Rittinger v. Healthy Alliance Life Insurance Company, 2019 WL 391771 (5th Cir. 2019)
The Fifth Circuit has upheld a plan administrator’s denial of benefits for bariatric surgery and related complications. The plan excluded bariatric surgery of all types, including complications related to any such surgery, except that the exclusion did not apply to conditions related to “excessive nausea/vomiting.” The trial court concluded that the administrator abused its discretion because its construction of the plan’s terms contradicted their meaning, and it gave insufficient weight to the participant’s assertion that her situation fell within the nausea/vomiting exception. The appellate court reversed, explaining that the trial court was not supposed to weigh and balance the evidence. Rather, the highly deferential abuse of discretion standard of review required only that the court determine whether the administrator had at least a scintilla of evidence to support its conclusion—which the appellate court determined it did.
After first determining that an email from the participant’s spouse was properly treated as the first-level appeal, the court reviewed the administrator’s denial of the second-level appeal. It noted that the participant’s pre-surgical medical records did not mention excessive nausea or vomiting, and that references to those conditions in the administrative record only appeared after the coverage dispute began. The participant contended that the administrator had denied her full and fair review by ignoring this evidence, but the administrator said it was within its rights not to credit “after-the-fact, self-serving affidavits.” Acknowledging that the denial notice did not explain how the administrator weighed the evidence, the court nevertheless concluded that the determination that the surgery was for weight loss (and not to treat excessive nausea/vomiting) cleared the low more-than-a-scintilla threshold. Under the deferential standard of review, an administrator’s weighing of different physicians’ opinions and other evidence is to be respected, so long as it is not arbitrary; whether a court views the administrator’s decision as correct is irrelevant.
EBIA Comment: The participant argued that recent precedent required use of the non-deferential de novo standard of review (see our Checkpoint article), but the court distinguished that decision, explaining that this plan’s discretionary authority language was enforceable, and a state law invalidating discretionary authority language did not apply because the plan document specified that a different state’s law controlled. De novo review may have resulted in the denial being overturned—the plan expressly excluded bariatric surgery, but some of the court’s comments suggested that the decision barely met the abuse-of-discretion standard. In general, denial notices should clearly explain the reasons for the administrator’s decision. For more information, see EBIA’s ERISA Compliance manual at Sections XXXIV.N (“How to Protect Claim Denials From Being Reversed in Court”) and XXXVI.C (“Standard of Judicial Review Applied to Benefit Decisions Under ERISA Plans”). See also EBIA’s Self-Insured Health Plans manual at Section XIII.E (“Coverage Limitations and Exclusions”).
Contributing Editors: EBIA Staff.