The Fourth Circuit Court of
Appeals has provided guidance on a plan administrator's obligation
under ERISA to seek and obtain information relevant to a
participant's claim when the participant has not directly provided
the information. In Harrison v. Wells Fargo, the Fourth
Circuit overturned a plan administrator's decision to deny a
participant's claim for short-term disability benefits, finding that
there was readily available evidence confirming the participant's
claim of disability despite the participant's failure to include the
evidence in her claim.
Background. In Harrison, the plaintiff underwent
surgery to remove a large mass that had extended into her chest,
causing pain and tracheal compression. She was unable to work and
received short-term disability ("STD") benefits under her
employer's ERISA-covered plan. While recovering and waiting for a
second surgery, her husband died unexpectedly, triggering a
recurrence of depression and post-traumatic stress disorder
("PTSD") related to the death of her children a few years
Three weeks after her first
surgery, the plan administrator determined that the plaintiff had
recovered and discontinued her STD benefits. The plaintiff filed a
claim for reinstatement of STD benefits due to depression and PTSD,
but the employer denied this claim. The plaintiff then filed an administrative
appeal which included documentation from her treating physicians and
a letter from her primary caregiver. In the appeal, she disclosed
that she was also receiving treatment from a psychologist and
provided the psychologist's contact information.
The employer sent the appeal
for an independent peer review. The peer review physician contacted
the plaintiff's primary care physician, but did not contact the
psychologist. The peer review concluded that, in the absence of
psychological records, it could not determine whether the plaintiff's
psychiatric status limited her functional capacity. As a result, the
employer denied the appeal and upheld the benefit denial.
The plaintiff next filed a
lawsuit against the employer for benefits under ERISA. The district
court found that there was insufficient evidence of disability and
that the employer did not abuse its discretion in denying the
plaintiff's claim. The plaintiff appealed to the Fourth Circuit.
Fourth Circuit. On appeal, the Fourth Circuit reversed the
lower court and remanded the claim for further review. The Fourth
Circuit found that the employer had failed to contact the plaintiff's
psychologist even though it was on notice that she was seeking
psychological treatment. The Fourth Circuit held that, by not
contacting the plaintiff's psychologist the employer chose to remain
"willfully blind" to readily available information that may
have confirmed her disability.
The Fourth Circuit confirmed
that ERISA requires a plan administrator to use a "deliberate,
principled, reasoning process" in claims determination. The
court noted that this does not require plan administrators to
"scour the countryside in search of evidence" to bolster a
participant's claim. However, the court indicated that where
potentially relevant information is available, ERISA does not permit
an administrator to "shut his eyes" to that information.
Action Steps for
Employers. In the wake of Harrison,
plan administrators are advised to seek out all readily available
information in the claims determination process, even where the
claimant has not provided it as part of the original claim or appeal.
Failure to do so could result in a court determining that the
administrative claims process was deficient.