You know that the ERISA regulations set out claims procedural requirements.

Whether the claims administrator complied with the claims procedure requirements is often a key battleground when a court is determining if the long term disability claim was improperly denied.

This new case highlights the arguments Plaintiffs’ may make in challenging claims handling, and how the Sixth Circuit rejected those arguments.

Avery v. Sedgwick Claims Management Services, Inc. and FCA US LLC Long Term Disability Benefit Plan, 2023 WL 4703865 (6th Circuit July 24, 2023)(Applying abuse of discretion standard of review, court affirmed denial of ERISA-governed long term disability benefit claim. Claim administrator substantially complied with ERISA claims procedure requirements: “If Avery wished to include Social Security documentation in the administrative record, she should have requested said documents from the SSA directly and supplemented the record when given the opportunity to do so.”) 

FACTS: Avery sought and was granted ERISA-governed long term disability benefits following a leg injury. Sedgwick discontinued benefits after an independent medical exam, and Avery appealed. The appeal was denied and Avery brought suit in federal court.

DISTRICT COURT HELD:  District Court granted Sedgwick’s motion for judgment.

SIXTH CIRCUIT HELD:  Affirmed denial of Long Term Disability Benefits—substantial evidence supported the denial of benefits under the arbitrary capricious standard of review.

  1. “In deciding whether a plan has satisfied the requirements of [the ERISA Procedural Requirements] we employ a ‘substantial compliance’ test. Op. at 8.
  1. “‘If the communications between the administrator and the participant as a whole fulfill the twin purposes [of notice of specific reasons for claim denial and an opportunity for review], the decision will be upheld even where the particular communication does not meet those requirements.’”  Op. at 8-9.
  1. Argument that Sedgwick letter failed to inform claimant of reasons for claim denial and appeal right… rejected. “Sedgwick’s collective communications…substantially complied with ERISA’s procedural requirements. Although Sedgwick’s July 21, 2014 letter undoubtedly fell short of meeting [ERISA procedural] requirements…its August 20, 2014 letter corrected any deficiencies.”  Op. at 10-11.
  1. Argument that Sedgwick failed to give claimant an opportunity to submit comments and documents… rejected.  “Before issuing its initial benefits denial, Sedgwick …ask[ed] whether she intended to provide any additional information, to which she responded ‘no’.” Claimant also did submit additional comment in her appeal letters. Op. at 12.
  1. Argument that Sedgwick failed to provide “reasonable access” to administrative file… rejected. “While claimants are entitled to reasonable access to records relevant to their claim, this access is provided ‘upon request.’ …And there is no indication that [claimant] ever requested access to records….”  Op. at 6
  1. Argument that Sedgwick did not retain appropriate peer reviews… rejected. “Sedgwick relied on [Independent Record Reviews] by two board certified neurologists…. Furthermore, the requirement that a group health plan ‘consult with a health care professional who has appropriate training and experience in the field of medicine involved in the medical judgment’ applies only ‘in deciding an appeal of any adverse benefit determination.’” The knowledge and experience of a medical reviewer not consulted in deciding an appeal is “procedurally irrelevant.” Op. at 13.
  1. Argument that surveillance documentation was omitted from the administrative record… rejected.  Avery contended Sedgwick failed to include in the administrative record  the “actual surveillance” of claimant. An investigator apparently sent an email of observations of claimant driving a car and running a business.  There was no evidence that other documentation of the surveillance was made, so it was “pure speculation”  by Avery that documents had been kept out of the record. Op. at 13-14.
  1. Argument that records from Social Security were omitted from administrative record… rejected. Avery argued that documents related to her Social Security disability had not been included in the administrative record. “If Avery wished to include Social Security documentation in the administrative record, she should have requested said documents from the SSA directly and supplemented the record when given the opportunity to do so.”  Op. at 14.