:: Eleventh Circuit Affirms Benefit Denial Under “Multi-Step” Analysis

This court uses a multi-step analysis to guide these reviews of Administrator decisions and the various standards of review. HCA Health Services of Georgia, Inc. v. Employers Health Ins. Co., 240 F.3d 982, 993-95 (11th Cir. 2001). The analysis involves six steps:

(1) Apply the de novo standard to determine whether the claim administrator’s benefits-denial decision is “wrong” (i.e., the court disagrees with the administrator’s decision); if it is not, then end the inquiry and affirm the decision.

(2) If the administrator’s decision in fact is “de novo wrong,” then determine whether he was vested with discretion in reviewing claims; if not, end judicial inquiry and reverse the decision

(3) If the administrator’s decision is “de novo wrong” and he was vested with discretion in reviewing claims, then determine whether “reasonable” grounds supported it (hence, review his decision under the more deferential arbitrary and capricious standard).

(4) If no reasonable grounds exist, then end the inquiry and reverse the administrator’s decision; if reasonable grounds do exist, then determine if he operated under a conflict of interest.

(5) If there is no conflict, then end the inquiry and affirm the decision.

(6) If there is a conflict of interest, then apply heightened arbitraryand capricious review to the decision to affirm or deny it.

Ruple v. Hartford Life & Accident Insurance (09-11287) (August 11, 2009)

Thanks to Jeffrey T. Kuntz of GrayRobinson, P.A. for calling attention to this unpublished Eleventh Circuit opinion which touches on a number of issues.  Jeffery notes that, because the court decided the case at the first step of the analysis, it did not view that the level of discretion held by Hartford was signficant.

As he further observes, at the first stage of the analysis, the Court applies the terms of the policy and review is limited to the administrative record.

Our law is clear, however, that even under the first step of the BellSouth analysis, where the court determines whether the administrator was wrong under a “de novo” standard, “[w]e are limited to the record that was before [the administrator] when it made its decision.” Glazer v. Reliance Standard Life Ins., 524 F.3d 1241, 1247 (11th Cir. 2008); Jett, 890 F.2d at 1139. Accordingly, the Magistrate Judge appropriately refused to allow Ruple to submit new evidence not contained in the administrative record before Hartford.

Note:  The Eleventh Circuit has previously suggested the 6th step is questionable post-Glenn.  See :: “Heightened Arbitrary And Capricious Review” Questioned After Glenn.  I believe a case can be made that Glenn alters the step by step analysis altogether with its “combination of factors” approach, but that is a broader topic.

Social Security Admistration’s Determination  –  Not surprisingly, the Court notes that a Social Security Administration’s determination that an individual is or is not disabled under its statutes and regulations does not dictate whether that same individual is disabled under the terms of an ERISA policy.

 Burden of Proof – The Court also rejected a suggestion that the burden of proof shifted to the carrier.

Although Ruple acknowledges that the burden ordinarily rests with the person claiming benefits under an ERISA plan, see Horton v. Reliance Standard Life Ins. Co., 141 F.3d 1038, 1040 (11th Cir. 1998), he contends that because Hartford once gave benefits the burden shifts to Hartford to prove that he is no longer entitled to benefits. Ruple relies on Levinson v. Reliance Standard Life Ins. Co., 245 F.3d 1321 (11th Cir. 2001) to support his argument that the burden shifts to the administrator to disprove disability once the administrator has begun paying benefits. We disagree with Ruple’s reading of Levinson