In Carrow v. Standard Insurance Company, No. 10-3206 (8th Cir. 2012), the plaintiff, Don Carrow (“Carrow”), was appealing the district court’s grant of summary judgment to the defendant, Standard Insurance Company (“Standard”), in his claim for disability benefits under ERISA.
In this case, Carrow had been covered under his employer’s long-term disability plan (the “Plan”). Standard was the insurer and plan administrator of the Plan. The Plan defines “disability” as being disabled from the claimant’s “own occupation” (for the first twenty-four months of benefits) and thereafter, being disabled from “any occupation” for which the claimant is “reasonably fitted by education, training, and experience.” The Plan gives Standard full discretion to construe terms and make eligibility determinations. Due to various medical problems, primarily with his hip, knees and spine, Carrow was awarded long-term disability (“LTD”) benefits under the Plan. Carrow was also awarded disability benefits by the Social Security Administration (the “SSA”). After twenty-four months of disability, Standard terminated the LTD benefits, on the grounds that Carrow did not meet the Plan’s “any occupation” disability definition. This suit ensued. The question for the Eighth Circuit Court of Appeals (the “Court”): did Standard abuse its discretion in stopping the benefits?
In answering this question, the Court noted that, since the Plan gives Standard full discretion to construe terms and make eligibility determinations, Standard’s decision to terminate the LTD benefits is reviewed for an abuse of discretion. Also, since a conflict of interest exists, because Standard is both the decision-maker on benefit claims and the insurer, the Court must take that conflict into account and give it some weight in the abuse-of- discretion analysis. In reviewing the case, the Court concluded that Standard did not abuse its discretion. In deciding to terminate the benefits, Standard relied on the reports of consulting, non-examining physicians over the reports of treating physicians, and made comparisons and credibility assessments among the reports of treating physicians. This reliance, and these comparisons and assessments, do not result in an abuse of discretion. Several of the treating physicians-whose reports Standard considered-had no financial tie to Standard, ameliorating the effect of the conflict of interest in this case. The reports of the consulting and treating physicians constitute substantial evidence supporting the Plan administrator’s decision. Further, while the SSA found that Carrow was disabled, a plan administrator is not bound by the SSA findings.
Since it concluded that Standard did not abuse its discretion in deciding to terminate Carrow’s LTD benefits from the Plan, the Court upheld the district court’s summary judgment in favor of Standard.