In Jacowski v. Kraft Foods, et al., the Federal District Court for the Western District of Wisconsin denied plaintiff Kathy Jacowski‘s claim that Aetna arbitrarily and capriciously terminated her long-term disability benefits in violation of ERISA.
Jacowski began working for Kraft Foods in 1981. In 2008, Jacowksi quit her job, citing her poor mental health. Her treating physician diagnosed her with depression, anxiety, and post-traumatic-stress disorder. In 2011, she was notified by Aetna, the insurer that Kraft contracted with to administer its disability benefits, that she qualified for total disability benefits. She received these benefits until February, 2014, when they were terminated.

Jacowski’s Claim

Jacowski claimed that the termination of her benefits violated ERISA because it was arbitrary and capricious. Her claim cited five reasons:
1. The defendant relied on biased medical evidence, and did not give deference to the opinion of her treating physician;
2. The defendant didn’t consider the fact that the Social Security Administration had determined that she is disabled;
3. There was no occupational analysis done which identified a job she could do;
4. The defendant didn’t consider her voluntary appeal; and
5. There was a conflict of interest between the defendant’s role of considering voluntary appeals and its interest in denying benefits.

The Legal Standard

The court noted that the “arbitrary and capricious standard is the least demanding form of judicial review,” but that “it is not a rubber stamp” for insurer decisions.

The Opinion

First, the court held that insurers have the right to consider all relevant medical evidence, and that ERISA does not require that deference be given to treating physicians.

Next, the court found that, “Although plaintiff is correct that failing to consider the Social Security Administration’s finding of disability may be evidence of arbitrary decision-making, a plan administrator is not forever bound by that determination.” In this case, because the SSA determination was more than five years old, the court determined that it was within the defendant’s discretion to ignore it.

The court then held that, under ERISA, “no categorical rule requires a plan administrator to provide the type of vocational analysis claim that plaintiff describes.” The court found that ERISA merely requires a “reasonable inquiry” into a claimant’s vocational potential.

Finally, the court determined that hearing a voluntary appeal is discretionary, and a decision not to do so is not subject to “arbitrary and capricious” review. As such, the court found that the conflict of interest was also not reviewable.

This case was not handled by Dell & Schaefer, but we feel it can be instructive for others who have had long-term disability benefits terminated. If you have a question about this case, or any other issue concerning disability benefits, contact one of our attorneys today for a free consultation.