Eleventh Circuit Affirms Long-Term Disability Denial Based on Coverage Lapse and Preexisting Condition Where Payroll Records Show Reduced Hours

In Tunkle v. Reliastar Life Insurance Company, No. 24-12563, 2026 WL 144606 (11th Cir. Jan. 20, 2026), the Eleventh Circuit affirmed summary judgment in favor of ReliaStar Life Insurance Company, holding that the insurer did not act arbitrarily and capriciously in denying long-term disability (“LTD”) benefits based on a lapse in coverage and the plan’s preexisting condition exclusion. The court emphasized that under deferential ERISA review, the relevant inquiry is whether the administrative record reasonably supported the administrator’s decision, not whether the record could also support a different outcome.

The claimant, a general surgeon employed by 21st Century Oncology, developed a disabling tremor that ultimately forced him to stop performing surgeries. He sought LTD benefits under his employer’s ERISA-governed group policy issued by ReliaStar. The policy limited coverage to employees in “active employment,” defined as working at least 30 hours per week, and provided that coverage would automatically terminate if the employee failed to meet that threshold, absent a covered leave of absence. The policy further excluded disabilities caused by a preexisting condition—defined as a condition for which the employee received treatment, consultation, or care within the three months preceding the effective date of coverage.

ReliaStar denied the claim after determining that the claimant’s hours dropped below 30 per week between mid-March and late May 2020, causing a lapse in coverage, and that he consulted a physician about his tremor during that lapse period. As a result, ReliaStar concluded that the tremor constituted a preexisting condition once coverage resumed and denied benefits.

On appeal, the Eleventh Circuit began its analysis by identifying the applicable standard of review. Because the plan granted ReliaStar discretionary authority to determine eligibility for benefits, the court applied the arbitrary-and-capricious standard. Under that framework, the court explained, the question is not whether the administrator’s decision was correct in an absolute sense, but whether the administrative record gave the administrator a reasonable basis for its decision at the time it was made.

Applying that deferential standard, the court focused heavily on the nature of the evidence contained in the administrative record. The court noted that the only contemporaneous documentation of the claimant’s hours during the relevant period consisted of payroll records and productivity reports. Both reflected substantially reduced work—well below the 30-hour weekly requirement—during the period when coverage allegedly lapsed. The payroll records showed only a few hours of paid work per week, while the productivity reports reflected limited patient appointments and surgical or consultative hours.

The claimant attempted to overcome this evidence by arguing that his reduced compensation did not reflect reduced hours and that he continued to work full time performing undocumented duties, including administrative work, call coverage, and other professional responsibilities not captured by the productivity report. He also submitted letters from himself and a colleague asserting that he worked well in excess of 30 hours per week and explaining that he voluntarily reduced his salary during the COVID-19 pandemic to help cover practice overhead.

The Eleventh Circuit rejected those arguments as insufficient to render ReliaStar’s decision unreasonable. Critically, the court emphasized that ERISA administrators are entitled to rely on contemporaneous, employer-generated records when evaluating eligibility for coverage. Here, the employer repeatedly confirmed to ReliaStar that the payroll records and productivity reports were the only records of the claimant’s hours and that it had no documentation supporting full-time work during the relevant period. The court held that these employer confirmations further strengthened the reasonableness of ReliaStar’s determination.

The court also addressed the claimant’s argument that the productivity report’s “total time” metric demonstrated full-time work. The court concluded that ReliaStar had a reasonable basis to interpret that metric as something other than actual hours worked, particularly where the claimant’s own representations and the employer’s communications treated recorded hours—not “total time”—as the operative measure of work activity.

Importantly, the court reiterated that the existence of contrary evidence in the record does not render an administrator’s decision arbitrary and capricious. Even if the record could have supported a finding that the claimant worked more than 30 hours per week, that was not the governing standard. So long as the record reasonably supported ReliaStar’s conclusion, the court was required to affirm.

Having found that ReliaStar reasonably concluded the claimant’s coverage lapsed, the court easily affirmed the application of the preexisting condition exclusion. The administrative record showed that the claimant consulted a physician about his tremor within three months before coverage resumed. Under the plan’s plain language, that consultation was sufficient to trigger the exclusion. The claimant did not meaningfully dispute that the tremor caused his disability if the coverage lapse determination was upheld.

Finally, the court noted that the claimant conceded ReliaStar was not operating under a structural conflict of interest, eliminating any need for heightened scrutiny. The court affirmed the district court’s judgment in full.