Monday, February 27, 2006

"Arbitrary and Capricious" Does Not Necessarily Mean Never Having to Say You're Sorry

Doctors_uniform That appears to be the lesson from a recent 6th Circuit case, Brooking v. Hartford Life and Accident Ins. Co., 2006 WL 357881 (6th Cir. Feb. 16, 2006), dealing with the denial of disability benefits.

It appears that Hartford Life and Accident Ins. Co. terminated a registered nurse's long-term disability benefits for an injured back, believing that she could perform the duties of two sedentary health care positions.

After denying the nurse's appeal of her termination of benefits, the nurse filed suit in federal court under ERISA Section 502(a)(1)(B) for denial of benefits. Because the insurance company had followed the advice of the Firestone Court (see this previous post), the appropriate standard of review was whether the denial of the disability claim was arbitrary and capricious.

And although plans usually win under this highly deferential standard, not this time. The 6th Circuit Court of Appeals, overturning the district court, found for the plaintiff. Specifically, the court found that because the nurse was unable to sit for more than four hours in a day, she could not do the suggested sedentary jobs since such jobs require sitting for most of the day. The Court therefore concluded: "Given that [the nurse] cannot sit for more than four hours a day, Hartford Life has not offered a reasoned explanation for its decision to terminate her benefits."

The 6th Circuit's decision in Brooking can be found here.

Hat Tip:   ERISA and Disability Blog


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