An Ohio court reversed a Short Term Disability denial by Reed Group, a third party administrator of the Centurylink Disability Plan. Reed Group, a large administrator of employer sponsored group disability plans, denied the Short Term Disability claim of Stacie Groth, a Centurylink employee. Groth’s disability claim was covered under ERISA, the federal law that applies to employee benefit plans. Despite having some very stringent terms, the court found that Reed Group had acted unreasonably in denying Groth’s claim.
Ms. Groth filed a disability claim due to anxiety, depression, and a herniated lumbar disc in her back. Unlike many group ERISA disability plans, the Centurylink Disability Plan required employees to prove their disability using “objective medical documentation.” The Plan’s terms required proof of disability by “written documentation of observable, measurable and reproducible findings from examination and supporting laboratory or diagnostic tests, assessment or diagnostic formulation, such as, but not limited to x-ray reports, elevated blood pressure readings, lab test results, functionality assessments, psychological testing, etc.”
Despite providing medical records to support her claim, Reed Group hired not one, but two doctors, who claimed that Groth did not provide objective medical documentation supporting her disability. The court did a thorough review of the evidence, including the detailed reasons why Ms. Groth’s physicians concluded that she had serious medical conditions which caused her disability.
In the federal circuit in which Ohio sits, the Sixth Circuit, an ERISA plan decision is reviewed using what is called the de novo standard of review. This is a fresh decision by a court. De novo review is used unless the plan document states that the decision-making administrator has discretion to interpret plan terms and make decisions. That language was present in the Centurylink Plan. As a result, the court had to consider the claim using the arbitrary and capricious standard of review. The judge wrote that “this standard is the least demanding form of judicial review…When it is possible to offer a reasoned explanation, based on the evidence, for a particular outcome, that outcome is not arbitrary and capricious.” Arbitrary and capricious review is much more friendly to the ERISA plan than the employee making a claim.
Even though the arbitrary and capricious standard applied and the fact that Reed Group had multiple chances to decide Groth’s claim, the court overturned Reed Group’s denial of Groth’s disability benefits. The court reviewed the facts that supported several reasons for why Reed Group had acted unreasonably:
- Reed Group relied only upon file reviewers to deny Groth’s claim based on her mental conditions;
- Reed Group failed to consider the multiple symptoms that resulted from Groth’s mental impairments;
- Reed Group’s medical reviewer failed to consider all of the facts;
- Reed Group inappropriately relied upon its paper reviewer to attack Groth’s credibility, when the law in the Sixth Circuit specifically prohibits an ERISA disability plan administrator from doing so;
- Reed Group failed to consider all of the requirements of Groth’s job; there was no analysis of the essential requirements of her job in Reed Group’s file;
- Reed Group ignored evidence of Groth’s limitations related to her medication side effects; and
- Reed Group improperly failed to consider Groth’s Social Security Disability decision.
Although the court did not award benefits, but instead remanded the claim back to the Reed Group for another bite at the apple to get it right, the court plainly identified many unreasonable actions in Reed Group’s claim handling that will hopefully help future employees making ERISA disability claims.
If you have been denied ERISA Disability benefits, call ERISA Attorney John V. Tucker at (866) 233-5044.