ERISA and long term disability benefits
In Meraou v. The Williams Companies, Case No. 06-5051, the Court was faced with the issue of whether an ERISA plan properly terminated long term disability (LTD) benefits. The Plan provided that benefits could be terminated if the participant either ceased to be disabled, or failed to provide current medical information. The claims administrator sought current medical information from the participant, Meraou, on February 27, 2002. Some but not all of the requested information was supplied. The administrator then asked Meraou to see a physician it had paid to get the requested information. Meraou responded by stating she was seeing a different doctor, and that doctor would supply the information. No information was received by July 30, 2002, and Meraou was warned that her benefits would be terminated for failure to supply the information. Benefits were terminated effective August 1, 2002, for failure to provide the information. After an appeal was filed, additional information was provided. The appeal was denied because it was determined that Meraou was no longer disabled. Another appeal resulted in an affirmance of the denial because Meraou was no longer totally disabled.
The trial court found that the Plan’s decision was based on substantial evidence and was not arbitrary and capricious. It therefore upheld the decision terminating benefits. The Tenth Circuit found the arbitrary and capricious standard of review applied, and reviewed the trial court’s determination de novo. The court found that it was not unreasonable to require objective evidence of the disability; that the Plan had considered the combined effects of the claimed impairments to determine whether she was disabled; that the Plan was not estopped from contesting disability simply because she was receiving social security disability benefits; and the Plan was not estopped from terminating her benefits based on its prior determination of disability. The grant of benefits did not foreclose subsequent review of her claims, and determination of disability under social security does not equate to disability under the Plan. The denial was affirmed.
Read the case:
http://www.kscourts.org/ca10/cases/2007/02/06-5051.htm
