Bad Week for Long-Term Disability Claimants in the Federal District Courts

This past week, claimants with long-term disability (“LTD”) claims governed by ERISA have not fared well in the district courts. One district court decided a long-term disability insurance dispute in favor of Metropolitan Life Insurance Company (“MetLife”). In Holder v. Metropolitan Life Insurance Company, No. C. A. 6:21-CV-00490-DCC, 2022 WL 4354406 (D.S.C. Sep. 20, 2022), the court was tasked with deciding whether Traci Holder was enrolled in her employer’s long-term disability plan. MetLife argued that Holder was never enrolled in the disability plan because MetLife denied her Statement of Health forms based on her past medical treatment. Holder did not pay premiums for her disability coverage, nor did she ever file a claim for benefits. Holder argued that MetLife erroneously concluded that she was not covered under the plan so that she was not permitted to file a claim. Holder asserted that MetLife sent a coverage approval letter for the plan back in 2018 so she believed she was enrolled in the plan. She further argues that MetLife should be bound by the coverage determination that it made previously and be ordered to process her claim for LTD benefits. The court, applying abuse of discretion review, ruled in favor of MetLife because Holder did not meet the conditions required under the plan for coverage notwithstanding the 2018 approval letter. Because it found that MetLife’s decision was reasonable and principled, the court affirmed the denial of coverage.

In Krysztofiak v. Boston Mutual Life Insurance Company, No. DKC 19-879, 2022 WL 4290576 (D. Md. Sep. 16, 2022), the court ruled in favor of Boston Mutual on Plaintiff Dana Krysztofiak’s claim for LTD benefits based on her disability caused by fibromyalgia. Boston Mutual initially paid Krysztofiak’s claim for one year but then stopped paying benefits after it decided that Krysztofiak could return to work in her regular occupation. Krysztofiak filed suit arguing that she was entitled to benefits under the “regular occupation” standard of disability. The court agreed and awarded her benefits but sent her claim for “any occupation” benefits to Boston Mutual to decide in the first instance. The claims administrator did not decide her claim so Krysztofiak moved to reopen her lawsuit. Then, Boston Mutual amended its policy to include a “Special Conditions Limitation Rider” which provides only 24 months of payments for disabilities caused by conditions such as fibromyalgia. This provision was new and not in the policy when Krysztofiak first became disabled nor when she won her first lawsuit. Boston Mutual argued that the policy was supposed to have this limitation for fibromyalgia and requested permission to apply it to Krysztofiak’s LTD claim. The court allowed this provision to be enforced, finding that Boston Mutual had the right to amend the policy even after Krysztofiak’s long-term disability claim started. The court reasoned that “disability benefits are not contingent upon a singular event, but upon the continued existence of a disability” and that as a matter of law “an interest in disability benefits does not vest upon the occurrence of a disability.” The court again remanded the case to Boston Mutual to conduct a full and fair review of Krysztofiak’s claim with the application of the special conditions rider.

If an insurance company has denied your claim for long-term disability insurance, contact us for assistance. As these decisions demonstrate, many tricky issues arise in the enforcement of claimants’ rights under the Employee Retirement Income Security Act of 1974.