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April 16, 2015

ERISA-First Circuit Upholds Termination Of Disability Benefits Due To A 24 Month Limitation In The Plan For Disabilities Relating To Mental Health Conditions

In Dutkewych v. Standard Insurance Company, No. 14-1450 (1st Cir. 2015), the First Circuit Court of Appeals (the "Court") faced the following matter. Plaintiff Mark Dutkewych is a participant in a disability plan (the "Plan"), insured and administered by Defendant Standard Insurance Company under ERISA. The Plan limits long-term disability ("LTD") benefits to 24 months for "a Disability caused or contributed to by . . .: (1) Mental Disorders; (2) Substance Abuse; or (3) Other Limited Conditions." Applying this Limited Conditions Provision, Standard terminated Dutkewych's benefits after 24 months, on June 1, 2011. After Dutkewych's administrative appeal failed, he brought this lawsuit against Standard for unpaid benefits. The district court entered summary judgment against Dutkewych's claims, and Dutkewych appealed.

In reviewing the case, the Court said that Dutkewych contests Standard's decision to limit his LTD benefits to 24 months, saying he has been diagnosed with chronic Lyme disease, "a physical illness that is not limited under the terms of the Plan." Despite the hot dispute between the parties on this issue, this case does not turn on the insurer's doubts about the validity of Dutkewych's diagnosis with chronic Lyme disease. Instead, this case turns on the insurer's application of a different provision of the Plan, the subset of the Limited Conditions Provision related to mental disorders ("Mental Disorder Limitation").Standard maintains that, even if Dutkewych was disabled as a result of chronic Lyme disease in June 2011, the Mental Disorder Limitation nonetheless applies because his mental disorders, regardless of their cause, contributed to his disability as of June 2011. The Court ruled that Standard's interpretation of the Mental Disorder Limitation is reasonable and its application to Dutkewych's case is supported by substantial evidence. Accordingly, the Court affirmed the entry of summary judgment to Standard.

April 15, 2015

ERISA-DOL Proposes New Rule Defining A Fiduciary For Certain Purposes of ERISA And Providing Guidance On A Fiduciary's Conflict of Interest.

The U.S. Department of Labor (the "DOL") has issued a new proposed rule providing a new definition of fiduciary for certain ERISA purposes and pertaining to an ERISA fiduciary's conflict of interest. Here is what the DOL about the proposed rule:

This proposal contains a proposed regulation defining who is a "fiduciary" of an employee benefit plan under ERISA as a result of giving investment advice to a plan or its participants or beneficiaries. The proposal also applies to the definition of a "fiduciary" of a plan (including an individual retirement account (IRA)) under section 4975 of the Internal Revenue Code of 1986 (the "Code"). If adopted, the proposal would treat persons who provide investment advice or recommendations to an employee benefit plan, plan fiduciary, plan participant or beneficiary, IRA, or IRA owner as fiduciaries under ERISA and the Code in a wider array of advice relationships than the existing ERISA and Code regulations, which would be replaced. The proposed rule, and related exemptions, would increase consumer protection for plan sponsors, fiduciaries, participants, beneficiaries and IRA owners.

This proposal also withdraws a prior proposed regulation published in 2010 (2010 Proposal) concerning this same subject matter. In connection with this proposal, elsewhere in the same issue of the Federal Register, the DOL is proposing new exemptions and amendments to existing exemptions from the prohibited transaction rules applicable to fiduciaries under ERISA and the Code that would allow certain broker-dealers, insurance agents and others that act as investment advice fiduciaries to continue to receive a variety of common forms of compensation that otherwise would be prohibited as conflicts of interest.

March 30, 2015

ERISA- Fifth Circuit Holds That An Out-Of-Network Hospital Has Standing To Sue A Health Plan Under ERISA For Unpaid Benefits, When Plan Participants Assigned To The Hospital Their Right To Benefits From The Plan

In North Cypress Medical Center Operating Company, Limited v. Cigna Healthcare, No. 12-20695 (5th Cir. 2015), the Fifth Circuit Court of Appeals (the "Court") ruled that an out-of-network hospital has standing-as a matter of both the constitutional minimum standing requirement and statutory standing needed under ERISA-to sue a health plan for payment of benefits, when plan participants had expressly assigned to the hospital their right to benefits from the plan.

In so ruling, the Court took into account the fact that hospital patients covered by a health plan generally assign their claims to the hospital in the admissions process well before their presentment to the plan's insurer or administrator. The Court then looks to the rights of the patient at the time of assignment. The fact that the patient assigned her rights elsewhere does not cause them to disappear. Further, as a fact to be taken into account, a patient suffers a concrete injury if money that she is allegedly owed contractually is not paid, regardless of whether she has directed the money be paid to a third party for her convenience. The patients contracted for coverage at out-of-network providers under their health plans. The patients allegedly incurred charges for medical care, and directed that the payments be made to the provider, but, here, the contracted-for payments have not been made. The patients have thus allegedly been deprived of what they contracted for, a concrete injury.

March 24, 2015

ERISA-Third Circuit Rules That Company's Erroneous Interpretation Of A Plan, Which Results In A Denial Of Benefits, Violated ERISA's Anti-Cutback Rule

In Cottillion v. United Refining Company, Nos. 13-4633 & 13-4743 (3rd Cir. 2015), the Third Circuit Court of Appeals (the "Court") was called on the apply ERISA's anti-cutback rule, under which an amendment may not reduce a plan benefit.

In this case, John Cottillion worked at United Refining Company (the "Company") for 29 years. He was age 54 when he quit, and his benefits under the Company's retirement plan (the "Plan") had vested. When Cotillion quit, the Company wrote him a letter, informing him that he may elect to have his monthly retirement benefit from the Plan begin at any time after the month in which Cottillion would turn 60, and that his monthly retirement benefit will be $573.70 at age 60. The letter did not state that the amount of Cottillion's benefit depended on whether he elected to receive it at age 60 or later, or that the benefit would otherwise be reduced if payment started before age 65. Payment of Cottillion's pension benefit commenced before he reached age 65, without a full actuarial reduction. Later, claiming that the failure to apply a full actuarial reduction is an error, the Company attempted to cancel Cottillion's monthly pension payments, then $506.58, and recoup from Cottillion the purportedly excess payments, in the amount of $14,475. This suit commenced, with Cottillion challenging the Company's attempted actions. The district court held that these actions would violate ERISA's anti-cutback rule, 29 U.S.C. 1054(g).

In analyzing the case, the Court said (among other things) that the Company action complained of is based on an erroneous interpretation of the Plan, and that an erroneous interpretation of a plan provision that results in the improper denial of benefits to a plan participant-which occurred in this case- may be construed as an "amendment" for the purposes of the anti-cutback rule. The Court summarized its findings by saying that the Company provided a detailed pension plan that clearly explained how to calculate payments owed to those who, like Cottillion, earned accrued benefits and left employment before he was eligible to receive them. The pension plans' method of calculation did not include an actuarial adjustment for participants who took benefits before turning 65, and ERISA forbids the Company from drafting those reductions into the Plans whether by amendment, interpretation, or otherwise. The Company must pay the employees what it promised, and thus the district court holding is affirmed.

March 10, 2015

ERISA-Sixth Circuit Rules That Disgorgement Of Profits Is Not An Available Remedy Against A Fiduciary For Wrongful Denial Of Benefits, When The Plaintiff Had Already Recovered The Full Amount Of The Benefits

In Rochow v. Life Ins. Co. of N. Am., 2015 U.S. App. LEXIS 3532 (6th Cir. 2015), the Sixth Circuit Court of Appeals (the Court) was asked to review the district court's order requiring Life Insurance Company of North America ("LINA") to disgorge profits obtained from its wrongful denial of long-term disability ("LTD") benefits.

In this case, the late Daniel J. Rochow ("Rochow"), an employee of Arthur J. Gallagher & Co. ("Gallagher"), was covered under a LINA policy of insurance providing LTD benefits. Rochow developed a condition known as HSV-Encephalitis, a rare and severely debilitating brain infection, and was forced to resign from Gallagher. Rochow then filed a claim for LTD benefits under the policy with LINA. LINA denied Rochow benefits, stating that Rochow's employment ended before his disability began. Rochow subsequently filed this suit. The case reached the Court, which decided the LINA's denial of the LTD claim was a breach of fiduciary duty under ERISA, since the denial was arbitrary and capricious, was not the result of a deliberate, principled reasoning process, and did not appear to have been made solely in the interest of the participants and beneficiaries and for the exclusive purpose of providing benefits to participants and their beneficiaries' as required by ERISA. As a result of this finding that a breach of fiduciary duty had occurred, the plaintiff (suing in the late Rochow's place) recovered the LTD benefit denied under ERISA section 502(a)(1)(B). The issue then arose as to whether the plaintiff was also entitled to a disgorgement of profits due to the Court's ruling. A district court had ruled that the plaintiff was so entitled.

In analyzing the case, the Court said that there is essentially one issue before us: is the plaintiff entitled to recover under both ERISA section 502(a)(1)(B) and 502(a)(3) for LINA's breach of fiduciary duty stemming from its arbitrary and capricious denial of LTD benefits, given plaintiff's recovery of the LTD benefits? Section 502(a)(3) makes "appropriate equitable relief" available to redress violations such as a breach of fiduciary duty. The Court concluded that, in this case, the disgorgement relief was not available, since--absent a showing that the the 502(a)(1)(B) remedy is inadequate (and no such showing here)--granting this relief would result in an impermissible duplicative recovery. Accordingly, the Court overturned the district court's ruling, and remanded the case back to the district court to determine if the plaintiff is entitled to prejudgment interest on the benefits recovered.

March 4, 2015

ERISA-Seventh Circuit Holds That Defendant May Not Be Responsible For Withdrawal Liability

In Hotel 71 Mezz Lender LLC v. The National Retirement Fund, No. 14-2034 (7th Cir. 2015), the National Retirement Fund ("NRF") and its trustees sought to hold Hotel 71 Mezz Lender LLC ("Mezz Lender") and Oaktree Capital Management, L.P. ("Oaktree") responsible for multiemployer pension fund withdrawal liability pursuant to section 4201 of ERISA.

In this case, Oaktree, through Mezz Lender, provided financing for the acquisition of a hotel by Chicago H&S Hotel Property LLC ("H&S"). When H&S later defaulted on the loan, it was taken into bankruptcy and the hotel was sold. NRF is a multiemployer pension plan to which H &S had been making employer contributions for the hotel employees under a collective bargaining agreement. NRF contends that the sale of the hotel triggered withdrawal liability to NRF on the part of H&S and any other "trade or business" under common control with it--including both Oaktree and Mezz Lender (together, the "Oaktree parties"). One issue for the Seventh Circuit Court of Appeals (the "Court")-do the Oaktree parties have any responsibility for the withdrawal liability? The Oaktree parties had come under common control with H &S, so the remaining question was whether they conducted a "trade or business".

In analyzing the case, the Court concluded that there was uncertainty and an absence of evidence as to whether the Oaktree parties were engaged in a "trade or business". As such, the Court could not determine whether the Oaktree parties could have responsibility for the withdrawal liability. Consequently, the Court remanded the case back to the district court to make this determination.

March 3, 2015

ERISA-10th Circuit Rules That There Are No Vested Health or Life Insurance Benefits

In Fulghum v. Embarq Corporation, No. 13-3230 (10th Cir. 2015), the Plaintiffs represented a class of retirees formerly employed by Sprint-Nextel Corporation ("Sprint"), Embarq Corporation("Embarq"), or a predecessor and/or subsidiary company of either Embarq or Sprint (collectively "Defendants"). Plaintiffs brought this suit after Defendants altered or eliminated health and life insurance benefits for retirees. Plaintiffs asserted, among others, that Defendants violated ERISA by breaching their contractual obligation to provide vested health and life insurance benefits. The district court granted Defendants summary judgment on this claim, and Plaintiffs appeal.

In analyzing the case, the Tenth Circuit Court of Appeals (the "Court") noted that the plans at issue provide health or life insurance benefits and, thus, are welfare benefit plans under ERISA. Welfare benefit plans are not governed by ERISA's minimum vesting standards and employers are generally free under ERISA, for any reason at any time, to adopt, modify, or terminate welfare plans. If, however, an employer has contractually agreed to provide retirees with vested benefits, it may not unilaterally modify or terminate the welfare benefit plan that establishes those benefits. Further, the interpretation of an ERISA plan is governed by federal common law. The Court said that, in deciding whether an ERISA employee welfare benefit plan provides for vested benefits, it will apply general principles of contract construction. In particular, the Court will interpret an ERISA plan like any contract, by examining its language and determining the intent of the parties to the contract. A plaintiff cannot prove his employer promised vested benefits unless he identifies "clear and express language" in the plan making such a promise. Further, a promise to provide vested benefits must be incorporated into the formal written ERISA plan. Summary plan descriptions ("SPDs") are considered part of the ERISA plan documents.

Continuing, the Court said that, having reviewed the SPDs at issue in this matter, the Court concludes Plaintiffs cannot show that any plan contains clear and express language promising vested benefits. The SPDs presented either contained a reservation of rights clause, under which the employer could change or discontinue the benefits at any time, and/or had no clear and express or affirmative promise under which benefits will vest. As a result of the foregoing, the employer may change or stop the health and life insurance benefits in any manner and at

February 9, 2015

ERISA-Ninth Circuit Remands Case Back To District Court To Consider Whether Plaintiff Is Entitled To The Remedy of Surcharge

In Gabriel v. Alaska Electrical Pension Fund, No. 12-35458 (9th Cir. 2014), plaintiff Gregory R. Gabriel appeals the district court's dismissal of his claims against the defendant Alaska Electrical Pension Fund (the "Fund") and other defendants under ERISA. In this case, the Ninth Circuit Court of Appeals (the "Court") affirmed the district court's determination that Gabriel failed to raise a genuine issue of material fact as to his entitlement to "appropriate equitable relief" under § 502(a)(3) of ERISA, in the form of equitable estoppel or reformation.

However, Court said that, because the district court made its ruling prior to the Supreme Court's decision in CIGNA Corp. v. Amara, the district court did not consider the availability of the monetary remedy against a trustee, sometimes called a surcharge, which the Court held may be "appropriate equitable relief" for purposes of § 502 (a)(3) of ERISA. Accordingly, the Court vacated the district court's ruling that Gabriel is not entitled to any form of "appropriate equitable relief" and remanded the case for the district court to reconsider the availability of surcharge in this case, and, if available, whether Gabriel has adequately alleged a remediable wrong.

February 5, 2015

ERISA-D.C. Court Of Appeals Holds That State Law Cannot Be Applied To Obtain Undistributed Plan Benefits

In Vanderkam v. Vanderkam, No. 13-5163 (D.C. Columbia 2015), the D.C. Circuit Court of Appeals (the "Court") began the case by noting that ERISA entitles certain spouses of pension plan participants to a survivor annuity unless waived pursuant to clearly defined procedures. In this case, the pension plan participant concedes that ERISA vested an annuity in his ex-wife, but nonetheless argues that Texas law, including his Texas divorce decree, requires entry now of a declaratory judgment that, after his death, she place her annuity payments into a constructive trust for his benefit. The district court rejected this claim, holding that ERISA preempts any state law or state-court decree that would otherwise defeat the spouse's vested annuity. The Court affirmed.

In so affirming, the Court said that it emphasized the narrowness of its opinion. The Court said that this case involves an effort by a plan participant to obtain an interest in undistributed plan benefits, and we hold only that absent a qualified domestic relations order and compliance with ERISA's strict waiver provisions for survivor annuities, he may not use state law for that purpose. This opinion has nothing to say about how ERISA might affect an effort by a plan participant to use state law to obtain an interest in benefits after distribution to the beneficiary. That question is not presented in this case, and the Court expresses no opinion on it.

January 29, 2015

ERISA-Supreme Court Rules That There Is No Presumption That Retiree Health Benefits Are Vested

In M & G Polymers USA, LLC v. Tackett, No. 13-1010 (U.S. Supreme Court 2015), the Supreme Court overturned the long standing "Yard-Man" inference of the Sixth Circuit Court of Appeals that retiree health benefits created under a collective bargaining agreement are vested.

In this case, when petitioner M&G Polymers USA, LLC ("M&G") purchased the Point Pleasant Polyester Plant in 2000, it entered a collective bargaining agreement and related Pension, Insurance, and Service Award Agreement (the "P & I Agreement") with the local union. The P & I Agreement provided that certain retirees, along with their surviving spouses and dependents, would "receive a full Company contribution towards the cost of [health care] benefits"; that such benefits would be provided "for the duration of [the] Agreement"; and that the agreement would be subject to renegotiation in three years. Following the expiration of those agreements, M&G announced that it would require retirees to contribute to the cost of their health care benefits. The retirees then sued M&G and related entities, alleging that the P & I Agreement created a vested right to lifetime contribution free health care benefits. The District Court dismissed the complaint for failure to state a claim, but the Sixth Circuit reversed based on the reasoning of its earlier decision in the Yard-Man case. On remand, the District Court ruled in favor of the retirees, and the Sixth Circuit affirmed.

Upon reviewing the case, the Supreme Court held that the Sixth Circuit's decision rested on principles that are incompatible with ordinary principles of contract law. ERISA governs pension and welfare benefits plans, including those established by collective-bargaining agreements. ERISA establishes minimum funding and vesting standards for pension plans, but welfare benefits plans--which provide the types of benefits at issue here--are exempt from those rules. The Supreme Court said that it interprets collective-bargaining agreements, including those establishing ERISA plans, according to ordinary principles of contract law, at least when those principles are not inconsistent with federal labor policy. When a collective-bargaining agreement is unambiguous, its meaning must be ascertained in accordance with its plainly expressed intent.

Continuing, the Supreme Court found a number of deficiencies in Yard-Man and subsequent cases expanding it. These deficiencies include that the Sixth Circuit failed to consider traditional contract principles, including the rule that courts should not construe ambiguous writings to create lifetime promises and the rule that contractual obligations will cease, in the ordinary course, upon termination of the bargaining agreement.The Supreme Court concluded by that that, although there is no doubt that Yard-Man and subsequent cases affected the outcome here, the Sixth Circuit should be the first to review the agreements under ordinary principles of contract law. As such, the Supreme Court vacated the Sixth Circuit's affirmation and remanded the case.

January 22, 2015

ERISA-Fifth Circuit Rules That Investment Guidelines Are Not "Other Instruments" Which Participants May Request Under ERISA Section 104(b)

The case of Murphy v. Verizon Communications, Inc., No. 13-11117 (5th Cir. 2014), arose out of the spin-off of Verizon Communication, Inc.'s information services unit into a new corporation called Idearc, Inc., which subsequently evolved into SuperMedia, Inc. Several retirees, whose pension benefits were transferred from Verizon pension plans to Idearc pension plans as part of the spin-off, brought a class action suit against defendants-Verizon and the Verizon, Idearc (and later the SuperMedia) pension plans, asserting a variety of claims under ERISA. One such claim stemmed from the defendants' alleged failure to turn over certain documents and disclose certain information to the plaintiffs.

As to these allegations, the Fifth Circuit Court of Appeals (the "Court") noted that the documents sought were investment guidelines for the plans at issue. It said that, under ERISA Section 104(b)(4), plan administrators must, "upon written request of any participant or beneficiary, furnish a copy of the latest updated summary[] plan description, and the latest annual report, any terminal report, the bargaining agreement, trust agreement, contract, or other instruments under which the plan is established or operated." 29 U.S.C. § 1024(b)(4). If a plan administrator fails to comply with this requirement, the district court has discretion to impose a penalty of up to $110 per day. 29 U.S.C. § 1132(c)(1)(B); 29 C.F.R. § 2575.502c-1.

The Court then said that it agrees with the majority of the circuit courts, which have construed Section 104(b)(4)'s catch-all "other instruments" provision narrowly so as to apply only to formal legal documents that govern a plan. Such a construction is consistent with the plain meaning of the term "instrument," i.e., "[a] written legal document that defines rights, duties, entitlements, or liabilities, such as a statute, contract, will, promissory note, or share certificate." (quoting several dictionaries). In this case, the Court concluded that the investment guidelines do not constitute "other instruments" under Section 104(b)(4), as they are not binding on the plans at issue here, and they do not define any rights, duties, entitlements, or liabilities.

January 20, 2015

ERISA-Eighth Circuit Holds That Plaintiff Was Not Entitled To Statutory Damages For Her Employer's Failure To Provide Her With Notification Of COBRA Entitlement

In Cole v. Trinity Health Corporation, No. 14-1408 (8th Cir. 2014), the following obtained. When plaintiff Bonnie Cole stopped working for defendant Trinity Health Corporation ("Trinity Health"), the company failed to timely notify Cole of their right to COBRA continuing health care coverage, as it was required to do. Cole filed this suit, seeking statutory damages, which may be awarded in the court's discretion after a violation of this notification requirement. However, the district court declined to award damages and granted summary judgment to Trinity Health.

The Eighth Circuit Court of Appeals (the "Court") was asked to decide whether the district court's decision was in error. The Court found no abuse of discretion in the district court's denial of statutory damages and therefore it affirmed the grant of summary judgment. The Court noted that, in this case, there is no dispute that Trinity Health violated the COBRA notification requirement. The question before the Court, then, is whether the district court erred in declining to assess statutory damages. Since the decision to assess these damages is left to the discretion of the district court, the Court will review that decision for abuse of discretion.

The district court had reasoned that Cole was not entitled to actual damages because the amount of her unreimbursed medical bills from May 2012 was less than the COBRA premiums she would have had to pay to maintain medical insurance. The district court also reasoned that Cole was not entitled to statutory penalties because "Trinity Health acted in good faith," "[Cole was] not harmed or prejudiced by Trinity Health's tardy notice of ...COBRA rights," and "[Cole was] provided continued medical coverage for approximately eleven months after [her] termination.". The Court found that the district court's denial of statutory damages on the foregoing grounds did not involve any clearly erroneous findings and was not otherwise an abuse of discretion.

January 14, 2015

ERISA-Fourth Circuit Overturns District Court's Denial Of Claim For Short Term Disability Benefits, And Sends The Case Back To Plan Administrator For Further Review

In Harrison v. Wells Fargo Bank, N.A., No. 13-2379 (4th Cir. 2014), plaintiff Nancy Harrison brought suit against her employer Wells Fargo, arguing that the company improperly terminated her short-term disability benefits while she was undergoing a series of treatments for thyroid disease. The district court upheld Wells Fargo's decision, finding that it, as the plan administrator, did not abuse its discretion in denying Harrison's claim.

However, the Eleventh Circuit Court of Appeals (the "Court") analyzed the case and said that Wells Fargo failed to consider readily available material evidence of which it was put on notice (i.e., evidence that Harrision was seeking treatment for mental health conditions and certain properly signed release forms from Harrison evidencing the disability), and to inform Harrison in clear terms that her own doctor's records could establish her claim. Therefore, the Wells Fargo review process failed to conform to the directives of ERISA (requiring, among other things, a full and fair review and a deliberate, principled reasoning process which supports its decision with substantial evidence) and the Plan's own terms. As such, the Court reversed the district court's decision, and remanded the case back to the district court, with directions to return the case to Wells Fargo, as plan administrator, for a full and fair review of Harrison's claims.

January 13, 2015

Employee Benefits-Seventh Circuit Finds That The Plan Did Not Have A Partial Termination

In Matz v. Household International Tax Reduction Investment Plan, Nos. 14‐1683, 14‐2507 (7th Cir. 2014), the Seventh Circuit Court of Appeals (the "Court") reviewed a claim that a defined‐contribution ERISA pension plan, in which the employer matched contributions that its employees made, was partially terminated.

In analyzing the case, the Court said that, when a pension plan is terminated, the rights of the participants in the plan vest in full, and so none of the money contributed by the employer to the individual employees' retirement accounts is returned to the employer. Full vesting is required in the case of partial as well as total terminations. 26 U.S.C. § 411(d)(3)(A); 26 C.F.R. § 1.401‐6(b)(2). But did a partial termination occur here? The Court had previously adopted a rebuttable presumption that a 20 percent or greater reduction in plan participants is a partial termination, and that a smaller reduction is not. The Court assumes that there is a band around 20 percent. A generous band would run from 10 percent to 40 percent. Below 10 percent, the reduction in coverage should be conclusively presumed not to be a partial termination; above 40 percent, it should be conclusively presumed to be a partial termination.

The Court concluded that there was no partial termination in this case. The Court said that, even if all the participant plan terminations were deemed to constitute a single event and therefore needed to be aggregated, the percentage of participants terminated would be only 17 percent, still below the 20 percent cutoff and with no justification shown for waiving this threshold and finding that a partial termination had occurred.

January 6, 2015

ERISA-Eighth Circuit Upholds Administrator's Denial Of Claim For Long-Term Disability Benefits.

In Johnson v. United of Omaha Life Insurance Company, No. 13-2645 (8th Cir. 2014), United of Omaha Life Insurance Company ("United") is appealing the district court's grant of summary judgment to Vicki Johnson ("Johnson") in her action filed under ERISA seeking reversal of United's denial of her claim long-term disability benefits.

In this case, from May 1995 until February 2009, Johnson worked for Colorado Real Estate and Investment Company, where she was covered under the employer's disability insurance policy (the "Plan"). United was the benefits administrator for the Plan. On February 26, 2009, the day she resigned, Johnson visited Dr. Cheryl MacDonald, her primary care physician. Dr. MacDonald took Johnson's blood pressure and diagnosed Johnson with: (1) anxiety and depression and (2) fibromyalgia and chronic pain. In October 2009, Johnson filed a claim for long-term disability benefits based on the foregoing medical conditions. United denied the claim, and Johnson filed this suit.

The issue for the Eighth Circuit Court of Appeals (the "Court") is whether United's decision to deny Johnson's claim for long-term disability should be upheld. The first question is what level of review-de novo or deference-is appropriate here. Here, the official Plan document was silent on the plan administrator's discretion to determine benefit eligibility, warranting a de novo review, but the summary plan description (the "SPD") provided the plan administrator with this discretion, supporting a deferential review. The Court felt that these two documents had to be reconciled, based on what a reasonable employee would conclude is the administrator's authority. The face of the Plan in this case states, "[t]he Certificate of Insurance . . . is made a part of the Policy." The SPD was included in the Certificate of Insurance as the final part of the consecutively-paginated booklet. Also, the SPD states on its face that "[t]his Certificate is Your ERISA Summary Plan Description for the insurance benefits described herein." Thus, a reasonable participant would understand that the policy had integrated the Certificate of Insurance along with the included SPD into the policy itself. The SPD contains a clause granting to United "the discretion and the final authority to construe and interpret the Policy," including "the authority to decide all questions of eligibility." Accordingly, the Court concluded that, under the needed reconciliation of the Plan document and the SPD, discretion was granted to United to determine eligibility for benefits, thereby resulting in United having the requisite authority to receive a deferential review.

Under a deferential review, United's decision to deny the claim for long-term disability benefits will be overturned only United has committed an abuse of discretion. The Court found that this decision was based on substantial evidence, so that there was no such abuse. The substantial evidence included an absence of objective evidence of any medical condition resulting in disability. As such, the Court concluded that United's decision to deny the claim for long-term disability benefits must be upheld.