In Mendez v. FedEx Express and Aetna, plaintiff Miguel Mendez had worked 28 years as a delivery driver for FedEx when he was severely injured in a car wreck. He suffered a traumatic brain injury (TBI), a splintered pelvis and multiple other orthopedic injuries. Aetna, plan administrator for FedEx, initially granted Mendez’s application for disability benefits.
Since Mendez was unable to work in his own occupation as a delivery driver, he received disability benefits for 24 months according to the provisions of his disability insurance. After that time, he was required to prove he was totally disabled in order to continue receiving disability benefits. Meanwhile, at Aetna’s insistence, Mendez applied for and was awarded Social Security Disability benefits. Aetna collected a portion of those benefit payments as an offset to its own payments to Mendez.
Ultimately, Aetna decided that Mendez was not totally disabled so not eligible for long term disability payments. After he exhausted his administrative appeals, Mendez filed this ERISA lawsuit. After review, the District Court found in favor of Mendez, holding that “Mendez was denied benefits to which he is clearly entitled. Thus, rather than remanding, Aetna is ordered to pay Mendez the long-term disability benefits for which he is qualified under the Total Disability definition of the plan.”
Three Errors Made by Aetna in Denying Long-term Disability Benefits
In making its decision that Aetna acted in an arbitrary and capricious manner in denying long-term benefits to Mendez, the Court found Aetna made three specific errors.
· Aetna relied on opinions of medical professionals who did a paper review of the files. No one conducted an in-person, face-to-face examination. The law allows insurers to rely on the opinions of file reviewers, even if they conflict with the report of treating physicians. But, in this case, these reviewers “disregarded the extensive complaints of severe pain recognized by Mendez’s treating physicians.” Instead, even though Aetna acknowledged his extensive injuries, it denied him benefits without even examining him.
· The Court found that the reviewing physicians had a conflict of interest and were “repeat players that have a material, if not necessarily disabling conflict of interest.” This factor alone does not automatically render Aetna’s opinion arbitrary and capricious.” But, it “is a factor that weighs against it.”
· Aetna did not “adequately explain” why it was ignoring the Social Security Administration’s award of benefits to Mendez. Aetna simply stated, that the Social Security Administration used different criteria than Aetna did in evaluating disability claims. This was not enough, particularly when Aetna:
· 1) encouraged Mendez to apply for SS disability payments;
· 2) benefited financially from his award of SS disability benefits; and,
· 3) failed to explain why its position was different than the SSA.
Based on all these reasons, the Court found that Aetna’s decision to deny Mendez long-term disability benefits was arbitrary and capricious.
No Need for Remand When Claimant is Clearly Entitled to Benefits
The Court noted that when there is a problem with the “integrity of the plan’s decision making process” the remedy is to remand to the plan administrator. “When the objective medical evidence clearly establishes that the claimant ‘was denied benefits to which he is clearly entitled’ the Court may award benefits without remanding.” The court then listed Mendez’s multiple medical issues, the many medications he was taking and his treating physicians statements that Mendez could not stand for more than 30 minutes or sit for one hour, has balance problems and limited tolerance for ambulation and concluded that he was clearly entitled to disability benefits and remand “would be a useless formality.”
This case was not handled by our office, but we think it can be helpful to those who are struggling with their insurer on evidence sufficient to prove they are totally disabled. If you have any questions about this, or have any other problems with issues surrounding your disability benefits, contact one of our disability attorneys at Dell & Schaefer.