Long-Term Disability Insurers Must Provide You New Evidence in Advance of the Deadline to Decide Your Appeal

Employees in Chicago and the rest of Illinois with claims for long-term disability insurance benefits often contact us after performing their own appeals of a denial or termination of a claim, and upon receiving a notice from the insurer providing time to review and respond to new information generated in reviewing the claimant’s appeal. This notice is a result of 2018 amendments to ERISA’s claims procedure regulations providing that before a plan can issue an adverse decision on review of an appeal, it must provide the claimant with any new evidence “as soon as possible and sufficiently in advance of the date on which the notice of adverse benefit determination on review is required to be provided . . . .” 29 C.F.R. § 2560.503-1(h)(4)(i). But what happens if a long-term disability insurer does not provide that new evidence, or does not provide it in advance of the decision upholding an adverse benefit determination? A recent case demonstrates how courts treat this failure under the regulations.

In Sami v. The Guardian Life Insurance Co. of America, No. 23-20168, 2024 WL 3495322 (S.D. Fla. July 22, 2024), Sami suffered a transient ischemic attack and ceased working as a shipping supervisor. He claimed long-term disability benefits under his employer-sponsored group long-term disability insurance policy insured by Guardian. Guardian approved the claim initially, concluding Sami was disabled from his own occupation. But after Sami received benefits for two years, the policy’s definition of disability changed to require Sami demonstrate he was disabled from any gainful occupation, and at that point Guardian terminated benefits. Sami appealed the benefit termination. After conducting its review of Sami’s appeal, Guardian sent Sami two medical reviews it obtained and a vocational transferability of work stills report concurrently with its decision to uphold the benefit termination, thereby giving Sami no opportunity to respond to the new evidence in advance of the deadline for Guardian to render its decision on the appeal. Sami then sued Guardian under ERISA § 502(a).

The United States District Court for the Southern District of Florida refused to uphold Guardian’s benefit termination, and held Guardian denied Sami a full and fair review of his claim. The court reasoned an insurer cannot comply with the 2018 amendments to the claim procedure regulation by including the new evidence with the final decision, for it deprives the claimant of the ability to review and respond to the new information in advance of the deadline to render the decision on review. The court held it could not review the merits of the decision, though, until a complete administrative record was compiled including Sami’s review and response to the new evidence. The court thus remanded the matter back to Guardian to allow Sami to review and respond to the new evidence, and include that review and response in the record.

If you have a claim for long-term disability benefits call a knowledgeable ERISA long-term disability attorney today.