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ERISA – Long-term Disability Benefits

By: Derek Hawkins//October 3, 2018//

ERISA – Long-term Disability Benefits

By: Derek Hawkins//October 3, 2018//

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7th Circuit Court of Appeals

Case Name: Susan Hennen v. Metropolitan Life Insurance Company

Case No.: 17-3080

Officials: EASTERBROOK, RIPPLE, and HAMILTON, Circuit Judges.

Focus: ERISA – Long-term Disability Benefits

Plaintiff-appellant Susan Hennen worked as a sales specialist for NCR Corporation from 2010 to May 2012, when she sought treatment for a back injury. As an employee, Hennen was covered by long-term disability insurance under a group policy provided by defendant-appellee Metropolitan Life Insurance Company (“MetLife”). When physical therapy and surgery failed to resolve her injury, Hennen applied for long-term disability benefits under the insurance plan.

Acting as plan administrator, MetLife agreed that Hennen was disabled and paid benefits for two years. The plan has a two-year limit, however, for neuromusculoskeletal disorders. That limit is subject to several exceptions, one of which applies to cases of radiculopathy. After paying for two years, MetLife terminated Hennen’s benefits, finding that the two year limit applied. Hennen believes that she is entitled to continued benefits because she has radiculopathy. She sued under the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. (ERISA), arguing that MetLife’s determination that she did not have radiculopathy was arbitrary and capricious. The district court granted summary judgment for MetLife, and Hennen appeals. We reverse and remand. MetLife acted arbitrarily when it discounted the opinions of four doctors who diagnosed Hennen with radiculopathy in favor of the opinion of one physician who ultimately disagreed, but only while recommending additional testing that MetLife declined to pursue.

“In a case where the plan administrator did not afford adequate procedures in its initial denial of benefits, the appropriate remedy respecting the status quo and correcting for the defective procedures is to provide the claimant with the procedures that she sought in the first place.” Hackett, 315 F.3d at 776, citing Wolfe v. J.C. Penney Co., Inc., 710 F.2d 388, 394 (7th Cir. 1983). The fact that MetLife acted arbitrarily “does not mean that the claimant is automatically entitled to benefits.” Id. A remand to MetLife is necessary here so that it can reassess Hennen’s claim consistent with this opinion. Also, MetLife has not yet determined Hennen’s degree of disability. That determination will be necessary if on remand MetLife finds that Hennen has satisfied the radiculopathy exception to the neuromusculoskeletal limit.

Reversed and Remanded

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.

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