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Fifth Circuit Upholds Denial of Long-Term Disability Benefits Under Own-Occupation Policy for Subjective Medical Condition




Foster v. Principal Life Ins. Co., 920 F.3d 298 (5th Cir. 2019)

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An attorney who stopped working due to severe migraines was denied long-term disability benefits under her employer’s ERISA plan. Although benefits had initially been approved on a contingent basis, the plan administrator eventually terminated benefits due to lack of disability, concluding that the participant was capable of full-time sedentary work. The participant engaged in the plan’s appeals process (including an external review), resulting in reports from a number of medical professionals. After the plan’s final denial, the participant sued, and the trial court upheld the denial.

On appeal, the Fifth Circuit applied the abuse of discretion standard, under which an ERISA plan fiduciary’s decision will be upheld so long as it is supported by substantial evidence and is not arbitrary and capricious. The participant argued that the administrator abused its discretion by analyzing her disabling condition in the context of full-time sedentary work, not her actual job duties as an attorney, given that the plan contained an “own occupation” clause. But the court noted that at least one of the physicians who reviewed the claim opined that the participant would not have functional limitations working on complex legal tasks if they did not involve much oversight or responsibility. This consideration of the participant’s disability in the context of her duties as an attorney satisfied the low bar set by the abuse of discretion standard. The participant also contested the denial of benefits on the basis of a lack of “objective or clinical evidence” of her migraines, arguing that she had provided subjective evidence since migraines are not objectively verifiable. Critically, the court noted that “although the existence of a disability like migraines may not be denied based on impossible-to-obtain objective evidence, that is not true of one’s inability to work as a result of migraines.” The court deemed reasonable the administrator’s request for objective verification of the functional limitations resulting from her migraines. Lastly, the court was unconcerned by the administrator’s structural conflict of interest as both the claims payor and administrator, given the administrator’s extensive investigation. Finding no abuse of discretion, the Fifth Circuit upheld the denial.

EBIA Comment: Plan administrators may reasonably require claimants seeking long-term disability benefits due to subjective conditions, such as migraines, fibromyalgia, or post-traumatic stress disorder, to provide objective evidence of the functional limitations resulting from such conditions. And being able to demonstrate thorough consideration of the participant’s claim increases the likelihood that the plan’s decision will be upheld. For more information, see EBIA’s ERISA Compliance manual at Sections XXXIV.N (“How to Protect Claim Denials From Being Reversed in Court”), XXXV (“Claims Procedures for Disability and Other Non-Health Claims”), and XXXVI.C (“Standard of Judicial Review Applied to Benefit Decisions Under ERISA Plans”).

Contributing Editors: EBIA Staff.

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