ERISA-Eighth Circuit Upholds Administrator’s Termination Of Long-Term Disability Benefits

In Gerhardt v. Liberty Life Assurance Company of Boston, No. 12-3159 (8th Cir. 2013), the plaintiff, Lisa Gerhardt (“Gerhardt”), was appealing the district court’s decision to uphold the decision of the defendant, Liberty Life Assurance Company of Boston (“Liberty”), to terminate payment of her long-term disability (“LTD”) benefits.

Gerhardt had worked as a registered nurse, and had held other positions in the healthcare field. Gerhardt had stopped working because she suffered from osteoarthritis and needed to undergo anthroplasty surgery on each of her thumbs. At the time, her employer maintained a plan which provided LTD benefits, and which was administered by Liberty. Liberty initially approved Gerhardt’s claim for LTD benefits under the plan. Thereafter, Gerhardt developed additional medical problems. However, under the plan, to continue to receive the LTD benefits, the claimant must be unable to perform his or her own job, or any job for which the claimant is reasonably fitted. After a number of years, Liberty determined that Gerhardt did not meet this standard and terminated the LTD benefits. This suit ensued.

In analyzing the case, the Eighth Circuit Court of Appeals (the “Court) said that, because it is undisputed that the plan gave Liberty discretionary authority to determine Gerhardt’s eligibility for benefits, it will review Liberty’s decision to terminate the LTD benefits for abuse of discretion. Under this standard, the administrator’s decision will stand if it is reasonable, i.e., if it is supported by substantial evidence. Here, the Court concluded that Gerhardt has not established that Liberty entirely ignored relevant evidence or that Liberty’s decision to terminate its payment of the LTD benefits was otherwise unreasonable. The record reflects that Liberty’s decision to terminate the LTD benefits was supported by substantial evidence and thus did not constitute an abuse of discretion. As such, the Court upheld Liberty’s decision and affirmed the district court’s judgment.

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