You already know that opinions by independent medical reviewers play a big role in the decision to grant or deny benefits.

The reasons why the independent medical reviewer came to the conclusions made are as important as the conclusion itself.

Don’t rely on the mere conclusions by the independent reviewer and inform your independent medical reviewer that the reasons for the conclusions are as important as the conclusions themselves.

That is because…your denial letter is only as good as the analysis/reasons stated in the IME report.

A case issued last week highlights the point: Westfall v. Liberty Life Assurance Company, __ F. Supp. 3d __ (N.D. Ohio March 1, 2018)(“Because Defendant’s denial letter relies on analysis [the independent medical reviewer] provided as to why his opinions controlled over the opinions of [two treating physicians], the Court will treat [the independent reviewer’s] analysis as Defendant’s purported reasons for relying on the review, rather than the opinions of Plaintiff’s treating physicians.”)

FACTS. In April 2015 Westfall’s son died at her place of work (Wal-Mart Distribution Center). Westfall then sought ERISA-governed long term disability benefits, stating she could not “bring herself to go back to that [work] site[.]” Liberty Life extended disability benefits from November 2, 2015-January 14, 2016. The plan vested discretion with Liberty Life. Liberty Life later discontinued benefits based upon an independent medical review that concluded that, while Westfall suffered from major depression, her records did not document “frequent and severe symptoms or corroborating mental status findings to support a finding of ongoing impairment.”  This lawsuit followed.

ISSUE:  Whether Liberty Life abused its discretion in discontinuing benefits?


  1. “[T[he Court may not overturn a plan administrator’s decision ‘if there is a reasonable explanation for the administrator’s decision denying benefits.””  Op. at 11.
  2. “Reliance on other physicians is reasonable so long as the administrator does not totally ignore the treating physician’s opinions.” Op. at 12.
  3. “Because Defendant’s denial letter relies on analysis [the independent medical reviewer] provided as to why his opinions controlled over the opinions of [two treating physicians], the Court will treat [the independent reviewer’s] analysis as Defendant’s purported reasons for relying on the review, rather than the opinions of Plaintiff’s treating physicians.”  Op. at 12.
  4. The independent medical review relied on for the denial failed to provide “sufficient reasons to show that Defendant’s analysis should have been preferred over the analyses of [two treating physicians].” Op. at 12.
  5. “‘[C]herry-picking symptoms…and then reverse engineering a diagnosis…is not the hallmark of a reasoned explanation.’”  Op. at 13.
  6. The independent medical reviewer ignored one treating physician’s express finding of “emotional lability”—which was not an accidental omission.  Op. at 13.
  7.  “Although evidence exists to support the conclusion that employment factors (i.e. working in the same place her son died) are central to Plaintiff’s impairment, the reasoning process Defendant used to deny Plaintiff benefits was flawed, as it ignored the emotional lability finding.” Op. at 14.


What happens when a claimant asserts totally disability… caused by subjective physical pain and mental illness?

For example, sometimes claimants allege total disability from the combined conditions of subjective pain complaints (with provable back abnormalities) and depression caused by the pain.

This is when you want to take a closer look at the impact of the 24 month Mental/Nervous limitation in the policy.

Here’s the case of Krash v. Reliance Standard Life Insurance Group, __ Fed. Appx. __ (3rd Cir. February 12, 2018) (“to remain eligible for benefits past the 24 month mark, ‘it was [Krash’s] burden to prove she was totally disabled from any occupation solely due to a physical condition.’”) And…kudos to some nice work by my friend Joshua Bachrach on this nice win…

FACTS: Krash sought ERISA-governed disability benefits due to subjective back pain. She also expressed that “tremors” were her primary complaint. The policy (with Reliance Standard) limited disability benefits to 24 months for disabilities “caused or contributed to by mental or nervous disorders.”

An Independent Medical Exam (IME) confirmed Krash had (1) degenerative disc disease with no atrophy “which indicates normal usage”; (2) only subjective pain complaints; and (3) body tremors that were “psychogenic in nature.” Reliance Standard discontinued benefits because Krash “suffered a mental or nervous condition that contributed to her alleged disability and…was not, in the absence of a mental or nervous condition, physically disabled.” Krash sued, and the abuse of discretion standard was applied.

ISSUE: Whether Krash established she was totally disabled (alleging both subjective complaints and mental conditions).


  1. Krash claimed her physical condition caused her depression, anxiety and psychogenic tremors. But the court noted: “to remain eligible for benefits past the 24 month mark, ‘it was [Krash’s] burden to prove she was totally disabled from any occupation solely due to a physical condition.’” Op. at 6-7 (emph. added).
  2. “‘[C]aused by or contributed to by’ in a mental disorders limitation clause [means] that benefits may be terminated when physical disability alone is insufficient to render a claimant totally disabled.”  Op. at 7 (emph added).
  3. “‘[T]he fact that the Plaintiff has been diagnosed with a condition does not equate to proof she is totally disabled from any occupation as a result of the condition….Under the policy Krash still had to prove that her condition prevented her from ‘perform[ing] the material duties of any occupation.’”  Op. at 7.
  4.  The Court determined the record did not support total disability, and she was able to perform sedentary work.

KEY TAKE AWAY: The Third Circuit is aligned with the Fifth, Sixth and Ninth Circuits in interpreting the phrase “caused or contributed to by” in a mental disorders limitation clause to mean that benefits may be terminated when physical disability alone is insufficient to render a claimant totally disabled.

Yesterday the United States Supreme Court allowed a Seventh Circuit decision to remain in effect that determined that a forum choice provision in an ERISA plan is enforceable, despite ERISA’s statement that suits “may be brought” in courts tied to the plan or plan beneficiary.

Here’s the case of George W. Mathias, Petitioner v. United States District Court for the Central District of Illinois, et al., 867 F. 3d 727 (7th Cir. 2016), pet. for review denied (January 16, 2017).

FACTS. Mathias worked for decades for Caterpillar in Pennsylvania and brought suit in the Eastern District of Pennsylvania when his ERISA-governed long term disability benefits were denied. The Caterpillar ERISA plan, however, required that suit be filed in the Central District of Illinois. Caterpillar sought transfer of the case to Illinois relying on this forum selection clause. When the Illinois judge denied Mathias’ motion to transfer the case back to Pennsylvania Mathias filed a writ of mandamus with the Seventh Circuit. The Seventh Circuit determined the forum selection clause in Caterpillar’s plan, that required all suits be filed before the Central District of Illinois, was valid and enforceable.

Mathias then petitioned the United States Supreme Court to review whether a contractual forum-selection clause that appears to override ERISA’s venue provision was valid and enforceable.

United States Supreme Court:  Allowed the Seventh Circuit decision to remain in effect when the petition for review was denied.

Rationale of the Seventh Circuit Decision (attached):

  1. Like the Sixth Circuit, the Seventh Circuit concluded the forum selection provision is enforceable.  Op. at 11.
  2. A “contractual choice of forum is now considered controlling ‘except in unusual cases.’ Op. at 12.
  3. Nothing in the text of [ERISA section 1132(e)(2)] precludes the parties from contractually channeling litigation to a particular federal district. Nor is contractual forum selection incompatible with ERISA’s policy goals more generally.” Op. at 12-13.

What this means for ERISA plans

In the Sixth and Seventh Circuit, ERISA plan venue provisions will likely be enforced if challenged in a litigated benefits dispute. Both decisions, however, involved dissenting opinions. Expect that other appellate courts could go the other way, and the Department of Labor historically has challenged the validity of forum selection clauses.

It’s that time of year again… when you may see ERISA plans amending policies or plans— during the time employees are receiving benefits. 

Employers have the right to amend long term disability plans at any time, and to apply the amended version even to employees receiving benefits under the original plan.

But which policy applies during a lawsuit? The policy in effect when the ERISA cause of action accrued.

And “accrual” can occur when the claims administrator fails to render an appeal decision by the deadline prescribed in the ERISA regulations.  

Here’s the case of Vaccaro v. Liberty Life Assurance Company of Boston, 2017 WL 5564910 (N.D. Cal. November 20, 2017)(“The ERISA cause of action accrued upon the expiration of Liberty’s June 8, 2016 deadline to issue an appeal decision.”)

FACTS:  Vaccaro sought ERISA governed long term disability benefits. Vacarro became disabled, with her last day of work as April 29, 2015. She submitted a claim July 2, 2015, which Liberty initially denied.  After Liberty failed to render an appeal decision by June 8, 2016,  Vaccarro sued Liberty on June 10, 2016. Liberty granted her appeal (on some but not all issues) on June 14, 2016. In December 2016, Liberty and the employer amended the 2015 policy, effective January 1, 2017.

ISSUE: Which Policy (the 2015 or the 2017 policy) governs?


  1. “[A]n employer has the right to amend its long term disability plan at any time and to apply the amended version even to employees receiving benefits under the original plan.”  Op. at 10.
  2. “The governing policy is the policy in effect when the ERISA cause of action accrued.”  Op. at 10.  
  3. In a situation in which one version of the disability policy is in effect when the claimant becomes disabled and begins receiving benefits, but an amended version of the policy is in effect when those benefits are terminated, the court would ordinarily look at the revised plan.  Op. at 10.
  4. “The ERISA cause of action accrued upon the expiration of Liberty’s June 8, 2016 deadline to issue an appeal decision.” Op. at 11.
  5. “[T]he Supreme Court has stated expressly that when a plan fails to resolve an internal appeal within the time provided under ERISA regulations, ‘the participant shall be deemed to have exhausted the administrative remedies’ and ‘is entitled to proceed immediately to judicial review.’” Op. at 11.
  6. “Policy amendments made after accrual of ERISA cause of action do not apply.” Op. at 14.


You already know that in ERISA life, health and disability claim determinations, “‘[i]n most cases…the district court should only look at the evidence that was before the plan administrator at the time of the determination.’”  (There are many exceptions.)

Sometimes during the later lawsuit, the claimant may seek to supplement the administrative record. For example, you might expect motions to supplement the record when the Social Security Administration issues a disability determination after the ERISA claim administrator initially denies the claim.

So, how do you oppose motions to supplement the record when under de novo review?

And…are there situations in which you might agree to de novo review (rather than discretionary review)?  YES.

According to this new case: “an administrator’s obligation to ask for extrinsic evidence under an abuse of discretion standard of review does not necessarily exist under a de novo standard of review, and the court declines to apply such a requirement on de novo review….” (Emph. added.)

Here’s the case of Reetz v. Hartford Life and Accident Ins. Co., 2017 WL 5176705, ___F.Supp.2d ___ (W.D. WA November 8, 2017)(Court denied Plaintiff’s motion to supplement record with Social Security Administration disability determination. “[A]n administrator’s obligation to ask for extrinsic evidence under an abuse of discretion standard of review does not necessarily exist under a de novo standard of review, and the court declines to apply such a requirement on de novo review….”) (Emph. added). (Kudos to my partner Stephania Denton on a very nice win.)

FACTS: Reetz sought ERISA governed disability benefits; Hartford advised Reetz she must apply to the Social Security Administration (SSA) for disability benefits. Reetz’s SSA application was initially denied, and she appealed. While the SSDI appeal was pending, Hartford denied the ERISA disability claim. Two (2) months later SSA granted Reetz’s SSDI disability claim; Hartford later denied Reetz’s appeal of the claim denial.

ISSUE: Whether the Court should allow supplementation of the administrative record with the Social Security Administration Disability determination?

DISTRICT COURT HELD:  Motion to Supplement Record DENIED.

  • Under Ninth Circuit precedent “‘[i]n most cases…the district court should only look at the evidence that was before the plan administrator at the time of the determination.’”  Op. at 4.
  • “Evidence outside of the administrative record is considered ‘only when circumstances clearly establish that additional evidence is necessary to conduct an adequate de novo review of the benefit decision.’”  Op. at 4-5.
  • Those “certain limited circumstances” when the record can be supplemented include:
    •  claims involving complex medical questions,
    •  credibility of experts,
    •  claims involving little or no administrative record,
    •  the need to interpret plan terms,
    •  instances when payor and administrator are the same entity and the court is concerned about impartiality,
    •  when the claimant could not produce the evidence during the administrative process.  Op. at 5.
  • The Court determined that Reetz “could have presented the SSA decision and the hearing evidence during her appeal of the Hartford denial.” Op. at 5.
  •  Reetz argued that Hartford “should have asked for the information.” But the Court noted “an administrator’s obligation to ask for extrinsic evidence under an abuse of discretion standard of review does not necessarily exist under a de novo standard of review, and the court declines to apply such a requirement on de novo review….”  Op. at 7-8.


You already know that since December 2016 the United States Department of Labor (DOL) has been reworking regulations governing disability plan administration.

New ERISA claims requirements were issued, which were to take effect and apply to disability claims filed on or after January 1, 2018. Some of the changes included:

(1) New Conflict of interest criteria: to assure impartiality of claims adjudicators, and vendors, the regulations restricted bonuses and financial incentives could not be based on the outcome of a claim;

(2) Denial notice requirements increased: the regulations required benefit denial notices to detail the reasons and criteria relied upon when denying benefits, including detailed explanation of the basis for disagreeing with the claimant’s treating physician or a Social Security Administration determination;

(3) Enhanced “full and fair” review, by allowing opportunity to respond to new information. As soon as a physician review report or transferable skills assessment was available, the claimant was to get an opportunity to review and comment before an appeal-level denial was issued;

(4) Non-English translated notices: the regulations required the plan to provide, upon request, translation services for claimants who speak languages other than English; and

(5) Notice regarding contractual limitations period: the regulations required that the benefit denial notification include a description of the contractual limitations period and the expiration date.

These new regulations were going to impose significant costs. ERISA plans and insurers contended these new regulations created extra burdens which would, in turn, increase LTD premiums 5%-8%. According to the DOL, “[a]fter the Department published the Final Rule, certain stakeholders asserted in writing that the Final Rule will drive up disability benefit plan costs, cause an increase in litigation, and thus impair workers’ access to disability insurance protections.

BREAKING NEWS TODAY: Someone at DOL is listening. The DOL acknowledged this week that it lacked sufficient information to assess the costs of these new requirements. The DOL now seeks input regarding the regulatory impact analysis of the Final Rule. If additional reliable data and information is submitted, the Department will be able to consider whether it supports regulatory alternatives other than those adopted in the Final Rule.

TODAY the Department of Labor published a proposed rule to delay for ninety (90) days – through April 1, 2018 – the applicability of the Final Rule amending the claims procedure requirements applicable to ERISA-covered employee benefit plans that provide disability benefits.” (Emph. added)

Here is today’s published proposed rule.


Comments on the proposal to extend the applicability date (to April 1, 2018) should be submitted by OCTOBER 27, 2017.

By DECEMBER 11, 2017, “comments providing data and otherwise germane to the examination of the merits of rescinding, modifying, or retaining the rule” should be provided. (Emphasis added).

Here is the information the DOL wants to consider:

Data it could use to assess:

(1) the number of disability claims that are filed and denial rates for such claims, including rates separately for claimants who were previously approved under the Social Security Disability Insurance Program (SSDI) and statistics on reasons for denial;

(2) how often plans rely on new or additional evidence or rationales during the claims review process and the volume of the material that comprise such additional evidence or rationales;

(3) the price elasticity of demand for disability insurance coverage;

(4) pricing or premiums for group and individual level policies and factors that affect pricing;

(5) loss ratios and the breakdown of expenses (claims, sales, claims processing, etc.);

(6) aggregate, average, and median benefits paid and ages of claimants;

(7) the projected litigation costs associated with the new procedural requirements for disability claims provided in the Final Rule;

(8) the number of new claims that will be granted that, but for the provisions in the Final Rule, would have been denied, and the value of those benefits;

(9) the systems and technology that plans and insurers use to process disability claims and cost estimates updating such systems to comply with the Final Rule;

(10) statistics on steps, timing of steps, and disposition of claims from initial filing to final disposition, including claims filed but never perfected or decided, up to and including claims denied though appeal and litigated; and

(11) information regarding the costs for non-English services and the estimated population of claimants that might be expected to use such services.

You know that most ERISA plans, and most supporting insurance policies, have provisions that allow for an offset of Social Security disability benefits.

Can the court invalidate these offset provisions because of “unconscionable” conduct? It depends.

Here’s the case of Hart v. Unum Life Insurance Co. of America Catholic Healthcare West LTD Disability Plan, 2017 WL 4418680 (October 4, 2017)(Court denied Plaintiff’s request to invalidate offset provision).

FACTS: The court previously determined Plaintiff Hart was entitled to ERISA-governed disability benefits. Plaintiff then asked the court to invalidate the Social Security benefit offset provision in the ERISA plan, claiming that Unum’s (wrongful) denial of benefits was unconscionable and forced Hart to “lose her house and her car,” and forced her to prematurely apply for Social Security retirement benefits.

ISSUE: Whether the right to offset Social Security benefit payments should be denied because Unum wrongfully denied disability benefits?


  1. Plaintiff “offers no analysis to show that the law in our circuit would permit application of unconscionability principles…to deny effect to an ERISA provision.” Op. at 3.
  2. “Allowing Unum the offset it seeks would still compensate Hart for Unum’s wrongful termination of benefits through the age of 65 but not for the reduction of her social security retirement benefits thereafter.” Op. at 4.
  3. The Court awarded prejudgment interest, which is an “element of compensation, not a penalty.” Op. at 4. “The balance of the equities herein warrants an award of prejudgment interest [at 10%].” Op. at 6.


-There is some authority allowing a court to exercise “equitable power” to deny offsets, but those cases are distinguishable. See, e.g., Godfrey v. BellSouth Telecommunications, Inc., 89 F.3d 755, 757-9 (11th Cir. 1996)(Offset provision invalid because employer denied disability benefits and then threatened to fire employee unless she returned to work).

You already know that most ERISA plans require an assessment, say after 24 months, whether the claimant can perform “any occupation.”

This review usually involves a Vocational Assessment examining what “other occupations” and earnings are available given the claimant’s education, skills and experience.

HOT TIP: Courts are placing higher burdens on vocational experts when establishing what “other occupations” the claimant can assume.

For example, using median wage data may not be sufficient in certain circumstances.

Here’s the case of Flaaen v. Principal Life Insurance Co., 2017 WL 4286358 (W.D. WA, September 27, 2017)(attached)(“[T]he term ‘gainful occupation’ requires an evaluation of the insured’s actual employment prospects and wages based on his current experience and qualifications.”)

FACTS: Flaaen, a truck driver, received ERISA-governed disability benefits for years. While disabled, Flaaen earned a university bachelor’s degree in “Art/Media Culture”. After paying disability benefits for seven years, Principal Life sought to determine whether Flaaen could perform the “substantial and material duties of any Gainful Occupation” at an amount of $47,124. A vocational assessment determined he could perform jobs in the public relations and graphic design field, earning in excess of $50,000. Consequently, Principal discontinued benefits. Flaaen sued after an unsuccessful appeal. The Court applied de novo review.

ISSUE: Whether the Vocational Assessment supported the conclusion that Flaaen could perform “any Gainful Occupation”?

DISTRICT COURT HELD: NO—Flaaen was entitled to reinstatement of benefits.

  1. The Court rejected Principal’s argument that “an occupation is gainful even if the claimant would not be able to earn median/mean wage upon starting.” Op. at 12.
  2. “[C]hoosing the median wage of every professional is an arbitrary heuristic because it in no way relates to the experience or qualifications of the specific insured.” Op. at 14 (Emp. added).
  3. The record did not support the vocational assessment that Flaaen was qualified for either job suggested by the report. Principal also failed to show that the report was used by “experienced job experts”. Op. at 16.
  4. Principal’s vocational assessment failed to offer an opinion on Flaaen’s earning capacity. Op. at 18.
  5. Flaaen presented persuasive evidence he would earn only in the 25% percentile of certain occupations due to his inexperience. Principal’s mere reliance on Flaaen’s social media profiles and listed job titles was insufficient to support a conclusion that Flaaen had relevant job experience. Op. at 18-19.

KEY TAKE AWAY: This is another example of how the standard of review will affect the outcome. Come up with a plan to make your vocational assessments more defensible.

You know that failing to follow Department of Labor (DOL) claims regulations can result in the court using the de novo review standard, rather than the abuse of discretion standard in reviewing claim decisions.

But the court still may apply the abuse of discretion standard: if the plan can establish:

(1) it has procedures in full conformity with DOL regulations, and

(2) its failure to follow regulations was inadvertent and harmless.

So, what is the plan’s BURDEN OF PROOF to establish that it has procedures in conformity with DOL regulations?

And…does Plaintiff get to conduct discovery into claims procedures, and the way you handled the specific claim?

Here’s the recent case of Capretta v. Prudential Ins. Co., 2017 WL 4012058 (S.D.N.Y. August 28, 2017) “[A plan’s] burden to prove compliance with DOL regulations arises, if it ever arises, only after a plaintiff makes a reasonable showing that the defendant violated DOL rules.”)

FACTS: Capretta worked for four years following lung cancer treatment, and sought ERISA-governed long term disability benefits, which were denied. Plaintiff pursued discovery regarding Prudential’s claim procedures and its conduct in handling the specific claim.

ISSUE: Whether Prudential maintained “administrative processes designed to ensure that similarly-situated claimants are treated consistently and in accordance with plan documents?”


                 PLAN’S BURDEN OF PROOF.

  1. “District courts have disagreed whether the plan’s burden of proof requires it to demonstrate compliance with the regulation in general, or simply to show that any noncompliance was inadvertent and harmless.” Op. at
  2. “[A plan’s] burden to prove compliance with DOL regulations arises, if it ever arises, only after a plaintiff makes a reasonable showing that the defendant violated DOL rules.” Op. at  (Emph. added)
  3. It would be wrong to require “a plan to prove affirmatively compliance based on the mere allegation that it might have violated the regulations.” (Emph. in original.) Op. at


  1. “[T]o take discovery outside of the administrative record, a plaintiff challenging a claims decision must show that there is ‘a reasonable chance that the requested discovery will satisfy the good cause requirement.’” Op. at
  2. Plaintiff “must do more than merely claim that [discovery] is needed to determine whether she received a full and fair review.” Op. at
  3. “[E]ven where a plaintiff has sufficiently alleged good cause, discovery requests may not be overly broad or redundant of what is already in the administrative record.” Op. at
  4. Plaintiff fails to show that [Prudential] did not maintain reasonable claims procedures, or explain how [Prudential’s] application of the procedures may have been irregular or noncompliant in this case.” Op. at

Pre-existing condition exclusions can be difficult to apply, especially when addressing whether a new disabling condition relates back to a pre-existing condition.

But this new case shows how a new disabling condition resulting from a “bad surgery” may still be excluded under the pre-existing condition exclusion. Haddad v. SMG LTD and Hartford Life and Accident Ins. Company, 2017 WL 3620143 (E. D. Cal. August 22, 2017).

FACTS: Haddad had a pre-existing condition cervical disk that caused pain/tingling in his right arm. He had surgery to replace the disk. The surgery caused a new, non-pre-existing disabling condition to his left arm. Hartford contended the pre-existing condition exclusion applied to the new, post-surgery left arm condition because it was “caused or contributed to by” his pre-existing right-sided disk condition.

ISSUE: Whether a new disabling condition (caused by surgery to treat a pre-existing condition) is excluded as a pre-existing condition?

DISTRICT COURT HELD: YES. (Applying de novo standard of review.)

  1. The policy provided up to six weeks of disability benefits “for any Disability that results from, or is caused or contributed to by, a Pre-existing Condition….” Op. at 2.
  2. The [new] disabling left side pain, parenthesis and neck pain were “caused or contributed to” by Haddad’s pre-existing condition—the diseased C5-6 disk. Op. at 9.
  3. “This conclusion is consistent with district court cases that have addressed this issue on similar facts under similar policy language.” Op. at 9.
  4. “[The decisions from these other district courts] did not necessarily turn on the deferential standard applied. They relied on what a reasonable interpretation of ‘caused or contributed to’ is, as applied to the conditions that have worsened due to treatment or progression of a disease.” Op. at 11.
  5. The “caused or contributed to” language is broader than “related to or resulting from” language seen in some other pre-existing condition exclusions. Op. at 13-14.