A lawsuit was filed recently at the District Court for the District Of New Jersey against the Prudential Insurance Company of America (Prudential) by a former employee of Horizon Blue Cross Blue Shield of New Jersey for unlawfully discontinuing benefit payments to the disabled plaintiff. In Denise Hodges V Prudential Insurance Company of America & Horizon Blue Cross Blue Shield of New Jersey (Horizon), the plaintiff Denise Hodges alleged that Prudential had contravened the provisions of the Employee Retirement Income Security Act of 1974 (ERISA) by failing to pay disability benefits to her.
The Alleged Facts of the Prudential Insurance Disabiliyt Denial
The plaintiff Denise Hodges was employed as a Member Services Coordinator for Horizon. While being an employee of Horizon, she participated in a long term disability plan which is an “employee welfare plan” as defined by ERISA. The plan was issued by Prudential with Horizon being the plan Administrator and Prudential being the Claims administrator. Under the plan, the insured is defined as being disabled if:
After 24 months of payments, you are disabled when Prudential determines that due to the same sickness or injury, you are unable to perform the duties of any gainful occupation for which you are reasonably fitted by education, training or experience.
Gainful Occupation means an occupation, including self employment, that is or can be expected to provide you with an income equal to at least 60% of your indexed monthly earnings within 12 months of your return of work.
On January 22nd 2003, the plaintiff was forced to stop work with Horizon due to a voice disorder. Because of the voice disorder, the plaintiff is unable to speak normally or for an extended period of time. Her medical condition was made worse by gastroesophageal reflux disease (GERD). The plaintiff was also said to be suffering from a balance disorder and sleep apnea.
As a result of her disabling medical conditions, the plaintiff submitted a claim for long term disability (LTD) benefits and was approved by Prudential on August 18th 2003 after their in-house medical specialists reviewed the medical evidence. During this time, the plaintiff was approved for LTD benefits under the “own occupation” definition of total disability as stipulated in the plan. The plaintiff received disability benefits for two years from Prudential under the “own occupation” definition.
Under the plan, the plaintiff was entitled to continue receiving long term disability benefits after two years if she was “unable to perform the duties of any gainful occupation for which “the participant is “reasonably fitted by education, training or experience”. During this time, the plaintiff had to undergo a review to see if she falls within the definition of being disabled under the “any gainful occupation” definition.
Termination of LTD Benefits
On July 26th 2005, the plaintiff was informed by Prudential that it was terminating her LTD benefits. According to the letter sent by Prudential to the plaintiff:
At this time we do not find that you meet the definition of disability as outlined above. We were in the process of gathering medical information for review to determine if you would qualify for disability beyond the initial 24 months period. In doing, so we had a representative meet with you at your home on March 5, 2005. This representative gathered the names of your treating providers as well as your stated current activities of daily living. After a thorough evaluation of the above information, we have determined that as of July 31, 2005, you no longer meet the definition of being Totally Disabled from performing the duties of your own occupation as defined above. Therefore, we have terminated your claim for LTD under the Horizon Blue Cross Blue Shield of NJ effective July 31, 2005.
No substantive explanation was offered by Prudential as to why it was terminating the plaintiff’s LTD benefits. According to telephone log in the administrative record, Prudential explained its determination to the plaintiff in the following manner below:
I explained our decision that we do not feel that she is disabled from her own occ. That the records do not support an impairment. I explained who I requested records from and who responded. I explained I used all of the information that she gave to our representative in home visit. I explained the records do not document ongoing problems with sleep apnea or balance/nausea. I explained we would expect GERD to be resolved with meds and the hoarseness to be better as well. Clearly her voice is hoarse when we speak on the phone but the medical information does not tell us that or why or present any of the problems that she is stating.
Prudential Continues to Deny disability Claim after Three Apeals and Approval of Benefits By Social Security Disability
On November 14th 2005, the plaintiff submitted an appeal to Prudential’s decision to deny her LTD benefits. To support her appeal, the plaintiff detailed her medical conditions and provided more explanations that the only treatment recommended by her treating physicians was increased medication. She also advised Prudential that all the supporting medical documents were provided to Allsup, a vendor provided by Prudential to assist the plaintiff to obtain Social Security Disability benefits.
On March 28th 2006, the plaintiff was advised by Prudential that her appeal was unsuccessful. According to the lawsuit, neither the Administrative records nor the letter sent to the plaintiff indicated any effort by Prudential to explain its prejudiced and conflicted review of the plaintiff’s claim for LTD benefits. The plaintiff made another appeal to Prudential to reconsider its decision on September 21st 2006. She supplemented her second appeal on February 26th 2007 with documentation from the Social Security Administration (SSA) awarding her disability benefits.
Nevertheless, Prudential denied the plaintiff’s second appeal on March 8th 2007 in a letter devoid of any substantive information required by ERISA. On February 7th 2010, through the plaintiff’s disability attorney, the plaintiff submitted another appeal contesting Prudential’s claim determination. This third appeal was also denied by Prudential on March 10th 2010.
The plaintiff alleged that Prudential did not provide a fair and proper review of her claim and hence breaching its fiduciary duty by:
- Reviewing selectively the plaintiff’s medical records, highlighting only those portions that purportedly supported the decision to deny benefits;
- Wrongfully relying on the medical records it did not properly update in accordance with the Plan.
- Failing to provide a complete copy of the administrative record to the plaintiff.
- Knowingly utilizing and relying upon the opinion of a biased medical profession in reaching its determination to deny long term disability benefits.
- Ignoring objective medical information that supported each of the plaintiff’s medical conditions.
- Failing to consider the co-morbidity of the plaintiff’s medical conditions on her physical and mental functionability.
- Wrongfully correlating the plaintiff’s limited daily activities with her ability to work as a full time computer programmer.
- Failing to properly consider the plaintiff’s reported subjective symptoms.
- Failing to perform any type of vocational analysis.
- Placing its financial interests first above plaintiff’s interests under the Plan to receive disability benefits.
Relief sought by the Plaintiff
The plaintiff alleged that she had requested through her attorney a complete disclosure of the plan information and documents but has not been provided with by Prudential in violation of its absolute obligation under ERISA. As such, the plaintiff claims that she is entitled to the relief as provided for under ERISA in the sum of $110.00 per item, per day from the first day of said violation.
The plaintiff further contended that due to Prudential’s failure to pay LTD benefits as required under the plan to the plaintiff, she had been forced to resort to legal action to recover those LTD benefits and as such seek the following relief from the Court:
- An award of LTD disability benefits to which the plaintiff is entitled to under the Plan
- A determination that Prudential has waived or is stopped from enforcing any eligibility requirement contained in the policy of group disability insurance that funded the Plan;
- A determination that the plaintiff is entitled to interest for all retroactive benefits owed by Prudential;
- An award of monetary penalties with respect to the Prudential’s failure to provide information upon written request.
- An award providing the plaintiff all the non-LTD benefits to which she would have been entitled but for the Prudential’s denial of her disability claim.
- An award of attorney’s fees and costs of the suit incurred
- Award of any other relief the Court deems appropriate.