Employees who are participants in disability plans sponsored by Chicago area employers frequently call my office after receiving a letter denying a claim for benefits. Often times, the reason for the denial may have been a procedural error by the administrator, preventing it from giving you a “full and fair review”, as required by ERISA. The denial letter must explain the reason for the denial, it must reference the specific plan provision upon which the denial is based, and it must describe any additional material or information you would need to submit in order to get the benefits. 29 C.F.R. § 2560.503-1(g)(1).
ERISA imposes a high standard of care upon fiduciaries that make decision on claims. Merely telling claimants they need to submit additional medical records will not typically meet this standard. But even where the administrator fails to meet this standard, the question may arise whether the claim was denied for lack of supporting evidence or not. Such was the case recently in Tortora v. SBC Communications, Inc., 2011 U.S. App. LEXIS 22407 (2d Cir. Nov. 3, 2011). Sedgwick, as claims administrator for SBC’s disability plan, denied a claim and stated “You may also submit additional medical or vocational information, and any facts, data, questions or comments you deem appropriate for us to give your appeal proper consideration.” The court held that language did not meet the standard imposed by ERISA because it did not provide proper notice of how to perfect the claim. However, according to the denial letter, the medical records submitted were not indicative of disability, so the error was harmless.