Can the ERISA claims administrator “cure” inadequacies, made during its initial claim denial, during the appeal process? Yes.

Did a claims administrator’s recommendation, that a claimant receive a job-accommodation, constitute sufficient proof of disability?  No.

This new case highlights these issues: Canter v. AT&T Umbrella Benefit Plan No. 3, 33 F. 4th 949 (7th Cir. May 11, 2022)(Errors made during the initial claim denial can be “cured” during the administrative appeal; “[D]isability-benefit and job-accommodation determinations may resemble each other, but they are not identical, and so different conclusions are to be expected from time to time.”)

FACTS: Canter installed overhead wires (as high as 28’ off the ground) for AT&T and sought ERISA-governed short-term disability after experiencing migraines, lightheadedness and dizziness. After paying benefits for a few months, Sedgwick, the ERISA claims administrator, denied benefits because Canter had normal test results and a peer medical review concluded Canter’s symptoms had improved. Canter’s internal appeal was denied and he brought suit.  The district court affirmed the claim denial, and Canter appealed.

ISSUES:  

  1. Whether Sedgwick can “cure” inadequacies in its initial claim denial during the appeal process? Yes.
  2. Whether Sedgwick failed to properly investigate the claim because peer reviewers made only two (2) attempts to contact treating physicians? No.
  3. Whether Sedgwick’s recommendation for a job-accommodation is sufficient proof of disability?  No.

Seventh Circuit Court of Appeals Held:  Sedgwick’s Claim Denial Affirmed.

  1. The plan called for “objective Medical Evidence” consisting of “results from diagnostic tools and examinations….” The court noted that “the fact that pain or dizziness…evades clinical detection or explanation is not by itself a reason to discount or disregard it.”  Op. at 3, 10.
  2. “But just as self-reported evidence is not irrelevant, neither is it a trump card. The record as a whole is what matters.” Op. at 10.
  3. Canter argued that Sedgwick’s initial determination did not properly consider his job duties, like his job duty to be able to climb. The court agreed that the initial claim denial failed to address whether Canter was disabled from climbing—a key job duty.  But Sedgwick’s omission of this job duty “was cured during Sedgwick’s internal appeal [when the peer reviewers] explicitly touched on ‘climbing’….”  Op. at 11.
  4. Canter claimed the investigation was inadequate because Sedgwick’s peer reviewers unsuccessfully made only one or two attempts to reach only one of several treating physicians. The court concluded errors in this regard were “harmless.”  Op. at 13.
  5. The district court correctly disregarded Sedgwick’s earlier recommendation that Canter receive a job accommodation. Job accommodation evidence, even if considered, would not have undermined Sedgwick’s disability decision. “[D]isability-benefit and job-accommodation determinations may resemble each other, but they are not identical, and so different conclusions are to be expected from time to time.” Op. at 14.