Insurance Companies Err in Long-Term Disability Determination.


The U.S. District Court for the Eastern District of Michigan grants the plaintiff's motion for summary judgment regarding termination of her long-term disability (LTD) benefits due to the defendants' failure to properly consider medical evidence.

The plaintiff is a flight attendant for a commercial airline and is covered under its LTD policies, which are governed by the Employee Retirement Income Security Act of 1974 (ERISA). The defendants include the insurance companies that issued the policies and act as the claims administrators for the policies.

The policies provide for benefits upon a finding of disability. After an employee receives benefits for 24 months, the policies state that an employee is totally disabled only if he or she is unable to perform all the essential duties of any occupation for which he or she is or may reasonably become qualified based on education, training or experience.

The plaintiff suffered from lupus and congestive heart failure. As a result of the conditions of these diseases, the plaintiff stopped working as a flight attendant in December 1999 and filed a claim for LTD benefits under the policies. The claims were initially approved, and the defendants would periodically try to verify the extent of the plaintiff's disability through requests for medical records from treating physicians as well as forms and questionnaires from the plaintiff and her physicians. The defendants also conducted an independent investigation in which it determined that the plaintiff was capable of returning to work in a sedentary occupation. Due to the independent investigation, the defendant terminated the plaintiff's LTD benefits. The plaintiff appealed, and the defendants reinstated her benefits.

Subsequently, the defendants reassessed the plaintiffs disability status and terminated her benefits again. The plaintiff appealed that decision and sent additional records from her treating physicians. The appeal was denied, and this suit followed. Because the policies grant the discretionary authority to grant or deny benefits to the defendants, any denial must be reviewed by the court under the arbitrary and capricious standard.

Tie plaintiff argues that the medical records and evidence do not support the defendants' position that she is not disabled and therefore not entitled to LTD benefits. In contrast, the defendants argue that the...

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