Sometimes, getting disability benefits from an employer’s plan under the Employee Retirement Income Security Act (ERISA) can feel like a battle. But in a recent case, the Fourth Circuit United States Court of Appeals reminded us that it should not be.
The court explained that ERISA does not envision that the claim process under ERISA mirror an adversarial proceeding in which the claimant bears almost all of the responsibility for compiling the record and the claims administrator bears little or no responsibility to seek clarification when the evidence suggests the possibility of a legitimate claim. The court found that ERISA plan administrators have fiduciary duties. Specifically, the court explained, ERISA charges plan administrators to act as fiduciaries for plan beneficiaries for purposes of providing benefits to participants and their beneficiaries and for defraying reasonable expenses of administering the plan. So, not only does the plan administrator have a duty to prevent fraudulent claims, but it also has an affirmative duty to provide benefits.
The most interesting aspect of the Fourth Circuit’s decision for others litigating similar claims is the court’s explanation of the non-adversarial duties of ERISA plan claims administrators generally. The court stated that an ERISA claims administrator cannot be willfully blind to medical information that may confirm a beneficiary’s theory of disability where there is no evidence in the record to refute that theory. Also, an ERISA claims administrator must notify a claimant of specific information material to the success of the claim that the administrator is aware is missing.
In reversing the trial court’s grant of summary judgment for the self-insured employer and claims administrator, the Fourth Circuit held that the claims administrator not only failed to satisfy ERISA’s full and fair review requirements, but breached its fiduciary duty to the participant in the short-term disability plan.
In this case, a woman worked as an online customer service representative at a bank. Her doctor discovered she had an enlarged thyroid and a large mass extending into her chest causing her to suffer chest pain and tracheal compression. While she was awaiting surgery, her husband died unexpectedly. This triggered a recurrence of depression and posttraumatic stress disorder (PTSD) related to the death of her mother and her children in a house fire a few years earlier. Her primary care physician doubled her dosage of antidepressants and referred her to a psychologist for additional treatment. She then underwent two surgeries related to the thyroid and chest mass.
The woman was unable to work and submitted a claim for short-term disability benefits under a plan offered by her employer. In addition to documentation about her thyroid and chest mass, she provided documentation from her primary care physician regarding her emotional trauma from the death of her husband and contact information for her psychologist. The independent peer reviewer of the psychological disability claim contacted the woman’s primary care provider regarding the woman’s mental health, but did not contact the woman’s psychologist. The reviewer concluded that while there was evidence in the record to suggest that the loss of her husband could have triggered PTSD caused by the death of her mother and children, in the absence of psychiatric or psychological records or a telephone conference with her psychologist, an opinion at as to whether her psychiatric status limited her functional capacity could not be provided. In part, on the basis of the reviewer’s conclusions, the employer rendered a final decision upholding the denial of short term disability benefits.
The court reasoned that the plan administrator had been put on notice that the plan participant was seeking treatment for psychological ailments and the plan participant provided contact information for her psychologist. Therefore, the plan administrator had a duty to contact the woman’s psychologist regarding her mental health to determine whether her psychiatric status limited her functional capacity. The independent peer reviewer’s failure to call the woman’s psychologist constituted a breach of the claims administrator’s fiduciary duty to the plan participant.
See: <c>Harrison v. Wells Fargo Bank, N.A., 2014 WL 6845461 (4th Cir.(Va.), December 5, 2014)</c> (not designated for publication).
By Sarah Kelman, JD, and the experts and editors at Medical Law Perspectives.
For more details, see the Scalpel Weekly News, December 15, 2014.
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See also Medical Law Perspectives, December 2014 Report: Beyond the Holiday Blues: When Depression Leads to Liability
See also Medical Law Perspectives, June 2013 Report: Independent Medical Evaluations: Legal Risks and Responsibilities