In an ERISA decision issued August 13, 2018, the Tenth Circuit was critical of almost every step in AT&T’s process for denying disability benefits to its employee.
The decision in McMillan v. AT&T Umbrella Benefit Plan No. 1 provides several key takeaways that merit a reminder about the proper administration of ERISA disability claims.
At issue in McMillan were 26 weeks of short term disability benefits. To qualify for these benefits one had to be unable “to perform all of the essential functions of his job” as a Senior IT Client Consultant.
Reading the opinion and appreciating the case’s prolonged administrative and court history, you could suspect the Plan spent more on attorneys’ fees and administrative costs than the benefits that were at issue.
McMillan had coronary disease, type-two diabetes, hypertension and sleep apnea. A cardiologist determined that he had small vessel coronary disease that could not be corrected by surgery or grafting. McMillan reported that he experienced shortness of breath even when walking on flat ground inside as well as daytime somnolence. In addition, a neuro psych exam performed as a part of the Social Security proceedings had concluded that McMillan would have marked difficulty concentrating and persisting through a normal work day due to memory problems.
The Plan consulted with five doctors from different areas of specialty, and all five concluded McMillan was not disabled. The Plan denied the claim and then the appeal. The district court found the Plan’s denial was arbitrary and capricious, but rather than award benefits it remanded the matter to the administrator. The court concluded that the Plan had failed to adequately consider McMillan’s ability to perform all of his essential job functions and had incorrectly classified the occupation as sedentary. McMillan’s job required him to travel between 20 and 100% of his work week and the district court did not believe those duties were consistent with the sedentary classification.
McMillan submitted more medical records on remand and the Plan retained new medical consultants, but the outcome was the same. This time the district court again found the administrator’s decision arbitrary and capricious, and entered judgement for McMillan. The Tenth Circuit affirmed.
Here are five takeaways from this case.
None of these takeaways is surprising headline news. But the fact we have to read them in a federal appellate court opinion in 2018 is a good reminder of their importance.
Rick Pautler is a partner in Thompson Coburn's ERISA Litigation practice.
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