Ninth Circuit Reverses Hartford Win and Requires District Court to Consider New Evidence in Long-Term Disability Dispute

In Kay v. Hartford Life and Accident Insurance Company, No. 21-55463, 2022 WL 4363444 (9th Cir. Sept. 21, 2022) (9th Cir. Sept. 21, 2022), a short unpublished memorandum opinion, the Ninth Circuit reversed and remanded the district court’s grant of judgment to Hartford Life and Accident Insurance Company in a dispute over the payment of ERISA-governed long-term disability benefits.

Plaintiff-Appellant Anne Kay worked as a Clinical Specialist for Candela Corporation before she became disabled from her job due to back pain. Hartford insured Candela’s long-term disability plan and initially approved Kay’s claim for benefits. As a Clinical Specialist for Candela, Kay was required to travel up to 80% of the time, work over 40 hours per week, and move equipment that weighed upwards of 270 pounds. In less than one year, Hartford terminated Kay’s benefits, finding that she was not disabled from the essential functions of her occupation, which included sales support and travel, the ability to sit or stand for up to 8 hours, push or pull up to 270 pounds, lift 25 pounds, and carry 20 pounds. Kay appealed this denial and when Hartford rendered its final determination, it relied on an occupational report, which included a new definition of Kay’s occupation, and a medical report from an independent physician who concluded that Kay was not disabled. The new definition of Kay’s occupation was based on a combination of DOT occupational titles that excluded the travel and lifting requirements of Kay’s job. Kay did not have the opportunity to respond to this new evidence before Hartford issued its final appeal. The district court denied Kay’s motion to augment the record to respond to this new evidence, and then granted judgment to Hartford.

On appeal, the Ninth Circuit determined that the district court abused its discretion by denying Kay’s motion to augment the record. Relying on Abatie v. Alta Health & Life Ins. Co., 458 F.3d 955 (9th Cir. 2006), the court explained that when an administrator tacks on a new reason for denying benefits in a final decision, additional evidence is necessary to afford a participant a “full and fair review” as required by ERISA. By denying Kay’s motion to augment, the district court insulated the insurer’s decision from a full and fair review.

The court also determined that both Hartford and the district court erred by re-defining Kay’s own occupation to omit the 80% travel and 270-pound lifting requirements that formed the basis of her disability claim. Even though the Hartford policy defines occupation to include the employee’s job as it is recognized in the general workplace, and not the specific job that the employee was performing for a specific employer, Hartford was still required to analyze what Kay actually did before it determined the essential duties of her occupation. Hartford’s occupational specialist matched DOT titles to generic job descriptions from Indeed.com and did not select DOT titles that approximated Kay’s actual responsibilities with Candela. Because it found that the district court erred by adopting this new definition of Kay’s occupation, the court did not address the remaining issues in the appeal.