In Kevin C. McCusker v. Unum Life Insurance Co. of America, Et al., Plaintiff found his wife dead in their house on February 10, 2016. The wife had been employed by Fidelity Bank where she was a participant in a group life and accidental death plan through Fidelity’s employee welfare benefit plan. Plaintiff was named as the beneficiary. Under the plan, “Unum is vested with discretionary authority to make benefit determinations…”
The Coroner “classified her death as an ‘accident’ caused by ‘multiple drug toxicity’ as a result of ‘drug use.'” Based on that cause of death, on July 26, 2016, Unum denied Plaintiff accidental death benefits, asserting the policy contained exclusions that exempted his wife’s death from coverage. Plaintiff filed an administrative appeal.
After Plaintiff exhausted his administrative remedies, he filed this action in the U.S. District Court for the Eastern District of Louisiana. The Court found Unum had violated a procedural requirement of ERISA by failing to give adequate notice of its reason for denying Plaintiff the death benefits. Therefore, it remanded the case to Unum so it could make a “full and fair review” of Plaintiff’s claim.
Unum Did Not Substantially Comply with ERISA’s Procedural Requirements
ERISA requires plan administrators to “provide review of the specific ground for an adverse benefits decision.” Here, Unum denied Plaintiff the death benefit because his wife’s death due to multiple drug toxicity was not a covered benefit. On the administrative appeal, Unum only presented this in a “conclusory fashion.” It was only in this litigation that Unum tried to clarify its position by citing to a specific exclusion clause in the policy.
The Court held that Unum’s failure to follow this procedural requirement “hindered” its review. Since the denial during the administrative review was not specific enough to give notice to Plaintiff, he never had a chance to contest it.
Remedy When the Administrator Does Not Substantially Comply with ERISA’s Procedural Requirements is to Remand
Unless the Court is convinced that the plan administrator acted arbitrarily and capriciously or abused its discretion, the remedy for the administrator’s procedural noncompliance is to remand to the administrator to provide the Plaintiff a full and fair review after he has been given specific notice of the reason for the denial of his claim. Here, the Court was not convinced Unum’s decision was arbitrary and capricious or that it abused its discretion, so the case was remanded to Unum. The Court concluded: “The Plaintiff will be provided an opportunity to administratively contest the specific ground for denial raised in this litigation: the medical treatment exclusion.”
This case was not handled by our office, but we believe it can be instructive to beneficiaries who are fighting for the death benefits that are owed to them. If you have questions about a similar issue, contact any of our disability attorneys at Dell & Schaefer. We offer a free case consultation.