As we have indicated time and time again, an ERISA administrative appeal is one of the most important documents to be filed as part of your disability insurance claim. Second only to the initial application for benefits, your administrative appeal is often your only opportunity to provide evidence of disability sufficient for an insurance carrier to overturn a denial of benefits. Although some insurance carriers such as Lincoln require a mandatory second appeal and others such as Prudential and Cigna allow for voluntary second appeals, the vast majority of insurance carriers only allow for one level of appeal and if that is denied the only recourse available is to file a lawsuit under ERISA. We have explained the perils of litigating an ERISA based disability policy on many occasions on our website, as such, in this article so we will not go into the Arbitrary and Capricious standard of review commonly applied in ERISA cases. However, it is important to note that in a lawsuit brought under ERISA there are no jury trials nor is there live testimony at “trial,” which means neither you as the insured or your doctors will be allowed to testify before the judge, and last, relevant to this article- no new information after the final denial of benefits will be allowed at trial. With this final caveat, it becomes all the clearer why filing as complete an Appeal as possible is crucial to receiving your disability benefits.
This cautionary tale was reiterated in a recent case with MetLife. The 8th Circuit Court of Appeals, a federal appellate court one level below the Supreme Court, recently entered a ruling in the case of Cooper v. Metropolitan Life Insurance Company, in which the Court upheld the district court’s (trial court) ruling in favor of MetLife. In Cooper the Appellate Court ultimately determined that the district court was correct in finding that MetLife did not act arbitrary and capricious when it denied Cooper’s claim for disability benefits. In rendering this opinion the appellate court specifically references the district court’s decision to not allow affidavits from two of Cooper’s treating physicians to be considered at “trial” as being correct. In its opinion, the appellate court states, in part:
It was likewise not error, as Cooper contends for the district court to exclude affidavits of Drs. Lane and Rathod which she proffered at summary judgment. When an administrator’s benefits determination is reviewed for abuse of discretion, “the scope of review is limited to the evidence before the administrator.”… Although this standard may be relaxed where the purpose of admitting the extrinsic evidence is limited to determining the proper standard of review… Cooper’s purpose here is to challenge the accuracy of Dr. Schiopu’s report. This is a matter that could have been brought before MetLife in the claims appeal process, and the district court did not abuse its discretion in excluding these affidavits from the record.
Essentially the Court ruled that Cooper had the ability to submit affidavits from her doctors to challenge the opinion of MetLife’s doctor during the appeal process, and her failure to due so prevents her from presenting these affidavits to the Court after the final denial of benefits. This is not to say that the affidavits from her doctors would have made a difference in MetLife’s final determination of benefits, but these supportive affidavits would have certainly strengthened her claim for benefits during her appeal and potentially provided additional information that would have led the initial district court to determine MetLife acted arbitrary and capricious in denying her claim for benefits, thus siding with Cooper instead of MetLife.
The appellate and district courts both addressed other issues and points of law in their opinions to support their ruling in favor of MetLife, but the take home point of this article is to reinforce the idea of how important an ERISA administrative appeal is to your claim for disability benefits. Dell & Schaefer has seen numerous instances where an insured writes a simple one page letter advising their insurance company that they are appealing the denial of benefits and provide no new substantive information to combat the insurance company’s opinion. Needless to say these appeals are often met with a rubber stamp denial from the company, and courts have held that an insured is not given any deference for failure to understand the appeal process. With the denial of the appeal the “administrative record” closes and the insured is essentially barred from providing any new information that could have supported their claim. People calling into our office will often tell us that their claims manager advise them to just write a quick appeal letter and their claim will be fine. This recent ruling again reminds us that nothing could be further from the truth. Under ERISA the cards are stacked against you as an insured so it is imperative that you do not give the insurance company any more power by failing to provide a thorough and detailed appeal.
If your claim has been denied and you are in the process of filing an administrative appeal please feel free to contact our office to discuss your claim and to determine how we may be able to assist you.