:: Reinstatements Revisited

Quote:

Because the record does not suggest the Plan’s decision to terminate Tate’s long-term disability benefits was the result of an informed reasoning process, we conclude that the decision was arbitrary and capricious. But we cannot say that Tate was entitled to continued long-term disability benefits at the time her benefits were terminated, so we affirm the district court’s decision to remand the case for further proceedings. Tate v. Long Term Disability Plan for Salaried Employees, Nos. 07-1022 & 07-1116 (7th Cir.) (September 19, 2008)

After just reviewing the 7th Circuit decision in Hackett v. Xerox Corp. Long-Term Disability Income Plan, 315 F.3d 771 (7th Cir. 2003), so influential in Pannebecker v. Liberty Life Assur. Co., 2008 U.S. App. LEXIS 19753 (9th Cir. Ariz. Sept. 18, 2008), I find this recent decision from the 7th Circuit curious.

This appears to be a case where the plan decision should fall in Category #2, as benefits were previously approved, but later terminated without a principled decision. Therefore, under Hackett,benefits should be reinstated.

Perhaps that is relief that will be awarded after proceedings on “remand”, but it seems a hardship on the plan participant to have to await that remedy during the plan administrator’s further proceedings.

The Court faulted the decision by the plan administrator in the following respects: Quote:

Yet the Plan did not determine what occupation that might be, or explain why, after years of concluding that Tate was disabled, it found Tate (a former sales employee who has not left her house in many years except to see her treating physicians) suddenly able to work. Tate filed suit to recover benefits after exhausting her administrative appeals. On cross-motions for summary judgment, the district court determined that the Plan administrator had acted arbitrarily and capriciously in denying Tate’s benefits and remanded the case so that the Plan could conclusively establish whether Tate is entitled to benefits.

(cross posted to ERISABoard.com)