AIG Repeatedly Denies Disability Benefits to a Colorado Woman with Fibromyalgia After Change of Disability Definition

The claimant, Ms. A, filed an ERISA disability lawsuit against AIG. The Long Term Disability Plan provided by her employer after her initial claim for disability benefits was denied by AIG. The Judge found that the denial of long term disability benefits to Ms. A did not take into account or consider all of Ms. A’s impairments and whether the impairments impacted her ability to work. Ms. A’s claim was remanded back to the Plan for further fact finding and reconsideration of her claim for benefits. On remand, Ms. A’s claim was handled by AIG, who insured the LTD Plan.

After completing its review on remand, AIG awarded Ms. A long term disability benefits for a limited period of time finding that the claim file supported her inability to perform her own occupation. AIG claimed that they were continuing to investigate her claim for extension of benefits beyond the date when the definition of “Total Disability” changed to the “any occupation” definition. Subsequently, AIG denied continued benefits stating that Ms. A no longer met the Plan’s definition of disability in that she was able to perform other gainful occupations. Ms. A then filed a second lawsuit against the LTD Plan.

The court found, once again, that AIG abused its discretion in reviewing Ms. A’s claim for continued long term disability benefits.

Ms. A Claimed AIG Committed Procedural Errors in the Handling of Her Claim

In her second lawsuit, Ms. A alleged that several procedural errors occurred in the handling of her claim. The first claimed error was that her claim was reviewed by AIG on remand, though AIG was not the Plan Administrator, had not made the initial decision to deny her claim for benefits, and was not properly delegated the authority to conduct the claim review. Ms. A also argued that AIG did not timely review her claim and took nearly a year and a half to make a final decision on her claim. AIG also continuously misrepresented that it did not possess certain records in order to conduct the review of Ms. A’s claim, even though there was proof that AIG had been provided all of the requested records on numerous occasions.

The court found that, where there are procedural defects or irregularities, the normal remedy is to review the claim de novo. However, due to the fact that AIG was not granted authority to make benefit determinations and interpret the terms of the LTD Plan, the parties had already agreed that the case was to be reviewed by the court on a de novo basis.

AIG Abused its Discretion by Relying on Improper Reports of its Own Experts

In support of its decision to deny continued LTD benefits, AIG cited to reports of its two expert physician consultants, and a vocational expert.

In the first Order of Remand, the court specifically instructed the LTD Plan to conduct a proper assessment of the combined impact of Ms. A’s fibromyalgia and psychiatric impairments and how they impact her functional ability to work. The court further noted that they key issue was the nonphysical requirements of Ms. A’s occupation and the extent to which her impairments may impact same.

The court points out that AIG did not obtain a psychological evaluation of Ms. A to address the combination of her psychological and physical impairments, nor did it obtain an FCE to address the issues that were ordered to be investigated further upon remand. Instead, AIG retained the 2 physician consultants to perform records reviews: a clinical psychologist and an internal and occupational medicine physician.

The internal and occupational medicine physician did not address Ms. A’s psychological impairments or how they related to her fibromyalgia. The clinical psychologist addressed both impairments but assessed them independently and did not address how the psychological impairments impacted the fibromyalgia. Both physicians either ignored or discredited the opinions of Ms. A’s treating physicians, as well as the findings of testing that was conducted. Further, the medical records provided by Ms. A’s treating physicians did not address the combined effect of her psychological and physical impairments. Additional testing to determine this was recommended, such as an FCE. However, AIG failed to conduct the recommended additional testing. Accordingly, the court found that the opinions of AIG’s expert physician consultants were deficient because the record was insufficient for them to make an informed decision regarding the combined impact of Ms. A’s impairments.

AIG’s physician consultants did not distinguish between Ms. A’s impairments before the change in definition date (when Ms. A was determined to be totally disabled) and after that date, when she was found to no longer be totally disabled. Rather, both physicians opined that Ms. A was not disabled at any time, which was contrary to AIG’s findings that, prior to the change in definition date, Ms. A was found to be totally disabled.

With regards to Ms. A’s fibromyalgia diagnosis, both physician consultants ignored the Court’s prior Order of Remand which stated that relying on a lack of objective findings as a basis to deny LTD benefits was not supportable by law as objective findings are not necessarily required in connection with a diagnosis such as fibromyalgia since there are no clinical tests which support such a diagnosis or its symptoms. The court also noted that it was unclear how AIG’s psychologist expert was qualified to provide an opinion regarding fibromyalgia which fell outside his area of expertise.

The court also noted defects in the vocational assessment performed by AIG’s vocational expert. First, the vocational expert was only provided the reports of the 2 physician consultants who opined that Ms. A was able to perform sedentary or light work full time. She was not provided any of the contrary medical records from Ms. A’s treating physicians. One of Ms. A’s treating physicians opined that she was only capable of working 25 hours per week, and an FCE that was conducted noted “some performance deficits.” Moreover, the vocational expert did not assess Ms. A’s functional capacity or analyze the nonphysical requirements of the jobs she found Ms. A was capable of performing, as per the Order of Remand.

As with the physician consultants, the Court noted that the findings of AIG’s vocational consultant directly contradicted AIG’s own determination that Ms. A was totally disabled from her own occupation. Instead, the vocational expert found that Ms. A was, in fact, able to perform her own job at all times. Neither AIG, nor the vocational expert, provided an explanation as to this discrepancy, nor did AIG explain why it chose to disregard the vocational expert’s opinion that Ms. A was able to perform her own occupation prior to the change in definition date, but then relied on the finding to determine that Ms. A was no longer disabled from performing her own occupation after the change in definition date.

Remand and Award of Attorney’s Fees and Costs

The court determined that the LTD Plan, through AIG, did not make adequate findings to the combined impact of Ms. A’s impairments on her ability to work, as was ordered in the first Order of Remand. The court also determined that AIG’s decision that Ms. A was not totally disabled after the change in definition date was not supported by substantial evidence.

Unfortunately for Ms. A, the Court found that the proper remedy was to remand the case back to the LTD Plan and AIG for further fact finding and also to determine whether Ms. A met the Plan’s definition of Partial Disability.

Ms. A asked for an award of attorney’s fees and costs from both her prior lawsuit and the instant lawsuit. It is well-established that an attorney fee award in an ERISA action may be appropriate if the claimant shows “some degree of success” on the merits of the claim, more than just a “trivial success” or a “purely procedural victory.” Ms. A argued that an award of attorney’s fees and costs was appropriate because her claim was approved, even if only partially, on remand. She also argued that she was successful in the second lawsuit once again due to the second remand order.

The court denied the attorney fee award for the second lawsuit, but stated that if she achieved success on remand (ie, reinstatement of benefits), she may renew her request for attorney’s fees at that time. The court found that Ms. A was, in fact, entitled to an award of attorney’s fees and costs with regard to the first lawsuit and that she did show success on the merits.

Attorneys Dell & Schaefer did not represent Ms. A in her disability claim, appeal or lawsuits. If you have questions regarding your claim for disability benefits, or if your disability claim has been denied, feel free to call Disability Attorneys Dell & Schaefer for a free consultation.

Read more about AIG disability claims on this page.


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