This matter is currently before the Court upon the motion [DE #11] of the plaintiff, Boyd Van Winkle, Jr., for de novo review of the denial of his application for long-term disability benefits under an ERISA-governed benefit plan offered by his employer, Kentucky Utilities, and issued and administered by the defendant, Life Insurance Company of North America, d/b/a/ Cigna Group Insurance ("LINA"). Also before the Court is Van Winkle's motion to strike records from LINA's proposed administrative record [DE #11]. These matters are ripe for review.
I. FACTUAL AND PROCEDURAL BACKGROUND
As an employee for Kentucky Utilities ("KU"), Van Winkle was a participant in KU's ERISA-governed Benefit Plan. LINA issued a long-term disability ("LTD") policy ("the Policy") to KU to provide benefits under the Plan. LINA is also the administrator of the LTD Plan. Van Winkle remained insured under the LTD coverage when he became disabled from employment on October 12, 2010.
Van Winkle's short-term disability claim was approved for the maximum duration of six months because of his inability to perform his heavy duty operation as a technician for KU. Prior to the end date of these benefits, Van Winkle applied for LTD benefits on March 8, 2011 [AR 1136-46]. *fn1 Van Winkle provided LINA with authorizations to obtain his medical records [AR 1135-46]. He also applied for Social Security disability benefits. LINA requested medical information from Van Winkle's providers in order to assess his claim. [AR 2271-72, 2290-92]. Despite making second and third requests to some of Van Winkle's providers, LINA did not receive the requested information [AR 2269, 2267]. Although Van Winkle contends that he had provided the necessary medical records to LINA's representative, a company called Allsup, LINA contends that it never received these records. On April 21, 2011, LINA denied Van Winkle's LTD claim, noting that it had exhausted all efforts to obtain medical information from his providers and thus had no information on file to show proof of disability [AR 1125-26].
Van Winkle administratively appealed the denial of LTD benefits on July 27, 2011 [AR 119 et seq]. Included in his appeal were medical records and the opinion of his physician that he was "totally and permanently disabled" from a number of medical conditions. This appeal was denied by letter dated September 1, 2011 on the grounds that the records from the Veterans Administration Hospital ("VA") were not detailed enough to show how his alleged conditions impaired him from his job [AR 110-11, 117]. The letter also informed Van Winkle that he was administratively required to appeal the decision before filing a lawsuit and that he had 180 days to do so [AR 110-11].
On February 28, 2012, Van Winkle again appealed the decision to deny his LTD claim [AR 1656 et seq.] This appeal contained additional records from the VA (along with opinions of VA physicians that Van Winkle was totally disabled), independent psychological testing and opinion from a psychologist and a vocational expert stating that Van Winkle was disabled, and statements from Van Winkle's family and a co-worker about his inability to perform his work. Over the next few weeks, Van Winkle's counsel made multiple inquiries about the status of the appeal and was informed that a "behavioral health" review had been completed; however, it is unclear from the record if such review had been undertaken at this time [AR 24, 27].
LINA did review Van Winkle's claim, but apparently not until July 3, 2012 [AR 1655]. On that day, LINA sent a letter acknowledging that it had received the appeal and that it would now begin review by referring it to its disability appeals team [AR2236-37]. On July 16, 2012, LINA, by letter, requested an extension of time to respond to the appeal, asking for an additional 45 days [AR 2231].
Also on July 16, 2012, Van Winkle commenced this action, on the grounds that his claim was deemed denied and exhausted by LINA's failure to make a decision within the time allowed by the regulations [DE #1-1]. Summons was served on LINA on July 24, 2012. Shortly after receipt of summons, LINA for the first time forwarded Van Winkle's records to two doctors: Dr. Marcus Goldman and Dr. Siva Ayyar, requesting a peer review [AR 1633-42, 1643-47]. Then on September 6, 2012, while this litigation was pending, LINA issued a denial letter, claiming that Van Winkle could perform his heavy duty job, relying on the peer review reports of Dr. Goldman and Dr. Ayyar [AR 2226-2229].
This Court issued its Scheduling Order on October 22, 2012, ordering that the parties file their memorandum regarding the appropriate standard of review [DE #8]. Additionally, the Court ordered that the Administrative Record be filed under seal no later than October 30, 2012, and that Van Winkle shall file any objections and/or motions regarding the administrative record no later than November 30, 2012. In accordance with this Order, Van Winkle filed his "Motion for De Novo Review and Motion to Strike Records from LINA's Proposed Administrative Record" [DE #11]. LINA filed its response to Van Winkle's motion on December 10, 2012 [DE #12].
It is well settled that courts review challenges to benefit determinations under the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq., "under the de novo standard, unless the benefit plan gives the plan administrator discretionary authority to determine eligibility for benefits or to construe the terms of the plan." University Hospital of Cleveland v. Emerson Electric, 202 F.3d 839, 845 (6th Cir. 2000)(citing Firestone Tire & Rubber Co. v. Bruch , 489 U.S. 101, 115 (1989). When the benefit plan gives the plan administrator discretion, the decision is to be reviewed under an arbitrary and capricious standard. Id. There is no dispute in this case that the plan vests LINA with discretionary authority, and as a result, the default standard of review is the arbitrary and capricious standard.
The issue in this case, however, is not whether the language in LINA's certificate of insurance gives it discretionary authority, but whether LINA loses any discretion that it may have had because of its alleged failure to exercise its discretion in accordance with the ERISA statute and regulations. ERISA was enacted by Congress to establish procedural safeguards to ensure that fiduciaries such as LINA administer benefit plans "solely in the interest of the participants and beneficiaries." 29 U.S.C. §§ 1104(a)(1) and 1001(b). Under ERISA, the Secretary of Labor is given authority by Congress to enact regulations and set deadlines for the administration of employee benefit claims. 29 U.S.C.§§ 1133 and 1135. Those rules and regulations are contained in 29 C.F.R. 2560.503-1, titled "Claims procedure."
Relevant to this case are the regulations requiring a benefits determination on appeal to be made within a certain time. 29 C.F.R. § 2560.503-1(i)(4). Specifically, decisions on disability claim appeals must be made within 45 days of submission of a disability appeal, but an administrator may take up to a maximum of 90 days total if it notifies the claimant within the first 45 days that an additional 45 days is necessary because of "special circumstances (such as the need to hold a hearing, if the plan's procedures provide for a hearing)." 29 C.F.R. 2560.503-1(i)(1) and (i)(3). Furthermore, the regulations require a plan administrator to notify the claimant, during the requisite time period, of, inter alia, the "specific reason or reasons for the adverse determination," ...