In Prezioso v. The Prudential Insurance Company of America, No. 13-1641 (8th Cir. 2014), the plaintiff, Michael Prezioso (“Prezioso”), brought suit under Section 502(a)(1)(B) of ERISA, claiming that the Prudential Insurance Company of America (“Prudential”) wrongly denied him long term disability (“LTD”) benefits-for disability due to a back injury at work- under a group policy sponsored by his former employer (the “Plan”). Prezioso appeals the district court’s grant of summary judgment dismissing this claim. He argues that the court erred in applying the abuse of discretion standard of judicial review and, alternatively, that Prudential abused its discretion in denying LTD benefits.
In analyzing the case, the Eighth Circuit Court of Appeals (the “Court”) said that a denial of benefits challenged under ERISA is to be reviewed under a de novo standard, unless the benefit plan gives the administrator discretionary authority to determine eligibility for benefits, in which case a deferential standard applies. In this case, the Court found that the Plan has sufficient language to provide Prudential-the plan administrator- with such discretionary authority. For instance, the policy expressly provides that, in considering a claim for LTD benefits, Prudential may request proof of continuing disability, satisfactory to Prudential. Another provision states that benefits, if granted, will cease on the date you fail to submit proof of continuing disability satisfactory to Prudential. Further, the Plan’s summary plan description (“SPD”) clearly explains to plan participants that Prudential has the sole discretion to interpret the terms of the Group Contract, to make factual findings, and to determine eligibility for benefits, and that Prudential’s decisions as claims administrator shall not be overturned unless arbitrary and capricious. The SPD-which clearly grants discretionary authority to Prudential-may be relied on as a clarification of the Plan. As such, the Court ruled that Prudential has the requisite discretionary authority, so that its decision to deny LTD benefits is entitled to a deferential review.
As to the question of whether Prudential abused its discretion in deciding to deny the LTD benefits, the Court said that the record demonstrates that Prudential provided Prezioso a required full and fair review before denying his first appeal from the initial denial of LTD benefits. It considered all comments, medical records, and other information submitted by Prezioso; did not afford deference to the initial decision; referred the appeal to a different decision maker; consulted a neutral health care professional with appropriate training and experience in lower back disabilities; and obtained advice from a qualified vocational expert regarding the demands of Prezioso’s regular occupation. See 29 C.F.R. § 2560.503-1(h)(2) and (3). Prudential did not abuse its discretion by according more weight to the opinions of its own experts than to the opinions of Prezioso’s treating physicians and other experts. Based on this record, the Court held that Prudential did not abuse its discretion in denying Prezioso’s first appeal from the adverse initial decision. Similarly, the Court held that subsequent medical evidence submitted by Prezioso for a voluntary, second appeal he took did not render Prudential’s denial of his mandatory first appeal an abuse of discretion As such, the Court concluded that Prudential did not abuse it discretion in deciding to deny the LTD benefits, and affirmed the district court’s summary judgment in Prudential’s favor.