District Court Finds Reliance Standard Abused Its Discretion in Terminating Disability Benefits by Failing to Consider Ongoing Cognitive Impairment Resulting from Post-Acute COVID Syndrome

In Ward v. Reliance Standard Life Insurance Company, No. CV SAG-23-2147, 2024 WL 3206709 (D. Md. June 21, 2024) Maryland District Judge Stephanie A. Gallagher granted judgment to Plaintiff in her claim for long-term disability (“LTD”) benefits under an ERISA-governed employee benefit plan insured by Defendant Reliance Standard Insurance Company and remanded the matter to the insurer for further proceedings.

Plaintiff was employed as a Senior Principal Health Systems Engineer for the MITRE Corporation when she stopped working on January 6, 2021, due to post-acute COVID syndrome with symptoms of migraines, fatigue, cognitive issues, brain fog, chronic cough, and dyspnea. Reliance approved Plaintiff’s LTD claim with benefits payable effective July 30, 2021. Plaintiff also applied for and received Social Security disability benefits which were an offset to Plaintiff’s LTD benefits.

In August 2022, Reliance conducted a nurse review of Plaintiff’s file claiming, in contravention to the medical records, that Plaintiff was no longer fatigued, her brain fog was improving, her headaches were less severe, and she was capable of doing more physically, noting that Plaintiff planned a trip to Singapore to visit her sister in August 2022. Reliance informed Plaintiff that it was unable to approve benefits beyond October 28, 2022. Plaintiff appealed, submitting additional medical records including a battery of cognitive tests documenting learning and memory issues, poor attention, impaired visuospatial skills, and worsening brain fog. Despite reviewing these records, after submitting Plaintiff’s medical file for two independent physician reviews and an occupation analysis review, Reliance upheld its decision on appeal. This lawsuit ensued.

Under the abuse of discretion standard, the Court found that while Reliance’s evaluation of Plaintiff’s physical and psychiatric capabilities was the result of a deliberate, principled reasoning process and was supported by substantial evidence, its reasoning process fell short with respect to Plaintiff’s cognitive capacity, and those findings were not supported by substantial evidence in that regard. The Court found that Reliance’s analysis and decision to terminate Plaintiff’s benefits contained a basic logical fallacy. The Court reasoned: sedentary occupations require a certain physical capacity, you are capable of meeting those physical requirements, your regular occupation is sedentary, therefore you can perform your occupation. However, the Court noted the problem in using that analysis, Reliance failed to consider the specific cognitive (not merely the physical) requirements of Plaintiff’s regular occupation. It noted that “sedentary occupations” run the gamut from jobs with very few cognitive requirements, which could be performed with someone who meets the physical capacity for sedentary work, to very extensive cognitive requirements, which can only be performed by a person with the appropriate physical plus cognitive capabilities. In this case, Plaintiff’s senior engineering position fell on the higher end of that wide range.

On appeal, the Court found that Reliance did not do much better, noting only that there was some reported improvement of symptoms and Plaintiff’s international travel for three weeks in August as evidence of sedentary functional capacity. The Court did not find these facts persuasive, particularly in light of medical reports noting only some improvement, but still indicating the presence of functionally impairing symptoms overall, and a later relapse in her condition. The Court further noted the mere act of traveling required very little cognitive capacity, and there was no evidence that Plaintiff undertook any activities overseas that might reflect any cognitive burden. The Court also noted that the peer reviews ordered by Reliance failed to acknowledge and/or downplayed the cognitive deficits documented by her treating providers.

Applying the Booth factors, the Court found that Reliance disregarded the plan language requiring it to fully evaluate Plaintiff’s ability to perform the material and substantial duties of her regular occupation and did not adequately consider the materials provided by Plaintiff in support of her claim. As to the cognitive limitations, the Court found that Reliance failed to engage with or reference ample evidence in the record of ongoing cognitive dysfunction, the objective testing, or prescribed medicines. It used peer reviewers with the wrong specialties and disregarded the repeated recommendation from one of its own peer reviewers that the claim needed to be reviewed by a neuropsychologist. Reliance’s repeated citation to Plaintiff’s Singapore trip undermined its reasoning and process. Finally, it found that Reliance’s review was inconsistent with the requirements of ERISA. The Court concluded that all other Booth factors were neutral, and based on the analysis of all factors remanded the matter back to Reliance to make the appropriate determinations in light of the Court’s decision.

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