District Court Affirms Discretionary Standard of Review and Upholds Unum’s Denial of ERISA Long-Term Disability Benefits

In Li v. First Unum Life Insurance Company, No. 23CV6985 (DLC), 2025 WL 326492 (S.D.N.Y. Jan. 29, 2025), applying an abuse of discretion standard of review, New York Southern District Judge Denise Cote granted judgment to First Unum dismissing Plaintiff’s claim for long-term disability benefits under the Employee Retirement Income Security Act of 1974 (ERISA).

Plaintiff-Appellant Li, a former Consultant and Senior Partner at McKinsey & Co., filed for long-term disability benefits (“LTD”), asserting that anxiety and depression rendered him unable to fulfill his occupational duties. According to the terms of McKinsey’s Group Long Term Disability Insurance Policy, to qualify for benefits, a claimant must prove disability and the need for regular physician attendance. The policy included a 180-day elimination period, during which no benefits are payable. First Unum denied Li’s claim, finding that Li’s condition was not so severe as to preclude him from performing his job duties throughout the elimination period. Following two appeals and two independent medical examinations, First Unum uphold its decision, and the instant lawsuit followed.

The court’s review turned on whether First Unum’s denial of benefits was arbitrary and capricious, a standard applied when plan documents confer discretion on the administrator. The court noted that the plan, through its Summary Plan Description (SPD) and the Policy, clearly granted First Unum this discretion. This shifted the burden to Li to demonstrate that First Unum’s decision lacked reason or substantial evidence.

The court found that First Unum’s decision was informed by comprehensive peer reviews from medical professionals, including psychiatrists and neuropsychologists, who evaluated Li’s medical records and determined that the evidence did not substantiate a disabling condition during the elimination period. The court emphasized that ERISA does not require plan administrators to defer to the opinions of treating physicians over other credible medical evidence. The medical reviewers noted that Li’s treatment records lacked consistent evidence of impairing psychiatric pathology and highlighted the limited nature of Li’s treatment plan, which consisted mainly of monthly medication management without intensive psychotherapy.

Li argued that First Unum failed to adhere to ERISA’s claims procedure regulations, particularly 29 C.F.R. § 2560.503-1, by not addressing the risk of self-harm and by ignoring opinions of examining professionals. However, the court found that First Unum provided adequate written notice of the denial and allowed for a full and fair review of the claim, thereby complying with ERISA’s procedural requirements. The court also noted that First Unum considered all relevant and timely submitted medical evidence and provided a sufficient explanation for its disagreement with Li’s treating physician’s conclusions.

The court also rejected Li’s challenge to the exclusion of certain evidence from the administrative record, as it found no good cause to expand the record beyond what was available to the administrator at the time of the final decision. The court underscored that judicial review in ERISA cases is generally confined to the administrative record unless a conflict of interest or procedural irregularity is demonstrated, neither of which Li established.

Accordingly, the court concluded that First Unum’s denial of Li’s long-term disability benefits was neither arbitrary nor capricious and was supported by substantial evidence. The decision underscores the importance of clear discretionary language in plan documents and the deference afforded to plan administrators under such circumstances. The ruling also highlights the necessity for claimants to provide robust and objective medical evidence to challenge benefit denials successfully. Judgment was entered for First Unum, thereby affirming the denial of benefits and reinforcing standards for review and evidence in ERISA litigation.

If Unum or your insurer has denied or otherwise limited your disability insurance claim, contact us for assistance.