An Improved Standard of Review for ERISA Disability Benefit Claims in Texas
An Improved Standard of Review for ERISA Disability Benefit Claims in Texas
On March 1, 2018, the U.S. Fifth Circuit Court of Appeals (which decides how federal law applies in Texas), issued its decision in Ariana M v. Humana. The decision was a significant win for Texas citizens—providing us with protections that have been available to the rest of the country for years. With this development, an employee whose long term disability insurance claim or health insurance claim was wrongfully denied, can file a lawsuit and ask a federal judge to independently evaluate whether the claim should be paid.
Previously, when a Texas claimant challenged an insurance company’s wrongful denial of disability benefits, a federal judge would review the company’s “factual determinations” using the deferential “abuse of discretion” standard. The review might very in intensity, but usually resulted in the judge rubber-stamping the company’s decision—even though the judge actually disagreed with the decision and thought the benefits were otherwise owed. The Fifth Circuit, since its 1991 decision in Pierre v. Connecticut General Life, has been the only court in the country to mandate deference to insurance companies’ self-serving factual determinations, which provided shelter for denying eligible claims.
Now, the review standard used by trial judges will be de novo review. This means the judge will independently review and evaluate the medical evidence and proof of disability submitted by the claimant. The judge is no longer constrained to accepting the insurance company’s factual determination and is no longer required to accept the insurance company’s medical record reviewer’s opinions over those of the claimant’s treating physicians. Finally, after many years of unfair treatment, claimants in Texas have an improved standard of review by which to challenge wrongfully denied health and disability insurance benefits.