On December 19, 2016, the Department of Labor ended a year-long process to update the regulations governing claim procedures for disability plans, 29 C.F.R. §  2560.503-1. The text of the new regulations, and the DOL’s explanation of changes and the comment process, can be found here.

The DOL’s express goal in establishing these new regulations is to “strengthen[] the current rules primarily by adopting certain procedural protections and safeguards for disability benefit claims that are currently applicable to claims for group health benefits pursuant to the Affordable Care Act.” The DOL concluded that a stronger regulation was needed, in part, because “disability cases dominate the ERISA litigation landscape today[.]”
Continue Reading DOL Issues New Regulations for Plans Providing Disability Benefits

In Okuno v. Reliance Standard Life Ins. Co., 836 F.3d 600 (6th Cir. 2016), the court considered the proper interpretation of a mental illness limitation on coverage for disabilities “caused by or contributed to by” mental illness.
Continue Reading Sixth Circuit adopts “but for” test for applying mental illness limitation

In Santana-Diaz v. Metro. Life Ins. Co., 816 F.3d 172 (1st Cir. 2016), the court held “that ERISA requires a plan administrator in its denial of benefits letter to inform a claimant of not only his right to bring a civil action, but also the plan-imposed time limit for doing so. Because MetLife violated this regulatory obligation, the limitations period in this case was rendered inapplicable[.]” The First Circuit thus reversed the district court, which had held that the failure to provide notice was not dispositive because plaintiff was aware of the limitation through the group policy.
Continue Reading Failure to disclose contractual limitation in ERISA claim denial letter is per se prejudicial

Shaw v. AT&T Umbrella Ben. Plan No. 1, 795 F.3d 538 (6th Cir. 2015) concerned denial of plaintiff’s claim for disability due to chronic neck pain. The district court affirmed the denial, but the 6th Circuit reversed, finding the determination arbitrary and capricious.

The court took issue with much of the claim

In Sirva Relocation, LLC v. Richie, 794 F.3d 185 (1st Cir. 2015), ERISA preemption met federal abstention, and lost. Knight was an employee of Sirva, which had a disability plan insured by Aetna. Knight received 24 months of disability benefits, which were then terminated under a mental illness limitation; he responded by filing a discrimination charge against Sirva and Aetna with the Massachusetts Commission Against Discrimination (MCAD), alleging that Sirva and Aetna paid disparate benefits depending on whether the claimant suffered from a physical or mental impairment. Sirva and Aetna moved to dismiss, arguing ERISA preemption, and, after a three-year wait, MCAD denied the motion without prejudice.
Continue Reading First Circuit Applies Younger abstention doctrine to ERISA preemption claim

In Stiso v. Intl. Steel Group, 2015 WL 3555917 (6th Cir. June 9, 2015), the court reversed a ruling by the district court that dismissed a claim for make-whole relief, and directed the district court “to grant an equitable remedy [against the employer and insurer] equivalent to the promised increase in benefits to plaintiff.”

The decision was written by Judge Merritt, a senior judge who did not participate in the en banc decision in Rochow v. Life Ins. Co. of N. Am., 780 F.3d 364 (6th Cir. 2015), which rejected a claim for make-whole relief in the form of disgorgement of profits. The Stiso panel also included Judge Boggs, who was in the majority in Rochow, and Judge Stranch, who had issued the lengthy dissent in Rochow.
Continue Reading Sixth Circuit At it Again: Orders Make-Whole Relief in Disability Benefit Claim

In Witt v. Metro. Life Ins. Co., 772 F.3d 1269 (11th Cir. 2014), the court answered the question: “what happens when the defendant says it issued a formal denial letter and the plaintiff says he never received the letter, but it is undisputed the defendant terminated benefits and did not pay the plaintiff any benefits for 12 years?”
Continue Reading ERISA Claim Accrues Upon Clear Repudiation of Claim, Even if There is No Formal Denial Letter

In Brake v. Hutchinson Tech. Inc. Grp. Disability Income Ins. Plan, 774 F.3d 1193 (8th Cir. 2014), the court determined that, where a policy insuring a South Dakota resident was issued in Minnesota to a Minnesota employer, and provided that it was governed by Minnesota law, then a South Dakota regulation precluding discretionary clauses

In Johnson v. United of Omaha Life Ins. Co., 775 F.3d 983 (8th Cir. 2014), the court determined that the district court erroneously reviewed the administrator’s determination under the de novo standard, instead of the arbitrary and capricious standard. It ruled that it did not need to decide whether procedural irregularities still could result in a change of the standard of review.
Continue Reading Eighth Circuit Leaves Open Possibility That Procedural Irregularities Can Preclude Discretionary Review

In George v. Reliance Standard Life Ins. Co., 776 F.3d 349 (5th Cir. 2015), a case of first impression, a divided Fifth Circuit panel decided when a disability is “caused by or contributed to by” a mental illness. The plaintiff was a helicopter pilot who was disabled due to pain suffered at the site of a leg that had been amputated before he started the job in question. He also suffered from depression and PTSD. The insurer determined that he could perform sedentary work, but that his mental illnesses would prevent him from working. Thus, the insurer concluded that the mental illness “’contributed to’ his overall impairment status,” resulting in the application of the mental illness limitation in the policy.
Continue Reading Court Provides Narrow Interpretation for Mental Illness Limitation