ERISA-Eighth Circuit Upholds The Insurer’s Termination Of Disability Benefits

In Wade v. Aetna Life Insurance Company, No. 11-3295 (8th Cir. 2012), the defendant, Aetna Life Insurance Company (“Aetna”), as plan administrator of a welfare benefits plan (the “Plan”), determined that the plaintiff, Sharon Wade (“Wade”), was no longer disabled and stopped paying long-term disability (“LTD”) benefits to her from the Plan. Wade brought suit under ERISA. The district court granted summary judgment in favor of Aetna, upholding Aetna’s decision to terminate Wade’s Ltd benefits and concluding that Aetna did not abuse its discretion in reaching this decision because the decision was supported by substantial evidence. The Eighth Circuit Court of Appeals (the “Court”) affirmed the district court’s grant of summary judgment.

In so ruling, the Court found that the district court: (1) applied the correct standard of review to Aetna’s decision to stop the LTD benefits (it applied a deferential standard due to language in the Plan which gave Aetna discretionary authority to determine benefit entitlement); (2) gave appropriate weight to the Social Security Administration’s (the “SSA”) grant of long-term disability benefits to Wade (it noted that a plan administrator is not bound by an SSA determination); and (3) did not abuse its discretion by determining substantial evidence supported Aetna’s decision.

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