent” with her treating physician and the insurer’s own vocational expert. The court did not rule on the claimant’s request for attorney’s fees because the issue was not fully briefed, but gave the claimant 30 days to file a renewed motion. Wonsang v. Reliance Standard Ins. Co., No. 1:23-cv-1, 2024 WL 1559292 (E.D. Va. April 10, 2024).