Federal Court Upholds Unum’s Termination of Disability Benefits Based on International Residency Clause

In a decision that underscores ERISA’s commitment to enforcing the written terms of benefit plans—even in extraordinary times like the COVID-19 pandemic—a federal court has upheld Unum Life Insurance Company of America’s termination of long-term disability (LTD) benefits based on the plan participant’s extended residence in Mexico. The case, Archer v. Unum Life Insurance Co. of America, No. 2:23-CV-01128-LK, 2025 WL 2107491 (W.D. Wash. July 28, 2025), also illustrates the high bar plaintiffs face when seeking equitable relief for alleged breaches of fiduciary duty under ERISA Section 502(a)(3).

Background: International Residency and LTD Eligibility

P. Archer, a former nurse suffering from PTSD and chronic medical conditions, had been receiving LTD benefits from Unum since 2013 under a policy issued through her employer, Providence Health & Services. Her eligibility extended through September 2026 barring any disqualifying events.

However, the LTD policy included a key limitation: Unum would stop benefit payments after 12 months if the claimant was deemed to reside outside the U.S. or Canada. Residency outside these jurisdictions was defined as being abroad for six months or more during any 12-month period of benefits.

In 2020, Archer disclosed to Unum that she had been living in Mexico since October 2019, except for a brief five-day trip to Phoenix in January 2020. She explained that her move was motivated by health-related reasons and that she had intended to return quarterly to the U.S. for care at a VA facility, but the COVID-19 pandemic disrupted those plans. Unum subsequently suspended and then terminated her benefits in 2022, asserting that she had violated the policy’s international residency provision and seeking reimbursement of over $62,000 in overpaid benefits.

Plaintiff’s Claims Under ERISA

Archer filed suit under ERISA Section 502(a)(1)(B), seeking reinstatement of benefits, and also under Section 502(a)(3), alleging that Unum breached fiduciary duties by failing to inform her of the residency provision. She did not dispute that she remained in Mexico for more than six months during a 12-month period, but argued that pandemic-related travel restrictions made compliance with the policy provision impossible. She also alleged that Unum applied the residency clause inconsistently, reinstating benefits for at least one other similarly situated claimant during the pandemic.

De Novo Review and Enforcing the Plan as Written

The district court reviewed the case de novo, as Washington law voids discretionary clauses in disability insurance policies. Under this standard, the court independently evaluated whether Unum’s denial of benefits was correct under the terms of the plan.

The court found that the plan’s language was unambiguous: a beneficiary is deemed to reside outside the U.S. or Canada if they spend six or more months abroad during any 12-month benefit period. Archer’s own statements confirmed that she had been in Mexico continuously from October 2019 through at least mid-2020, well past the permitted six-month threshold. Despite her arguments about pandemic travel barriers, the court held that U.S. citizens like Archer were exempt from border restrictions and that her failure to return to the U.S. was not legally excused under an “impossibility” theory.

No Equitable Waiver and No Fiduciary Breach

The court also rejected Archer’s arguments for equitable relief. She had claimed that Unum breached its fiduciary duty by failing to warn her about the out-of-country limitation. However, the court emphasized that ERISA does not impose a freestanding duty on fiduciaries to proactively notify participants of every applicable plan limitation. Moreover, Archer had constructive notice of the policy’s terms through the plan documents, which clearly set forth the residency clause in plain language.

Even assuming that Archer was unaware of the clause until 2020, she had already triggered the ineligibility provision by that point. Thus, any failure to warn was moot. The court also found no evidence that Unum’s enforcement of the clause in Archer’s case was inconsistent with its application to other claimants. The mere fact that a different claimant may have received more favorable treatment under a different plan was not enough to establish arbitrary or capricious conduct.

Enforcement Delay Did Not Excuse Breach

The court also declined to infer bad faith from Unum’s delay in enforcing the clause. Although Archer disclosed her residency in October 2020, Unum did not terminate her benefits until April 2022. Archer argued that this delay showed Unum’s ambivalence or waived enforcement. But the court held that delay alone is not a basis to revive eligibility under ERISA, especially where the policy clearly empowered Unum to recover overpayments stemming from administrative error or ineligibility.

Implications and Next Steps

The court denied Archer’s motion for judgment on the record and granted Unum’s cross-motion, affirming the denial of ongoing LTD benefits. However, it declined to rule immediately on Unum’s overpayment counterclaim, instead ordering supplemental briefing to resolve potential ambiguities in how the policy’s timing language applies to benefit cessation.

This case reinforces several core principles of ERISA litigation: the primacy of plan terms, the limited scope of fiduciary duty in absence of misrepresentation or concealment, and the challenges of obtaining equitable relief. Even in the face of a global pandemic, courts remain reluctant to rewrite or excuse noncompliance with the written terms of ERISA-governed policies.