In two decisions issued last month, the Fifth Circuit upheld ERISA plan denials of disability and life benefits, confirming its deferential approach in most ERISA benefit cases.

In Schiro v. Office Depot, Inc.,¹ a Fifth Circuit panel reversed the lower court's judgment that an ERISA plan administrator, Sedgwick Claims Management Services, Inc., abused its discretion in denying the plaintiff's short-term disability benefits claim. The panel found that the denial of benefits was supported by substantial evidence where the denial was based on Sedgwick's medical personnel's opinions formed after numerous, thorough reviews of the claims and objective medical evidence, despite not conducting an independent medical examination. The panel also found that the district court imposed an inappropriate "treating physician" rule by giving some deference to the opinions of the plaintiff's treating physicians, when prior Fifth Circuit and Supreme Court decisions have recognized that courts should not require administrators to automatically accord special weight to such opinions or impose on administrators a discrete burden of explanation when they credit reliable evidence that conflicts with a treating physician's evaluation. Accordingly, the panel noted that under a proper abuse-of-discretion standard, Sedgwick was not required to explain why it credited its internal opinions over those of the treating physicians, nor was its evidence less substantial in light of the conflicting opinions offered by the treating physicians.

In Hagen v. Aetna Life Ins. Co.,² a different Fifth Circuit panel affirmed the lower court's final judgment upholding an ERISA plan administrator's decision to deny life insurance benefits. Aetna denied the plaintiff's claim for benefits related to the alleged accidental death of her husband after determining that his death, which followed after he sustained a fractured hip from a fall, was caused or contributed to by various illnesses he had. The panel rejected the plaintiff's challenge that Aetna's role as both insurer and claims administrator created a conflict of interest that should have been given greater weight. Specifically, it found that Aetna's claims process was not procedurally unreasonable even though it took over a year to make a determination and changed its rationale for denying the claim on appeal; that there was no evidence of history of biased claims administration despite an offering that the reviewer denied 17 of the 20 claims she reviewed for Aetna over the past few years; and that Aetna's failure to take steps to reduce bias was not sufficient to give its conflict greater weight. Thus, the panel proceeded to find that substantial evidence supported Aetna's conclusion that the decedent's separate illness was a but-for cause of his fall, leaving open the issue of whether but-for causation or only contributing causation was required by the plan's "accident" terms.

Impact: The Fifth Circuit Court of Appeals continues to narrowly review abuse-of-discretion cases and strictly construe "reviewing physician" and conflict-of-interest principles in favor of the plan administrators in these types of cases. However, the Court's thorough analysis underscores the need for plan administrators to thoughtfully and completely review the medical records and related information submitted during the administrative process.

¹No. 15-30066, 2015 U.S. App. LEXIS 22331 (5^th Cir. Dec. 16, 2015).

²No. 15-40597, 2015 U.S. App. LEXIS 21460 (5^th Cir. Dec. 11, 2015).