Plan Interpretation

Subscribe to Plan Interpretation via RSS

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

In Gabriel v. Alaska Electrical Pension Fund, 755 F.3d 647 (9th Cir. 2014), a venal claimant met a not-very competent plan administrator, and the result was a helpful discussion of limits on make-whole equitable claims. [Note, on December 16, 2014, the Ninth Circuit panel withdrew this opinion, and replaced it with a new one, at 773 F.3d 945]
Continue Reading Ninth Circuit Discusses Limits On Make-Whole Equitable Remedies for Breach of Fiduciary Duty

In Hall v. Met. Life Ins. Co., 750 F/3d 995 (8th Cir. 2014), the plaintiff’s husband participated in a life insurance plan, in which he named his son as beneficiary. After he married plaintiff, he executed a change of beneficiary form, but it was not filed until after he died. Shortly before his death, he executed a will that purported to designate plaintiff as beneficiary of the life benefit. Met Life denied plaintiff’s claim, and the court upheld the determination.
Continue Reading Administrator is Entitled to Require Strict Compliance With Plan Procedures

In Waldoch v. Medtronic, Inc., 757 F.3d 822 (8th Cir. 2014), the plaintiff argued that the plan’s grant of discretionary authority was overridden by procedural irregularities in plan administration, compelling use of the de novo standard of review. To counter that argument, Medtronic submitted an affidavit with supplemental evidence demonstrating its claims…

Cultrona v. Nationwide Life Ins. Co., 748 F.3d 698 (6th Cir. 2014), involved the denial of benefits under an accidental death policy on the ground that the plaintiff’s husband’s death was excluded due to his intoxication. The court found that determination to be reasonable.

But the court also affirmed the district court’s determination…

A divided panel on the Eleventh Circuit has imposed on plan administrators “an obligation to consider the evidence presented to the SSA” by the claimant. While it is not particularly novel to hold that an SSDI award must be considered – most circuits require disability claim administrators to consider an SSDI award, or at least to explain why it is not relevant – the Eleventh Circuit seems to have taken the requirement a step further, requiring the administrator to seek out the evidence the SSDI award was based on, and perhaps even delay an adverse decision until the SSDI process is completed.
Continue Reading Must disability claim administrators now obtain the SSDI file in the 11th Circuit?

I imagine that, for a federal judge, getting reversed is not pleasant, even though it’s part of the job. Well, pity poor Judge Larimer of the Western District of New York, who has now been reversed three times in the same case – twice by the Second Circuit and once by the Supreme Court.
Continue Reading Frommert v. Conkright: The Saga Continues, or “Strike Two for Xerox”

In Heimeshoff v. Hartford Life & Acc. Ins. Co., 571 U.S. __ (Dec. 16, 2013) , the Supreme Court held that a contractual limitation provision under which the clock begins to run before administrative remedies are exhausted  is enforceable under ERISA, as long as a reasonable time is left after exhaustion is expected to occur.

Julie Heimeshoff filed a claim with Hartford for benefits under a disability plan established by WalMart. The plan provided that litigation must be commenced within three years after proof of loss was due. The Court noted that, under applicable ERISA regulations, the typical ERISA claim would be fully administered in about a year, perhaps as long as 16 months. Thus, one would ordinarily expect a claimant to have 1-1/2 to 2 years to bring suit after a claim was fully administered.

When Heimeshoff’s claim was fully administered, she had about 1 year left under the limitation provision to sue. But she waited almost three years, making her suit almost 2 years late under the contractual provision. Hartford and WalMart moved to dismiss Heimeshoff’s action as untimely, and the District of Connecticut agreed, applying Second Circuit precedent enforcing an identical limitation provision. Heimeshoff appealed, and the Second Circuit affirmed on the same basis. The Supreme Court granted certiorari to  resolve a split in the circuits regarding the enforceability of a contractual limitation provision that starts to run before administrative remedies are exhausted. (The District Court and the Second Circuit also found that Heimeshoff could not establish a basis for equitable tolling of the limitation period; the Supreme Court declined to grant certiorari on that question).

The Supreme Court unanimously affirmed the dismissal of Heimeshoff’s action.
Continue Reading Heimeshoff v. Hartford Life: Supreme Court Holds that Plan Can Start Limitation Clock Before Benefit Claim Accrues

Every so often a bit of legal synchronicity seems to occur. Sometimes its personal, like when you have several cases with the same uncommon issue, or multiple cases in the same rarely visited court. In 2013, there appears to be a larger force at work that has caused three circuits to address the question whether a plan that requires proof to be satisfactory to the insurer confers discretion.

It has long been clear that a plan document must give discretionary authority to an insurer in order to require courts to conduct an arbitrary and capricious review. It is also well-established that no “magic words” are required to give discretion. However, the vast majority of plans intending to grant discretion use the magic words anyway, and say that the insurer has “discretionary authority to determine claims and construe the plan” or some variant.

But what happens when a plan does not use the magic words?  
Continue Reading Effect of Requiring “Satisfactory” Proof Is A Popular Issue in the Circuits This Year