Fourth Circuit Agrees that ERISA Plan Wrongly Terminated Benefits
The claimant, Deborah Donovan, left work in 1993 due to back pain and degenerative disc disease. Her employer’s ERISA plan paid her long-term disability benefits for ten years. The Social Security Administration awarded her disability benefits in 1994. The claim administrator for the self-funded plan eventually terminated her disability benefits, stating that there was insufficient objective evidence to support her claim. Donovan’s internal appeals were denied, and she filed suit under ERISA.
The federal district court reversed the plan’s decision to terminate benefits and ordered the plan to reinstate benefits. On appeal, the Fourth Circuit affirmed the judgment of the district court, holding that the plan had abused its discretion in terminating benefits. In its analysis, the Court weighed the various evidence contained in the claims file, including test results and affidavits from treating providers.
As an example, the Court found that the plan disregarded a treating physician’s affidavit stating that Donovan’s Functional Capacity Evaluation was “not an accurate indicator of her ability to work on a consistent basis” and confirming that Donovan was totally disabled. The Court concluded that the plan instead latched onto that same physician’s earlier statement that Donovan could perform sedentary work with limitations. The Court reasoned that the physicians’ earlier statement was based on incomplete information and that his later affidavit was supported by other medical evidence.
The cite is Donovan v. Eaton Corp. Long Term Disability Plan, 2006 WL 2530393 (4th Cir. Sep. 5, 2006). Click here to read the opinion.