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ERISA Claim Decision Was Reasonable, Despite Violation of DOL Regulations

ERISA Claim Decision Was Reasonable, Despite Violation of DOL Regulations

ERISA and Life Insurance News
(April 19, 2011)

Worsley v. Aetna Life Ins. Co.,
2011 U.S. Dist. LEXIS 7170 (W.D.N.C. Jan. 25, 2011)

After a motor vehicle accident in 1996, Worsley returned to work in 1997, but reported that his pain medications caused him to fall asleep at his desk. Worsley’s employer would not accommodate this issue, leading Worsley to submit a claim for long-term disability benefits under his employer’s ERISA plan in July 2001. Aetna approved his claim for disability from his own occupation, and later approved benefits for disability from any occupation.

Although Worsley’s medical records documented pain treatment through 2006, his treating physician noted a reduction of pain in 2001, 2003, and 2005. Throughout this time, Worsley reported working four hours per day at his cabinet-making business. In 2005, his salary increased from $500 to $700 per month. These facts prompted Aetna to investigate Worsley’s ongoing disability.

Aetna’s investigation included surveillance, which revealed that Worsley worked eight hours per day at his cabinet-making business. A conflicting report from his treating physician, stating that Worsley was too impaired to work, led Aetna to request a functional capacity evaluation.

The FCE showed that Worsley was capable of working full time at a medium capacity. When presented with the FCE, his treating physician confirmed the results of the FCE. Based on these facts and two corroborating independent physician reviews, Aetna determined that Worsley was no longer disabled from any occupation in 2006.

In his motion for summary judgment, Worsley argued first that Aetna did not have discretionary authority, because the language in the SPD was insufficient to confer discretion. The court rejected this argument, noting that the group policy contained sufficient language to confer discretion.

Worsley also noted a discrepancy between the group policy’s definition of disabled (unable to earn 70% of predisability income), and the SPD’s definition (80%). The court rejected this argument as well, stating that Worsley failed to show how the discrepancy affected the final determination when Aetna used the more favorable 80% figure.

Worsley showed that Aetna had failed to provide him with 582 documents, consisting of computerized claims notes, when he originally requested all documents relevant to his claim. He argued that this failure violated 29 C.F.R. § 2560.504-1(h)(2). However, Worsley did not include a claim for the violation in his complaint.

Therefore, the court considered the violation only with regard to whether Aetna abused its discretion. Because Aetna successfully demonstrated that the claims notes only included information which was contained elsewhere in the file, the court determined that the failure to produce those documents prior to the litigation did not prejudice Worsley.

Finally, Worsley argued that the court should not consider Aetna’s affidavit respecting its claims procedures and the steps taken to neutralize its structural conflict of interest. Citing Denmark v. Liberty Life Assur. Co. of Boston, 566 F.3d 1 (1st Cir. 2009), the court found it appropriate to consider Aetna’s affidavit for limited evidence regarding procedural safeguards.

Based on the evidence, the court determined that Aetna’s claim decision was reasonable.

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H. Sanders Carter
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