After working 31 years as a registered nurse at a hospital, Cole submitted a claim for long-term disability benefits under her employer’s welfare benefit plan, which was fully insured by Aetna. She received benefits for disability from her own occupation, but Aetna then determined that Cole was not disabled under the "any occupation" test.
Cole appealed and submitted additional documents on appeal, including an independent medical report which concluded that she did not have a functional impairment that would preclude her from working in any occupation.
Aetna notified Cole of its decision to uphold the original claim decision, but in the letter Aetna erroneously listed documents pertaining to another claimant as being among those it had reviewed in affirming the denial.
Cole then retained counsel and requested that Aetna reopen her claim. She submitted further documents, but Aetna denied her request for reconsideration. Cole filed suit, asserting an ERISA claim, and she then filed a motion to remand the claim to Aetna, seeking further review based on claims that Aetna had committed procedural errors.
Under 29 C.F.R. § 2560.503-1(h)(1), every employee benefits plan must have a procedure under which a participant can appeal an adverse benefit determination, and have a full and fair review of the claim and decision.
A full and fair review must include (1) 180 days to appeal the decision; (2) an opportunity for the claimant to "submit written comments, documents, records, and other information relating to the claims for benefits"; (3) access, upon request, to all information relevant to the claim; (4) a "review that takes into account all comments, documents, records, and other information submitted by the claimant relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination"; (5) a review that does not afford deference to the initial adverse benefit determination; (6) identification of medical experts consulted; and (7) consultation by a medical consultant who was not consulted in connection with the adverse benefit determination. See 29 C.F.R. § 2560.503-1(h)(2) & (3).
Additionally, 29 C.F.R. § 2560.503-1(j) requires the plan administrator to provide written notification of the outcome of the review, including "[t]he specific reason or reasons for the adverse determination." In cases where there is a procedural ERISA violation, the Fourth Circuit has held that the appropriate remedy is to remand the matter to the plan administrator so that a "full and fair review" can be accomplished. Gagliano v. Reliance Standard Life Ins. Co., 547 F.3d 230, 240 (2008).
In holding that Aetna failed to give Cole proper notification of the claim decision, the federal district court scrutinized the composition of Aetna’s denial letter. The court said that about one-third of the letter was standard LTD policy language, and another one-third consisted of a list of documents that purportedly were included in Aetna’s review, but that were completely unrelated to Cole’s claim. The final one-third was specific to Cole and her medical condition, but the language was taken almost verbatim from the report of Cole’s independent medical examiner, which was supplemented as part of the appeal.
The court interpreted the erroneous list of documents and the copied language from the medical report as indicating "a lack of familiarity" by Aetna with regard to Cole’s claim. As a result, the court held that Cole had not been provided a full and fair review. Further, the court ruled that Aetna failed to provide specific reasons for the adverse determination, despite the fact that the independent medical examiner’s report was consistent with Aetna’s original denial, confirming that Cole was not disabled from "any occupation."
For those reasons, the court remanded Cole’s claim to Aetna, and held that Cole could submit further documentation in support of her claim for LTD benefits, including documents created after her first appeal.
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