First Circuit Affirms Insurer’s Discretion in Terminating Long-Term Disability Benefits

In Bernitz v. USAble Life, No. 24-1598, —F.4th—-, 2025 WL 2463092 (1st Cir. Aug. 27, 2025), a dispute over the payment of long-term disability benefits, the First Circuit sided with USAble Life and upheld the insurer’s decision to terminate benefits after several years of payments. The court found that even though there was conflicting medical evidence, the insurer’s decision was reasonable and backed by substantial evidence, including surveillance and medical reviews. The case highlights how insurers may rely on evidence of lifestyle improvements to terminate benefits—and how difficult it can be for claimants to overcome the deferential “abuse of discretion” standard that applies under ERISA.

Plaintiff Bernitz, a Senior VP at Synta Pharmaceuticals, suffered from chronic back and hip pain and had multiple surgeries in his medical history. In 2014, he began receiving LTD benefits under his employer-sponsored plan, administered by USAble. For nearly five years, benefits flowed. But, according to the court, changes emerged in 2018–2019: Bernitz lost weight, reduced reliance on pain medication, worked out daily, traveled internationally, and was seen engaging in physically demanding activities. Surveillance ordered by USAble captured footage of him driving, exercising at the gym, and otherwise acting allegedly at odds with his reported limitations. USAble commissioned updated medical reviews, including from physicians who had previously supported disability, but who revised their opinions in light of new evidence. In December 2019, USAble terminated benefits. Bernitz appealed internally, submitting additional medical documentation—including letters from treating providers and a functional capacity evaluation—but USAble trusted its independent consultants. By 2023, after a final denial, Bernitz sued under ERISA. The district court granted summary judgment for USAble, and Bernitz appealed.

Since the plan afforded USAble discretionary authority to determine eligibility, the First Circuit applied the “arbitrary and capricious” standard: is the insurer’s decision reasoned and grounded in substantial evidence? Citing Dutkewych v. Standard Ins. Co., 781 F.3d 623, 633 (1st Cir. 2015), and Colby v. Union Sec. Ins. Co., 705 F.3d 58, 62 (1st Cir. 2013), the court emphasized that its role is limited to reviewing the rationale — not to reweigh evidence de novo.

Regarding the structural conflict of interest factor, the court acknowledged USAble’s structural conflict—it both paid and decided the claim. But, drawing from Metropolitan Life Ins. Co. v. Glenn, 554 U.S. 105 (2008), it found the conflict “deserved little weight” because USAble took meaningful steps to mitigate it: independent medical reviews, separation of appeals personnel, and continuation of benefits pending appeal. There was no indication of biased claims handling in the process.

The plan’s disability definition required that an insured be unable to perform at least one “material duty” of their occupation. USAble’s vocational analysis identified duties such as sitting, typing, standing, walking, and occasional travel. Bernitz’s documented activities—international travel, daily workouts, gym sessions—suggested he could perform those duties. The court deemed USAble’s interpretation reasonable.

ERISA requires that an administrator sufficiently explain disagreements with treating provider opinions (29 C.F.R. § 2560.503-1(j)(6)). USAble did so: its denial letters referenced the treating providers’ views but contrasted them with surveillance, improved functionality, and contrary independent reviews. The court found this consistent with the regulatory requirement and satisfactory under ERISA.

Even though the record contained conflicting medical opinions, the court’s task was not to pick a winner, but to determine if USAble’s decision rested on substantial evidence—a “reasoned” and “supported” basis. Given the lifestyle evidence and medical review contrary to total disability, the court found that USAble met that burden. For these reasons, the First Circuit affirmed the decision of the district court.