In the back and forth of the disability claims process, decisions on whether someone is disabled can change. Claims administrators are “entitled to seek and consider new information and, in appropriate cases, to change its mind.” In fact, a record showing that the claims administrator changed its decision over time can help disprove allegations that a “conflict of interest” played a role in the claims decision.

The recent case of Geiger v. Aetna Life Ins. Co., __ F.3d __ (7th Cir. January 6, 2017)  highlights the point, and explains four ways to inoculate claims from allegations that a conflict of interest affected the claims decision.

FACTS: Geiger had back and ankle problems and sought ERISA-governed disability benefits in 2009. The plan vested discretion with Aetna. Aetna concluded Geiger could not perform her “own occupation” as an account executive. After 24 months Aetna assessed whether Geiger could perform “any occupation.” Aetna initially concluded Geiger also could not perform “any occupation”.

But then new surveillance, medical reviews and a transferable skills analysis resulted in Aetna changing its decision and determining Geiger could perform a sedentary job. After benefits were discontinued, Geiger sued claiming Aetna’s conflict of interest (because it funded the benefit and determined eligibility) affected the decision.

DISTRICT COURT: GRANTED Aetna’s Motion for Summary Judgment, concluding Aetna properly exercised discretion.

SEVENTH CIRCUIT:  AFFIRMS

  1. “[N]ew surveillance evidence supported [independent peer review report] and refuted [Geiger’s physician report]. …Aetna was ‘entitled to seek and consider new information and, in appropriate cases, to change its mind.’” Op. at 4.
  1. “Aetna minimized any conflict of interest by implementing multiple safeguards. First, Aetna obtained numerous independent physician peer reviews. Second, Aetna and the independent physicians reached out to Geiger’s own physicians and addressed their concerns. Third, Aetna sent the surveillance video to Geiger’s physicians to ensure the video was assessed objectively. Finally, Aetna previously reversed its own decision and reinstated her benefits.” Op. at 5. (Bold print added).

Have a great week…

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Photo of Mike Reilly Mike Reilly

Mike Reilly is a nationally recognized labor, employment and employee benefits attorney, named one of the “Top 100 Most Powerful Employment Attorneys in the Nation” for the past five consecutive years by Human Resource Executive®. He has decades of experience providing strategic employment…

Mike Reilly is a nationally recognized labor, employment and employee benefits attorney, named one of the “Top 100 Most Powerful Employment Attorneys in the Nation” for the past five consecutive years by Human Resource Executive®. He has decades of experience providing strategic employment advice, and has represented clients in more than 75 jury trials, arbitrations, bench trials and claims before the EEOC and Washington State Human Rights Commission.

Small and large employers retain Mike for his strategic advice and decades of experience in employment issues and litigation, business decisions and litigation avoidance. Mike provides advice in claims involving discrimination, retaliation, wrongful discharge, disability accommodation, ERISA and non-ERISA employee benefit claims, and wage/hour claims. He served as lead counsel in an employee raiding/trade secret case as reported in the Wall Street Journal, and defends employers in class action claims.

Mike’s remarks on employment issues have been quoted in NewsweekCorporate Legal TimesSeattle TimesEmployee Relations Law JournalPuget Sound Business JournalCFO.com, and other professional journals and management publications. Chambers USA’s Guide to America’s Leading Lawyers for Businessrates Mike in the top ranking (band one) for his work in labor and employment law, and has described him as “one of Seattle’s top-rate attorneys” who is “truly phenomenal [with] superb legal instincts” and “an amazingly assertive litigator.” His clients include Nordstrom, Seattle Seahawks, Home Depot, KeyBank, Starbucks, Fred Hutchinson Cancer Research Center, Red Robin and Seattle Chamber of Commerce, among others.