This month’s Friday Five covers recent cases addressing eligibility requirements to qualify for disability benefits, the application of plan-prescribed time limits for filing suit, partial versus total disability and a claimed circuit split regarding futility and exhaustion of administrative remedies. 

1. Can “vacation pay” be included to meet an “hours of service” eligibility requirement to qualify for disability benefits? The U.S. Court of Appeals for the Third Circuit upheld a grant of summary judgment in favor of a pension plan’s board in Hansen. To qualify for disability benefits, the claimant needed to show that he had at least 1,000 “Hours of Service in Covered Employment.” The Court of Appeals found that it was not arbitrary or capricious to exclude the claimant’s vacation pay from the “hours of service” total because under the facts before the Court, this would have effectively represented a double-counting of hours the claimant actually worked. Hansen v. International Union of Painters & Allied Trades Industry Pension Plan, No. 18-2921, 3rd Cir. (Jul. 24, 2019).  
2. Is there a difference between exhaustion and accrual in determining whether a claim was timely filed? In Faciane, the U.S. Court of Appeals for the Fifth Circuit affirmed the district court’s grant of summary judgment in favor of the insurer which found that the claimant did not timely file suit. The plan required the claimant to file suit within three years of the accrual of his claim. The claimant argued that the claim accrued only with the “formal” denial by the insurer of his administrative appeal. The Court of Appeals rejected this argument, noting that “exhaustion and accrual are different inquiries.” Faciane v. Sun Life Assurance Company of Canada, No. 18-30918, 5th Cir. (Jul. 25, 2019).
3. Can a plan require a “written application” in order to be eligible for benefits? The U.S. District Court for the Western District of Louisiana, in Ketchum, held that creating such a requirement was an abuse of discretion. The court granted a summary judgment to a claimant who had been denied benefits because he did not make a “written application,” which the disability panel claimed was a requirement of the policy. The District Court found that the cited policy provision was ambiguous at best, the procedural section of the plan documents directly contradicted the disability benefits section, and it was an abuse of discretion to interpret the plan language to make filing a written application a requirement for eligibility. Ketchum v. Saint-Gobain Corp., No. 18-562, W.D. La (Jul. 22, 2019).
4. Partial versus total disability and the impact on lifetime benefits. The U.S. District Court for the District of Massachusetts, in Hammond, found that the insurer did not abuse its discretion in finding that a claimant was partially, not totally, disabled. The court found that there was “substantial evidence” in the administrative record to support the insurer’s conclusion that the pro se claimant could work with restrictions at the time of his appeal, including “unanimous” medical opinions that he could do at least some work. The effect, which the district court also upheld, was to deny the claim on the basis that the lifetime maximum for partial disability benefits had been reached. Hammond v. Procter & Gamble Health & Long Term Disability Plan, No. 18-11343, D. Mass. (Jul. 11, 2019).
5. Is there a circuit split regarding the remedies available to a claimant seeking review under an “any occupation” disability standard? A disability claimant says yes and has asked the United States Supreme Court to review a decision of the U.S. Court of Appeals for the Third Circuit. In Kelly, the insurer denied the claimant’s own occupation claim. That decision was reversed by the district court. The issue requested for review by the Supreme Court relates to the any occupation disability determination. According to the claimant, when the insurer denied his own occupation claim, that denial was a denial of his any occupation claim as well. In deciding that the claimant could perform the duties of his own occupation, it was tacitly deciding that he was not disabled under the any occupation standard as well. The insurer moved to remand the case so that it could determine whether the claimant was disabled from performing any occupation. The claimant contended that it was futile to require him to retroactively seek any occupation benefits. The district court granted the insurer’s motion, holding that the claimant had failed to exhaust his administrative remedies with regard to his any occupation claim. The Third Circuit affirmed. The claimant alleges that in so holding, the Third Circuit split from the Fourth, Eleventh, Sixth and Second Circuits. Kelly v. Reliance Standard Life Insurance Company, No. 18-1162, reported at 764 Fed. Appx. 160 (3rd Cir. 2019).