Will courts enforce Plan language even when a 24 month limitation is “not what a reasonable employee would expect” to see in a disability plan?  YES.

Here’s an interesting, recent case showing the power of Plan language. The opinion also supports the effect of “choice of law” provisions in Plans.

Bland v. Metropolitan Life Insurance Company,[PDF] 2013 WL 56117 (M.D.Ga. January 3, 2013). (Kudos also go to Elizabeth Bondurant on some fine legal work.)

FACTS: Bland hurt her back and had lumbar radiculopathy.  She made an ERISA disability claim under her a plan drafted by the employer, Novartis, and administered by Met Life.  This plan had a 24 month limitation for “neuromuscular-musculoskeletal or soft tissue disorder.”  The Plan language did not define “neuro-musculoskeletal” and dropped typical language in this type of provision that required “objective evidence.”   An independent medical review concluded Bland was totally disabled from her back injury.  Met Life determined the 24 month “neuro-musculoskeletal” limitation applied and denied the claim. The plan called for de novo review.

DISTRICT COURT HOLDING:  Met Life Was Not De Novo Wrong in Terminating Benefits under the 24 Month Neuro-musculoskeletal Limitation.

1. “A claimant suing under ERISA has the burden of proving entitlement to plan benefits.”  Op. at 3.
2. “[T]he insurer generally must prove the exclusion prevents coverage.”  Op. at 3.
3. The Court declines to determine which party has the burden of proving that the Plaintiff is not disabled because of limiting condition.  Op. at 4.
4. Choice of Law. “[B]ecause the Plan has a choice of law provision, if there were applicable New Jersey law that did not conflict with ERISA, then the application of the law to this case would be appropriate.”  Op. at 4
5. The neuro-musculoskeletal 24 month limitation language unique to this case is drafted so broadly that it applies to any neck or back injury and applies even to a paraplegic.  The problem with this limitation is not its clarity, but its breadth.  But no known legal precedent “bars Novartis from drafting its plan any way it chooses, so long as it complies with ERISA requirements. Op. at 5.
6. “The fact that the Plan is a contract of adhesion or that Novartis employees would be surprised to learn that their disability coverage is not what a reasonable employee would think, is of no consequence.  Novartis is the master of its plan and no ERISA provision bars it from excluding coverage for neuro-musculoskeletal disorders.” Op. at 5.