In Melech v. Life Insurance Company of North America, No. 12-14999 (11th Cir. 2014), the plaintiff, Diane Melech (“Melech”), was the beneficiary of an employee welfare benefit plan provided by her employer Hertz. The plan includes a disability insurance policy (the “Policy”) issued and administered by the defendant Life Insurance Company of North America (“LINA”).
In the case, Melech stopped working at Hertz in May 2007, when her treating orthopedist took her off work on account of his diagnoses of degenerative disc disease in her cervical spine and tendonitis in her right shoulder. Melech submitted a claim for long-term disability (“LTD”) benefits under the Policy in October 2007. At LINA’s direction, she also applied for Social Security Disability Income (“SSDI”) that same month. LINA denied Melech’s claim in November 2007, while her SSDI application was still pending before the Social Security Administration (“SSA”). Melech appealed the denial of her claim through LINA’s administrative process.
In December 2007, the SSA asked Melech to visit two new physicians for an independent assessment of her condition. The SSA granted Melech’s application for disability benefits in February 2008, and Melech so informed LINA. LINA then went on to deny two consecutive administrative appeals without considering or even asking Melech for the SSA’s decision, the two SSA physicians’ assessments, or any other evidence before the SSA. This suit ensued, with Melech claiming that LINA violated the Policy’s terms and ERISA’s requirements–in part because LINA ignored the SSA process and the information it generated. The District Court granted summary judgment in favor of LINA, concluding that LINA’s ultimate decision to deny LTD benefits under the Policy was correct based on the administrative record in LINA’s possession at the time it made its decision–a record that did not contain any information related to Melech’s SSDI application. Melech appeals.
In analyzing the case, the Eleventh Circuit Court of Appeals (the “Court”) said that it was not judging the propriety of LINA’s ultimate decision to deny Melech’s claim for LTD benefits under the Policy. Rather, the Court held-after lenghthy analysis concerning the relation of SSDI benefits to LTD benefits under the Policy- that LINA had an obligation to consider the evidence presented to the SSA. Thus, because LINA did not have this evidence when it denied Melech’s last appeal–and in fact could not have had that evidence when it initially denied her claim–the Court vacated the District Court’s judgment, and remanded the case to the District Court with instructions to remand Melech’s claim to LINA for its consideration of the evidence presented to the SSA.