New York Federal Court Orders Aetna to Pay Long Term Disability Benefits

In Dunda v. Aetna, Aetna terminated plaintiff’s long term disability benefits even though there was no medical evidence that her disabling conditions had improved since it granted her long term disability benefits. The plaintiff, a former general store manager for the Wawa corporation, suffered from a number of conditions which caused her debilitating low back pain: lumbar herniated nucleus pulposus, a herniated disk and sciatica. She was initially granted short term disability benefits when she could no longer work in her own occupation. Long term disability benefits were then awarded when medical evidence supported her claim that she was disabled from performing any reasonable occupation.

After two years on disability under the “any reasonable occupation” standard, Aetna terminated her benefits on the ground that there was no objective evidence of her disabling medical condition. Aetna did not consider her SSDI award nor did it conduct an independent medical exam (IME). On these facts, the New York court found Aetna’s termination of benefits was arbitrary and capricious.

Reviewing Court is Not Bound by Stipulation Concerning Standard of Review

The court first dealt with the parties earlier stipulation that the proper standard of review was for an abuse of discretion. The plaintiff back-pedaled and argued she should not be bound by the stipulation, whereas Aetna wanted the court to enforce it. The court ruled: “This Court is effectively sitting as an appellate court, and therefore is ‘not bound by stipulations as to questions of law.’” It determined that the appropriate standard of review was whether or not Aetna acted in an arbitrary and capricious way when it terminated plaintiff’s benefits.

Aetna’s Actions Were Arbitrary and Capricious

The court found Aetna’s termination of long term disability benefits was arbitrary and capricious for several reasons:

Although remand would generally be the remedy in a case like this one, the court held that, “no new evidence could produce a reasonable conclusion permitting a non-arbitrary denial of the claim. Remand would, in this case, be a useless formality.” The court ordered Aetna to reinstate benefits effective retroactively to the date benefits were terminated.

This case was not handled by our office, but we believe it is instructive for those whose long term disability benefits are terminated even though there has been no change in their medical condition. If you are having a similar problem, or have any issue concerning your disability benefits, contact one of our experienced disability attorneys for a free consultation.

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