In 2005, Ray submitted a claim to Sun Life for long-term disability benefits under an ERISA plan, based on a heart condition. In support of the claim, Ray’s treating physician stated that her heart condition completely limited her ability to work.
Sun Life approved Ray’s claim, but said that it would seek periodic medical updates to verify her continued eligibility for benefits.
As part of the continuing evaluation, Ray’s treating physician submitted statements in 2006 and 2008, reiterating that Ray remained totally disabled. Sun Life also reviewed Ray’s medical records, which contradicted her claims and those of her treating physician.
After conducting surveillance that further undermined Ray’s claim, Sun Life had her file reviewed by an independent physician consultant, who concluded that Ray was capable of returning to her own occupation. Sun Life terminated the payment of disability benefits.
Ray administratively appealed this determination, submitting her award of social security disability benefits. Sun Life had the file reviewed by another independent physician, who concluded that Ray was capable of light and sedentary work, and that she could return to her own occupation.
Sun Life gave the report to Ray, offering her additional time to submit information to counter the independent physician’s conclusion. Ray did not provide any additional documents, and Sun Life upheld its decision to terminate the payment of benefits.
Ray filed suit against Sun Life, and the federal district court upheld Sun Life’s decision that additional long-term disability benefits were not payable. 752 F. Supp. 2d 1229 (N.D. Ala. 2010). Ray appealed.
On appeal, the Eleventh Circuit affirmed the six-step framework it has established for evaluating an ERISA benefits decision:
(1) determine whether the benefits-denial decision is de novo wrong;
(2) if the decision was wrong, determine whether the administrator had discretion; if not, reverse the decision;
(3) if there was discretion, determine whether the decision was reasonable;
(4) if the benefits decision was not reasonable, reverse it; if it was reasonable, then determine if there was a conflict of interest;
(5) if there is no conflict, affirm the decision;
(6) if there was a conflict, consider it as merely one factor in determining whether the benefits-denial was arbitrary and capricious.
Based on evidence in the record contradicting Ray’s treating physician, the district court determined that Sun Life’s decision was not de novo wrong. The Eleventh Circuit agreed, stating that an ERISA benefits administrator need not accord special weight to a treating physician’s opinion, and that a social security benefits award is not determinative of a claimant’s entitlement to benefits.
The Eleventh Circuit stated that its conclusion that Sun Life’s decision was not de novo wrong "should end the inquiry under our multi-step framework."
However, both the Eleventh Circuit and the district court held that, even if the determination were de novo wrong, it was reasonable, and any conflict of interest did not taint Sun Life’s decision so as to render the decision arbitrary and capricious.
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