Third Circuit Affirms Standard Insurance Company’s Decision to Terminate Long-Term Disability Benefits under the “Any Occupation” Standard

In Brown v. Covestro LLC Welfare Benefits Plan, et al., No. 24-1043, 2024 WL 4751199 (3d Cir. Nov. 12, 2024), Plaintiff challenged the termination of his long-term disability benefits after Standard Insurance Company, his employer’s disability insurance company, determined that he was no longer totally disabled. Plaintiff claimed disability due to multiple diagnoses relating to back pain. The district court adopted the Magistrate Judge’s determination that “the denial of benefits did not constitute an abuse of discretion; that the plan administrator substantially complied with the applicable ERISA standards; and that to the extent the administrator erred, the denial was supported by substantial evidence, and remand would be futile.” Plaintiff appealed and in a non-precedential opinion, the Third Circuit affirmed.

On the standard of review, Plaintiff argued that two alleged procedural deficiencies in how Standard handled the termination of his benefits required the court to apply a de novo standard of review. He argued that the denial letter was deficient because it did not set forth the specific reasons for denial in a manner calculated to be understood by him. The court found that the denial letter stated that he did not meet the criteria for disability from “Any Occupation” and quoted the plan’s requirements, along with evidence that supported the decision. The court found that this was sufficient to comply with ERISA’s regulations. Second, Plaintiff argued that the Committee reviewing his appeal was required to disclose a supplemental report that it obtained while reviewing his appeal. The court explained that the Committee was not required to disclose the report prior to deciding Plaintiff’s appeal because it only analyzed information already known to Plaintiff and contained no new facts or diagnoses. “To the extent that the Committee did not disclose the additional report to Brown once it made its decision, its failure to do so was not a severe procedural violation.” Lastly, Plaintiff argued that the 2018 update to the ERISA regulations required application of de novo review because Defendants did not set forth the time in which Plaintiff was required to challenge its decision. The court found that this error did not compel the application of de novo review.

Applying the abuse of discretion review standard, the court found ample evidence supporting the determination that Plaintiff was not totally disabled. Defendants explained that a claimant is totally disabled if he cannot work at any job when taking into account whether reasonable accommodations are available. Plaintiff continued to work as a teacher. Defendants relied on evidence finding that Plaintiff would be able to sit for six hours a day in one-hour stretches and stand for two hours a day in 45-minute stretches. His need to take short breaks and up to three medical absences per month could be reasonably accommodated. For these reasons, the court affirmed the district court’s order granting summary judgment in favor of Defendants.