United Of Omaha Deprived A Massachusetts Legal Assistant Of A Full And Fair Review In LTD Claim

Karen Jette, formerly employed as a legal assistant, filed for short-term disability (STD) benefits on July 23, 2013, and subsequently applied for LTD benefits on August 16, 2013, due to lower back pain. United of Omaha Life Insurance Company initially approved STD benefits and later approved LTD benefits on May 6, 2014, after an appeal from Jette.

The medical evidence presented included Jette’s history of back pain, surgeries, and treatments. Doctors diagnosed conditions like lumbar sprain, lumbar degenerative disease, and spondylitis. Despite various treatments and surgeries, Jette continued to experience significant pain and physical limitations. However, on January 19, 2016, United of Omaha informed Jette that her LTD benefits would be terminated after January 15, 2016.

After United of Omaha terminated Jette’s disability benefits, Jette filed for an appeal. While the internal appeal was pending, United of Omaha hired a doctor to examine Jette. The doctor then sent United of Omaha a report of his findings. Despite Jette’s request, United of Omaha did not give Jette a copy of the doctor’s report or allow her to respond. United of Omaha then upheld the termination of benefits, relying partly on the doctor’s report and leading Jette to file a lawsuit in the United States District Court for the District of Massachusetts

Jette’s Arguments

The plaintiff’s arguments against United of Omaha were as follows:

1. Severe Back Pain and Medical Treatments: Jette argued that her severe back pain, which was the result of a back injury, prevented her from performing her job as a legal assistant. She underwent various medical treatments, including surgeries, and consistently sought medical advice and interventions for her back pain.
2. Medical Opinions Supporting Disability: Multiple medical opinions, initially including those of her treating physician, Dr. Bulczynski, supported her disability claim. These opinions detailed her physical limitations and the impact on her ability to work. For example, Dr. Bulczynski’s assessments indicated significant sitting, standing, walking, and lifting restrictions, suggesting that Jette could not work in a regular, sedentary capacity (at a desk job).
3. Continued Pain and Physical Limitations: Jette highlighted her ongoing symptoms and limitations, including frequent pain, the need for pain medication, and limited physical capabilities. This was to demonstrate the chronic and debilitating nature of her condition.
4. Appeal of LTD Benefits Termination: After United of Omaha initially approved and terminated her LTD benefits, Jette appealed the termination. She argued that the evidence supported the continuation of her benefits and that her condition had not improved to the extent that would allow her to return to work.
5. Discrepancies in Medical Opinions: Jette contended with the discrepancies in medical opinions, particularly the shift in Dr. Bulczynski’s views, which initially supported her disability claim but later suggested she could perform limited work activities.
6. Right to a Full and Fair Review: Jette argued that she did not receive a full and fair review of her claim, as required by the Employee Retirement Income Security Act (ERISA) and its implementing regulation. Jette’s argument focused on the failure of United of Omaha Life Insurance Company to provide her with a copy of a doctor’s report, which was used in part to uphold the termination of her benefits, and the lack of an opportunity to respond to this report before the final decision on her appeal.

United of Omaha’s Arguments

United of Omaha’s arguments against the plaintiff were as follows:

1. No Obligation to Disclose Doctor’s Report: United of Omaha argued that under ERISA regulations, they were not required to provide Jette with a copy of the independent medical examination (IME) report by Dr. Donald Thomson before making a final decision on her appeal because In the insurance company’s view, “ERISA regulations required it to provide relevant claim information prior to an appeal, and after [its] decision on appeal is rendered, but not during the appeal process.”
2. Consistency in Decision Making: United of Omaha maintained that their decision on appeal was consistent with their initial decision to terminate LTD benefits, asserting that Jette’s functional limitations did not preclude her from performing sedentary work.
3. Substantial Evidence Supporting Decision: United of Omaha contended that their decision to uphold the termination of Jette’s LTD benefits was supported by substantial evidence in the record, including medical documentation and activities.

Court’s Conclusion

The District Court for the District of Massachusetts granted United of Omaha’s motion for summary judgment and denied Jette’s motion. The Court found that United of Omaha had not committed a procedural violation in terminating Jette’s benefits and that while Jette had some limitations due to her back pain and related conditions, these did not render her wholly disabled under the terms of the LTD policy.

However, the First Circuit Court of Appeals vacated the summary judgment granted by the district court, finding that United of Omaha violated 29 C.F.R. § 2560.503-1(h) by failing to provide a full and fair review of Jette’s claim.

“According to the plain language of the regulation, upon Jette’s request for documents after the initial adverse determination, United had to disclose to Jette Dr. Thomson’s report, which was relevant to her claim for LTD benefits regardless of whether it would be used to support a new reason to deny coverage. See 29 C.F.R. § 2560.503-1(h)(2)(iii). United then had to give her the opportunity to respond to the report by submitting written comments, documents, records, or other information relating to her claim that she deemed appropriate. See id. § 2560.503-1(h)(2)(ii). Finally, United’s review on appeal had to take into account these new submissions. See id. § 2560.503-1(h)(2)(iv). By failing to do so, United deprived Jette of a full and fair review of her claim.”

The case was remanded back to the district court with instructions that the case be remanded to United of Omaha for a full and fair review of Jette’s claim.