Our disability lawyers have reviewed hundreds of Hartford disability claims in which benefits were denied due to the definition of disability changing from “own-occupation” to “any-occupation”.
A decision rendered by the United States District Court for the Western District of Louisiana, Shreveport division, demonstrates how important it is for a claimant who is seeking to support continuing disability under an “any occupation” capacity must provide supporting evidence in order to prove that he or she qualifies for benefits under this definition. A mere statement that an individual is suffering from pain or some other limiting factor is not going to be adequate.
The claimant in this case against Hartford might have had a chance to prove his case had he consulted with a disability attorney prior to his claim denial in order to prepare for the change of disability definition from own occupation to any occupation. A disability claimant should never submit an ERISA Appeal without legal representation.
Background of Disability Claimant
John R. Robinson was an employee of CVS Pharmacy for 25 years. He began as a clerk and worked his way up to being a store manager. For the seven years before his disability, he had been store manager. His job was quite active, and the daily requirements of his job included standing, walking, squatting, kneeling, bending, stooping, and lifting.
Overview of Hartford Disability Plan
The long-term disability policy that he participated in as a CVS employee was issued by Hartford. The disability plan provided that Robinson would be eligible for disability benefits if he was disabled for 180 days, a time known as the Elimination Period. For the 24 months following the elimination period, Robinson would be qualified for disability benefits if he suffered an injury or sickness that prevented him from working in his “own occupation”.
Own Occupation Disability
On February 3, 2005, Robinson was attacked in the store by shoplifter. He suffered a partial tear of the anterior cruciate ligament in his left knee as a result. This required knee surgery in May 2005 and physical therapy between May and September 2005. He was released to work after this, but his physician ordered the following restrictions: no, squatting, crawling, kneeling, stair climbing, or lifting over 20 pounds. This was a problem because these activities were basic requirements for his job. He approached his supervisor on September 28, 2005 regarding these restrictions. He was informed that his supervisor would not be able to accommodate these restrictions.
As a result, Robinson applied for long-term disability benefits. His application was approved under the “own occupation” standard from November 19, 2005 through November 18, 2007. Before the end of this time, Hartford began reviewing whether Robinson would qualify for benefits under the “any occupation” terms of the disability policy.
Hartford sent a functional assessment letter (FSA) to Robinson’s treating physician in May 2006. In the FSA his physician reported that he was capable of performing full-time work as long as it was primarily sedentary and would allow Robinson just stand and stretch whenever needed. His doctor recommended that he should not lift anything heavier than 40 pounds, that he should not be required to do any kneeling and the amount of stooping, squatting, and climbing also needed to be limited.
Vocational Assessment for Any Occupation
Hartford, then ordered a vocational assessment in December 2006 from an in-house rehabilitation clinical case manager. The case manager reviewed Robinson’s employment history and experience along with his education and military experience. She compared this information with the functional abilities reported by Robinson’s treating physician.
Using a computerized system that cross referenced Robinson’s qualifications against 12,741 occupations, she reached the conclusion that there were a number of alternative sedentary, semiskilled and skilled occupations that Robinson would be able to find work in. He qualified to work as a supervisor, and order taker, a manager in retail sales, supervisor of central supply, supervisor of terminal operations, and manager of a recreational facility. These were all positions that were available in the area of Louisiana in which Robinson lived, and which paid a respectable wage.
Eleven months prior to the expiration of the own occupation period, Robinson was notified on December 19, 2006 that Hartford would continue paying benefits through the full “own occupation” phase of his disability plan, which expired on November 18, 2007. He was informed that based on his medical information and a vocational assessment, Hartford would terminate his benefits. Hartford told Robinson that he could still provide new medical or vocational information before his benefits expired, if he wished to demonstrate that he was still disabled under the “any occupation” phase of the disability plan.
As the date for the “any occupation” phase approached, Hartford sought updated medical information and records so it could assess whether there had been a change from the prior reports that Robinson had attained at least sedentary work capabilities.
One report Hartford obtained came from an orthopedic surgeon who conducted range of motion testing and a comprehensive physical examination, and reported on July 26, 2007 that Robinson was capable of performing sedentary to light duty activities. He confirmed that Robinson should not lift more than 20 pounds, that he could lift 20 pounds occasionally and that he could lift up to 10 pounds frequently. The orthopedic surgeon suggested that Robinson would not be able to walk or stand for extensive periods of time, and that he would need frequent changes in position.
On October 9, 2007, Hartford confirmed that it had performed a review of his qualifications under the “any occupation” standard of disability under the long-term disability policy. Hartford informed him that he did not qualify under that standard. The letter informing him that he would not continue receiving disability benefits provided him with a list of the jobs they had found that he qualified for based upon his qualifications, experience, training and work history, with accommodations for his functional abilities. He was also informed that he had the right to appeal. Hartford indicated its intention to review any information that he provided in the event that he did appeal.
Appeal of Termination of Disability Benefits
Robinson did appeal Hartford’s decision to terminate his long-term disability benefits in January 2008. His appeal was a simple two-page, handwritten note which did not contain any new or additional medical information. Prior to submitting his appeal, Mr. Robinson should have hired a disability attorney to handle his ERISA Appeal. He reported that his condition was continuing to deteriorate and that the pain that he experienced have moved into his left hip.
During its processing of the appeal, Hartford reviewed the existing medical information, because Robinson had failed to present any new information that might change the decision already reached. Three areas were reconsidered. 1) The most recent physical examination and medical evaluation in Robinson’s file, which had been ordered by the Social Security administration on July 26, 2007. 2) The opinion of the physician performing the physical exam that Robinson was capable of sedentary to light duty activities, along with the observation that he suffered no upper extremity limitations. 3) A telephone interview conducted on July 27, 2007 in which Robinson had reported that he had not seen his treating physician since May 8, 2006, when he was diagnosed as having reached maximum improvement. 4) The FSA prepared by Robinson’s treating physician on May 8, 2006. 5) The findings of the vocational assessment, which found Robinson was qualified to fill a number of positions that accommodated his education, training, experience, work history and functional abilities.
Upon completing this review, Hartford notified Robinson on February 10, 2008 that its decision to terminate his long-term disability benefits was final and that the appeals process was closed.
ERISA Suit for Arbitrary and Capricious Termination of Disability Benefits
Robinson then filed suit under the Employee Retirement Income Security Act (ERISA), asserting that Hartford had arbitrarily and capriciously terminated his long-term disability benefits. He also contended that Hartford had not paid him the correct disability benefits.
Abuse of Discretion to Review Hartford Decision
The first matter for the Court to decide was the standard of review it should use. Because Hartford was the administrator of the policy and also had discretionary authority to determine whether Robinson was eligible for benefits, the Court determined that the abuse of discretion standard applied. The Court would also look at whether a structural conflict of interest existed, as stipulated by Glenn, as one of the factors it would take into account in determining whether an abuse of discretion had taken place.
When the Court reviewed the administrative record, it found that there was a record regarding a Social Security award. But this award notice was only one page long, and a very brief summary. It did not include any information as to how Social Security had reached its determination. Without this information Hartford could not compare its definition of disability against that of the Social Security administration. And thus Hartford could not be expected to address this finding.
The Court found that Hartford had based its decision that Robinson did not satisfy the “any occupation” definition of the policy on the facts presented to the insurance company. In Ellis v. Liberty Life Assurance Co. of Boston, the Court had found a decision becomes arbitrary when it has no rational connection between the known facts and the decision or between the found facts and the evidence.” In this case, Hartford’s decision appeared to be rationally connected to the facts and evidence.
The Court found that the two-page note Robinson submitted failed to supply any additional information worth Hartford considering. But the administrative record reflected that Hartford still conducted a completely new review of his file in response to his appeal.
The Court also found that both of Hartford’s denial letters were adequate and designed to allow Robinson to successfully appeal Hartford’s determination that he no longer qualified under the “any occupation” phase of the disability plan.
Failure to Exhaust Administrative Remedies
The Court refused to consider Robinson’s complaints that his benefits have not been calculated correctly. It did so, because Robinson had never raised the issue with Hartford, during his appeals process. This meant that the issue was time-barred for failure to exhaust his administrative remedies.
The Court cited two cases heard in the 5th Circuit which have established the principle that under ERISA plans, claimants must exhaust all administrative remedies. Lacy v. Fulbright & Jaworski. Ltd. Liability Partnership Long Term Disability Plan and Denton v. First Natl Bank of Waco. The administrative record revealed that Robinson had never raised this issue before Hartford issued its final appeal decision on February 18, 2008. Even when his disability attorney requested an explanation of how benefits had been calculated, how the workers compensation offset worked, and whether or not the Social Security award had been considered on August 7, 2008, there had been no response to Hartford’s letter that explained its benefit calculations on September 2, 2008. Failure to respond to this letter demonstrated to the Court that Robinson had not exhausted his administrative remedies on this issue.
The Court concluded after reviewing all the information, that Hartford had not abused its discretion when it determined that Robinson did not qualify for long-term disability benefits under the “any occupation” definition of his long-term disability benefit plan. The Court also found that he could not contest his benefit calculations because he had not exhausted his administrative remedies. Robinson’s claims against Hartford were dismissed with prejudice. This means that the Court considers the decision final and without appeal.