This month’s Friday Five covers cases relating to: (1) whether a plaintiff may be entitled to AD&D benefits when their spouse died of an illegal drug overdose; (2) when a plaintiff can supplement the administrative record with medical records that post-date the final benefit decision; (3) whether summary judgment is the proper mechanism for cases involving de novo review and disputes of material fact; (4) whether a preexisting condition exclusion applies when questions exist as to the plaintiff’s date of hire and start of coverage; and (5) whether an insurer can deny LTD benefits based on a provision that excludes certain disabling conditions from coverage when the plaintiff’s treating providers and the insurer’s consulting physicians disagree on what conditions plaintiff actually has.

1. Can a plaintiff obtain accidental death and dismemberment benefits if their spouse died of a heroin overdose? Yes. In Yates, the plaintiff filed claims for life insurance benefits and accidental death and dismemberment benefits after her husband died from a heroin overdose. The insurer paid the life insurance benefits but denied the claim for accidental death benefits. The court entered judgment for the plaintiff. First, the court ruled that the plaintiff was not required to exhaust administrative appeal procedures prior to filing her lawsuit because the written plan documents did not contain any appeal procedures to exhaust. Rather, the insurer’s appeal procedures were only listed in its denial letter, which the court held was insufficient to satisfy ERISA’s regulations. Alternatively, the court held that plaintiff would be deemed to have exhausted the administrative remedies available under the plan because the plan documents did not comply with ERISA’s requirements. Turning to the merits of the claim, the court held that the insurer erred by denying the accidental death claim. It rejected the insurer’s argument that because the husband “voluntarily injected heroin, which caused his death by overdose, his death was not an accident and was an intentionally self-inflicted injury that is expressly excluded from coverage.” The court held that the husband’s death was accidental and that the policy's exception for “intentionally self-inflicted injuries” did not apply because there was no evidence that the husband “intended his death to occur or that he should have known death was highly likely to occur as a result of injecting heroin.” Yates v. Symetra Life Insurance Co., No. 4:19-CV-154 RLW, 2022 WL 19211 (E.D. Mo. Jan. 3, 2022).
2. Can a plaintiff supplement the administrative record with a letter from their medical provider that post-dates the final administrative decision? Yes, if the plaintiff can show “good cause,” such as where the letter shows some possible bad faith by the insurer. In Feltington, the court permitted the plaintiff to supplement the administrative record with a  letter from her physical therapist because the letter showed potential “indicia of bad faith” by the insurer. The plaintiff brought an action under ERISA after the insurer terminated her LTD benefits. She then filed a motion to supplement the record with two letters that were sent after the final administrative decision was rendered, which the court noted is typically not permitted unless a showing of bad faith or a conflict of interest is made. The court held that the plaintiff sufficiently showed “good cause” required to supplement the administrative record as to one of the letters because the plaintiff seemed “to have pointed to some indicia of bad faith” by the insurer. Specifically, the insurer allegedly disregarded a Functional Capacity Evaluation (“FCE”) submitted by the plaintiff’s physical therapist because it had not been signed and the physical therapist had not called the insurer’s independent medical examiner back, although he purportedly reached out a number of times. However, the physical therapist’s letter directly contradicted those facts and noted that the FCE report stated that the examiner had only called the physical therapist once, and that call was returned. The court held that the letter therefore “shows some possible form of bad faith on Defendant's part, and therefore meet[s] the good cause requirement to be consider[ed] in addition to the administrative record.” Conversely, the court rejected the plaintiff’s effort to supplement the record with a separate letter from plaintiff's counsel that contained legal argument and did not meet the good cause requirement. Feltington v. Hartford Life Ins. Co., No. 14CV06616GRBJMW, 2021 WL 5577924 (E.D.N.Y. Nov. 30, 2021).
3. Is a Rule 56 Motion for Summary Judgment the proper vehicle for resolving disability benefit disputes when the de novo standard of review applies and genuine disputes of material fact exist in the administrative record? In certain jurisdictions, no because summary judgment requires that there be no genuine dispute of material fact, and ERISA benefit disputes commonly involve competing medical evidence and credibility issues that constitute “disputes of material fact” and necessarily require weighing the evidence and making credibility determinations. In Avenoso, the insurer terminated LTD benefits when the plaintiff reached the “any occupation” stage on the basis that the plaintiff was able to work in a sedentary capacity. The administrator lacked discretionary authority, so the de novo standard of review applied. The district court granted summary judgment in favor of the plaintiff. On appeal, the Eighth Circuit held that the district court erred by weighing the evidence, making credibility determinations, and reaching findings on disputed factual questions on summary judgment. Summary judgment is appropriate where a movant is entitled to judgment as a matter of law because there is no genuine dispute of material fact. The plaintiff defended the district court's use of summary judgment by arguing that “summary judgment is merely a vehicle for submitting the case to the district court for decision on the administrative record.” The court noted that some jurisdictions, including the First Circuit, have “created an exception from ordinary summary-judgment procedures for challenges to the denial of ERISA benefits,” but that is not the law in the Eighth Circuit and several others. The court explained that summary judgment may be a proper vehicle for adjudicating ERISA benefit cases when the abuse of discretion standard applies because those normally involve a “purely legal inquiry”—i.e., whether, on the applicable record, a reasonable factfinder could have reached a certain outcome. However, the court held that “ordinary summary-judgment procedures” must be followed in cases where the administrator lacked discretionary authority. Thus, the court concluded that “[p]arties that wish the district court to exercise its factfinding function under Federal Rules of Civil Procedure 39(b) and 52(a)(1) to decide the case on the administrative record should ask the district court to do exactly that.” Otherwise, “[i]f instead a party moves for summary judgment under [Rule] 56, then the district court must follow the procedures outlined in that rule and grant summary judgment only if ‘there is no genuine issue as to any material fact’ and ‘the moving party is entitled to judgment as a matter of law.’” Ultimately, the court held that the error was harmless because the district court’s determination that plaintiff was unable to perform sedentary-duty work was not clearly erroneous and neither party had additional evidence for the court to consider. Avenoso v. Reliance Standard Life Ins. Co., 19 F. 4th 1020 (8th Cir. 2021).
4. Can an insurer apply an exclusion for preexisting conditions from LTD coverage when the administrative record includes discrepancies regarding the dates on which the plaintiff was hired and coverage began? No, if the discrepancies in dates might alter whether the preexisting condition applies. Insurers should seek clarification from employers to make sure the correct dates of hire are made clear in the administrative record. In Fonseca, the insurer denied the plaintiff’s claim for LTD benefits after finding that some of her conditions were subject to the LTD policy's preexisting condition exclusion. The policy contained a provision whereby individuals would not be covered for a disability “caused or contributed to by” a preexisting condition unless, on the date the individual became disabled, they had been continuously insured under the policy for 12 months. The exclusion applied a 90-day “lookback” period from the date that LTD coverage became effective. The insurer concluded that the preexisting condition exclusion was applicable because plaintiff’s date of disability was less than 12 months after her LTD coverage went into effect. The insurer also determined that the plaintiff had received treatment for several of her alleged disabling conditions during the 90-day period before her insurance became effective. Because it determined that any disability from those conditions was precluded for purposes of LTD benefits, the insurer did not make a determination as to whether the plaintiff had any limitations associated with those conditions. The insurer did, however, determine that her remaining condition of migraine headaches (to which the exclusion did not apply) was not disabling. The plaintiff filed suit, and the court remanded the insurer’s decision because it was not clear whether the preexisting condition exclusion applied. Specifically, whether the exclusion applied hinged on the date that the plaintiff was hired and when her LTD coverage became effective. Those dates correspondingly govern the 12-month coverage period and 90-day lookback period for purposes of applying the preexisting condition exclusion. Because the administrative record contained discrepancies and ambiguities regarding the date that the plaintiff was actually hired and when her coverage began that could alter whether the preexisting condition exclusion applied, the court held that it was unable to determine whether the exclusion was properly applied. As a result, the court remanded the matter so that the insurer could resolve the discrepancy by obtaining clarification from the employer. Fonseca v. Standard Insurance Co., No. CV 20-1242, 2021 WL 6135563 (E.D. La. Dec. 29, 2021).
5. Can an insurer deny LTD benefits based on a provision excluding certain disabling conditions from coverage when the plaintiff’s treating providers and the insurer’s consulting physicians disagree on what conditions plaintiff actually has? Yes, under an abuse of discretion standard, as long as the decision is rationally supported by the record. In Zall, after paying LTD benefits to the plaintiff for six years, the insurer terminated benefits under the policy’s “Other Limited Conditions” provision, which limited LTD benefit payments to 24 months if the disabled condition is caused by certain conditions. The plaintiff filed suit under ERISA, and the court granted summary judgment in favor of the insurer. First, the court rejected the plaintiff’s argument that the insurer failed to provide him a copy of its medical examiner’s report or give the plaintiff a chance to respond to it before terminating benefits. Although new claims-procedure regulations promulgated by the Department of Labor that went into effect in January 2017 provide that a claims administrator must produce documents developed or considered during the administrative appeal before rendering its final determination, the new rules only apply to claims filed after April 1, 2018. In this case, the claim was filed in 2013. The court rejected the plaintiff’s argument that the new rules should apply to medical reviews conducted after April 1, 2018. As the court explained, “[n]othing in the regulations suggests that a continuing eligibility review is a ‘request for a plan benefit made by a claimant[.]’” Second, the court upheld the insurer’s determination that the plaintiff’s disabling conditions fell under the “Other Limited Conditions” provision, and payments were therefore limited to 24 months. The plaintiff’s treating physicians and the insurer’s consulting physicians disagreed over whether the plaintiff suffered from specific conditions that were expressly excluded from the “Other Limited Conditions” provision. However, applying the abuse of discretion standard, the court held that the insurer was entitled to credit the opinions of its consulting physicians over the treating physicians so long as its choice was “rationally supported by record evidence,” which the court concluded it was. Finally, the court rejected the plaintiff’s argument that the insurer waived its right to terminate his benefits by paying him benefits for more than six years after the date on which it asserts his benefits should have ended. The court concluded that there was no evidence that the insurer continued to pay benefits because it found that the Other Limited Conditions limitation did not apply. Rather, the plaintiff’s file seemed “to have fallen through the cracks” for over two years until the insurer renewed its pursuit of updated medical records. Zall v. Standard Insurance Co., No. 21-CV-19-SLC, 2021 WL 6112638 (W.D. Wis. Dec. 27, 2021).