CIGNA can not raise new arguments for disability insurance claim denial at the trial level
When Douglas Juszynski brought his long term disability insurance lawsuit against Life Insurance Company of North American (LINA / CIGNA) before the U.S. District Court for the Northern District of Illinois, Eastern Division, he was exercising his rights under ERISA to compel CIGNA to reinstate his long term disability benefits. This case, heard in March 2008, answers the question of whether a disability insurance company can present new reasons for terminating long-term disability benefits when those reasons were not given to the claimant before the final letter of denial.
Let’s See How the Illinois Court Reviewed this Case
Juszynski worked in service of Marconi Medical Services, Inc. as a Senior Service Engineer from February 1969 through July 2001. In July 2001, Juszynski ceased working due to peripheral neuropathy and back, neck and leg pain. He applied for and received long term disability benefits until September 2005, which was 24 months of payments. Thereafter LINA terminated his long term disability insurance benefits.
Juszynski believed that he remained entitled to long term disability benefits, and CIGNA should not have terminated the payment of his long term disabilities benefits after 24 months. The following evidence supported his claim:
- A report from his physician Dr. MacEntee showed that he was permanently disabled person.
- After bypass surgery, his treating physician, Dr, Choudry, submitted a medical report that he is unable to work at that time.
- The social security Administration had also declared that he was permanently disabled person and entitled to long term disability benefits. Dr. MacEntee sent a follow up evaluation form to LINA stating his view that patient is disabled.
After reviewing his updated medical report LINA approved continuing long term disabilities benefits but once again notified Juszynski in October 2005, that the long term disability company was terminating his benefits because Juszynski had failed to produce evidence of his continued total disability to work. Juszynski appealed twice, but on July 2006, CIGNA upheld its denial of long term disabilities benefits.
District Court Reviews Long-term Disability Termination De Novo
Juszynski had no choice. In order to have his benefits reinstated, he would have to hire a disability attorney and file an ERISA lawsuit. The Illinois District Court found that a de novo review would be the proper standard of review using the Supreme Court holding in the case of Perlman v. Swiss Bank.
Juszynski’s disability attorney argued that once LINA had approved his claim; it could not terminate benefits, if the medical condition worsened. Juszynski cited a number of cases in which the courts held that once an insurer approves a claim it cannot terminate the long term disability benefits unless a claimant’s condition improves.
The disability attorney claimed that all evidence favored continuation of Juszynski’s long term disability benefits. LINA’s contention was that based on the medical reports and opinions of Dr. Ivkov, Dr. Choudry, Dr. Patel and Dr. MacEntee, Juszynski’s condition was indeed improved.
A certificate from Dr. Ivkov stated that he was capable of performing the duties of a sedentary occupation. His disability attorney argued that Dr. Ivkov had merely checked a box which indicated his opinion that Juszynski could sit between 2.5 hrs and 5.5 hrs. This did not prove he could work a full day.
In his reply to LINA’s request for medical information, Dr. Choudry left neither positive nor negative remarks in respect to Juszynski’s working capability.
LINA contended that none of the three specialists he was seeing held the opinion that Juszynski was totally disabled from any occupation. Only Dr. MacEntee, a general practitioner without any specialization or expertise, held the opinion that Juszynski could not perform the duties of a sedentary occupation.
On the other side, Juszynski’s long-term disability attorney argued that, Dr. MacEntee’s medical reports had been accepted by LINA initially. This doctor had reported to LINA at least five times.
Disability Attorney Argues that Disability Plan Ignored Social Security Disability Decision
When CIGNA terminated Juszynski’s benefits, they failed to take in to account the determination of the Social Security Administrator. LINA was aware of this determination. In fact it reduced LINA’s payout of long term disability benefits to $1174 per month. In Anderson v. Operative Plasterers & Cement Masons international Ass’n Local No. 12 Pension & Welfare Plans, the Court held that that the findings of the Social Security Administration are key evidence with respect to an ERISA claim. LINA never addressed why it need not consider this decision during the whole administrative appeals process.
LINA Points to Alcoholism Limitation in Long-term Disability Benefit Plan
LINA went on to argue that the alcoholism limitation in the plan made Juszynski ineligible for benefits after he completed 24 months of long term disabilities benefits. In reply Juszynski’s disability benefit attorney argued that while there was evidence which indicated that the condition Juszynski suffered could have been due to alcoholism, LINA had never once given this as a reason for terminating his client’s benefits.
The disability attorney argued that the Court must find that LINA had waived its right to raise this objection because his client had not been given the opportunity to address this issue before the commencement of suit. LINA had waived its right to raise this issue after the fact because it had not been an issue raised while the administrative record was open.
Juszynski’s attorney argued that LINA’s attempt to invoke the alcoholism limitation of the policy was not allowed by ERISA. In addition to this issue, LINA had already generally failed to give proper notice to Juszynski with specific reasons for terminating his benefits and had failed to give him a reasonable opportunity to refute the claim denial.
After considering the facts and the evidences produced by the parties and hearing both the sides, the Court entered judgment in favor of Juszynski. LINA was ordered to reinstate Juszynski’s long term disability benefits of $1,174 per month retroactive to October 1, 2005 and to compensate Juszynski for any unpaid benefits.
Judgments like these are not only helpful to individuals, but also to others who are disabled and have their claims denied or terminated by disability benefit plans.