McKennon Law, Author at McKennon Law

In the world of ERISA law, the “pre-existing condition” exclusion is often a battleground of policy interpretation and semantics. However, a recent decision by the United States Court of Appeals for the Eleventh Circuit, Johnson v. Reliance Standard Life Insurance Company 159 F.4th 1304 (11th Cir. 2025), has provided a significant victory for policyholders by clarifying the limits of an insurer’s power to retroactively link vague symptoms to an undiagnosed disease. The court’s ruling emphasizes that for an exclusion to stick, there must be a genuine connection between the treatment received and the sickness causing disability itself—not just a backward-looking reinterpretation of symptoms.

The Long Road to a Diagnosis

Cheriese Johnson’s ordeal began in December 2015, months before she was hired by The William Carter Company and enrolled in a long-term disability (LTD) plan through Reliance Standard Life Insurance Company (Reliance Standard). Between July and October 2016—a crucial “lookback period” for her policy—she visited numerous doctors for a host of “garden-variety ailments,” including nausea, fatigue, and joint swelling. Despite receiving ten different diagnoses during this time, from helicobacter pylori to edema, none of her physicians suspected the rare autoimmune disease she had: scleroderma.

By January 2017, Johnson was “totally disabled” and unable to work. It was not until a lung biopsy in February 2017 that the scleroderma was finally discovered. Reliance Standard denied her claim for LTD benefits, arguing that because her symptoms during the lookback period were not inconsistent” with scleroderma, the disease was a pre-existing condition. After a district court sided with the insurer, Johnson appealed to the Eleventh Circuit.

The “For Which” Analysis

The heart of the case rested on the policy’s definition of a pre-existing condition: “any Sickness or Injury for which the Insured received medical Treatment, consultation, care or services” during the lookback period. The court focused heavily on the word “for,” noting that it “connotes intent” and indicates the “object, aim, or purpose of an action.” Applying this “ordinary and popular” meaning, the majority concluded that Johnson could not have received treatment for scleroderma because neither she nor her doctors knew or even suspected the condition existed at the time.

The court was biting in its rejection of Reliance Standard’s broader view. The majority noted that if an insurer could deny benefits for any symptom later deemed “not inconsistent” with a diagnosis, they could “deny coverage for a brain tumor if the doctor encouraged a patient with headaches to drink more water” during the lookback period. The court stressed that while Johnson was treated for symptoms like fatigue and nausea, those “symptoms are not the disease.” The Eleventh Circuit ultimately reversed the summary judgment in favor of Reliance Standard and remanded the case.

Arbitrary and Capricious Reasoning

Under the Eleventh Circuit’s unique “six-step dance” for ERISA reviews, the court found that Reliance Standard’s decision was not just wrong, but unreasonable. The court held that the insurer’s interpretation “completely elides the distinction between receiving medical care for symptoms not inconsistent with a preexisting condition and receiving medical care for a preexisting condition itself.” By attempting to “warp” the policy language into a pre-existing-symptom exclusion, Reliance Standard acted in an arbitrary and capricious manner.

The court further criticized the use of ex post facto analysis to bridge the gap between a patient’s symptoms and an eventual diagnosis.

Key Takeaways for ERISA Practitioners

The Johnson case provides several critical lessons for both insurers and plan participants:

“For Which” Means Intent: The phrase “for which” implies that the doctor or patient had a specific condition in mind. You cannot provide treatment “for” a condition that is entirely unsuspected.
Symptoms vs. Sickness: Vague, non-specific symptoms (like fatigue or coughing) that could point to many different ailments are generally insufficient to trigger a pre-existing condition exclusion for a specific, later-diagnosed disease.
No Ex Post Facto Denials: Insurers cannot rely on “backward-looking reinterpretation of symptoms” to justify a denial if there was no evidence that the possibility of the disease “ever entered the minds” of the doctors during the lookback period.

Conclusion

This decision serves as a stern reminder that while LTD policies grant insurers significant discretion, that discretion is not absolute. As the court noted, deferential review is not no review, and insurers cannot rewrite their policies on the fly to exclude claims based on backward-looking logic. For Cheriese Johnson and others facing rare, difficult-to-diagnose diseases, the ruling ensures that the pre-existing condition shield cannot be used as a sword to cut off legitimate benefits.

In two significant rulings issued on the same day, the United States District Court for the Western District of Washington addressed key issues under the Employee Retirement Income Security Act (ERISA) in Hamilton v. Logic20/20, Inc. and Prudential Insurance Company of America, 2025 U.S. Dist. LEXIS 266756, 2025 WL 3754023 (W.D. Wash. 2025) and Hamilton v. Logic20/20, Inc. and Prudential Insurance Company of America, 2025 U.S. Dist. LEXIS 266757, 2025 WL 3754065 (W.D. Wash. 2025). These cases highlight the responsibilities of insurers and employers under ERISA, particularly when it comes to representations about coverage, the acceptance of premiums, and the fiduciary duties owed to ERISA plan participants. This blog delves into the court’s rulings on the plaintiff’s claims under 29 U.S.C. § 1132(a)(1)(B) and 29 U.S.C. § 1132(a)(3)(B), the court’s reliance on the Ninth Circuit’s decision in Salyers v. Metropolitan Life Insurance Co., ., 871 F.3d 934 (9th Cir. 2017) and the broader implications for ERISA fiduciaries.

Introduction to the Case

The plaintiff, Alexis Hamilton, brought claims against her employer, Logic20/20, Inc., and the insurer, Prudential Insurance Company of America, alleging violations of ERISA. The plaintiff asserted ERISA claims against Prudential under §§ 29 U.S.C. § 1132(a)(1)(B)) and 29 U.S.C. § 1132(a)(3), and against Logic20/20 for breach of fiduciary duty, equitable relief, and statutory penalties for failure to provide plan documents.

Hamilton’s claims arose from Prudential’s denial of her long-term disability (LTD) benefits, despite having accepted her premiums for over two years. The court denied Prudential’s motion to dismiss, allowing Hamilton’s claims to proceed. This decision underscores the importance of fiduciary duties under ERISA and the consequences of misleading plan participants.

The Plaintiff’s Claims Under 29 U.S.C. § 1132(a)(1)(B)

Hamilton’s first claim sought to recover LTD benefits under 29 U.S.C. § 1132(a)(1)(B), which allows a plan participant to recover benefits due under the terms of the plan. The court found that Hamilton had plausibly alleged that Prudential waived the evidence of insurability (EOI) requirement by accepting her premiums for over two years without requesting an EOI. Hamilton alleged that she reasonably believed she was covered under the plan because Prudential and Logic20/20 deducted premiums from her paycheck and never informed her of any deficiencies in her coverage until after she filed a claim for benefits in 2022.

The court relied heavily on the Ninth Circuit’s decision in Salyers v. Metropolitan Life Insurance Co., 871 F.3d 934 (9th Cir. 2017), which addressed similar issues. In Salyers, the court held that an insurer’s acceptance of premiums without requiring an EOI over a period of time could constitute a waiver of the EOI requirement. The Salyers court emphasized that ERISA exists to protect plan participants and ensure they receive the benefits they reasonably believe they are entitled to. Similarly, the court in Hamilton found that Prudential’s conduct—accepting premiums while failing to enforce the EOI requirement—was “so inconsistent with an intent to enforce” the requirement that it could reasonably induce Hamilton to believe she was covered.

The Plaintiff’s Claims Under 29 U.S.C. § 1132(a)(3)(B)

Hamilton’s second claim sought equitable relief under 29 U.S.C. § 1132(a)(3)(B), which allows a participant to obtain “appropriate equitable relief” to redress violations of ERISA or the terms of a plan. The court found that Hamilton had plausibly alleged a breach of fiduciary duty by Prudential. Specifically, Hamilton claimed that Prudential misled her by accepting premiums for LTD coverage while knowing she had not submitted an EOI. She further alleged that Prudential failed to notify her of her lack of eligibility until after she filed a claim for benefits, and that Prudential used a “compartmentalized system” to escape responsibility.

The court noted that under ERISA, fiduciaries have a duty to act in the best interests of plan participants and to provide accurate information about coverage. By accepting premiums and failing to clarify Hamilton’s coverage status, Prudential breached its fiduciary duty. The court also highlighted the equitable remedies sought by Hamilton, including estoppel, waiver, reformation, and surcharge. These remedies aim to address the harm caused by Prudential’s actions and ensure that Hamilton receives the benefits she reasonably believed she was entitled to.

The Court’s Reliance on Salyers

The court’s reliance on Salyers was pivotal in its analysis of both claims. In Salyers, the Ninth Circuit held that an insurer could not use a “compartmentalized system” to escape responsibility for its actions. The court in Hamilton found that Prudential’s conduct mirrored the conduct at issue in Salyers. Like the insurer in Salyers, Prudential accepted premiums for an extended period without requiring an EOI, leading Hamilton to believe she was covered. The court emphasized that ERISA’s purpose is to protect plan participants and ensure they receive the benefits they reasonably expect.

False Representations and Fiduciary Breach

A central issue in the case was Defendants’ false representations about Hamilton’s coverage. By accepting premiums and failing to enforce the EOI requirement, Defendants created the impression that Hamilton was covered under the plan. This conduct not only misled Hamilton but also violated Defendants’ fiduciary duty under ERISA. Fiduciaries are required to act in the best interests of plan participants and to provide accurate and complete information about coverage. Defendants’ failure to do so caused significant harm to Hamilton, including the denial of her LTD benefits and the loss of the opportunity to secure coverage from another provider.

Equitable Relief and Its Importance

The court’s discussion of equitable relief highlights the importance of remedies under ERISA. Hamilton sought several forms of equitable relief, including estoppel, waiver, reformation, and surcharge. These remedies are designed to address the harm caused by fiduciary breaches and to ensure that plan participants receive the benefits they are entitled to. For example, reformation could modify the terms of the plan to reflect Hamilton’s reasonable belief that she was covered, while surcharge could compensate her for the harm caused by Defendants’ actions.

The Broader Implications of the Ruling

The court’s decision in Hamilton has significant implications for insurers and employers under ERISA. It underscores the importance of clear and accurate communication with plan participants and the need to enforce plan requirements consistently. Insurers and employers must ensure that their actions align with their fiduciary duties and that they do not mislead participants about their coverage. Failure to do so can result in liability under ERISA and the imposition of equitable remedies.

Conclusion

The ruling in Hamilton v. Logic20/20, Inc. and Prudential Insurance Company of America serves as a powerful reminder of the fiduciary duties owed to plan participants under ERISA. By accepting premiums and failing to enforce the EOI requirement, Defendants misled Hamilton and breached its fiduciary duty. The court’s reliance on Salyers highlights the importance of protecting plan participants and ensuring they receive the benefits they reasonably expect. This case underscores the need for insurers and employers to act in the best interests of plan participants and to provide clear and accurate information about coverage. As the case proceeds, it will be closely watched for its implications for ERISA fiduciaries and the remedies available to plan participants.

INTRODUCTION: THE NINTH CIRCUIT AND ACCIDENTAL DEATH AND DISMEMBERMENT CLAIMS UNDER ERISA

When it comes to federal law in the western United States, few courts carry as much weight as the U.S. Court of Appeals for the Ninth Circuit. Headquartered in San Francisco, the Ninth Circuit is the largest of the thirteen federal appellate courts, covering nine western states and two Pacific Island jurisdictions — including California, Arizona, Nevada, Oregon, Washington, Alaska, Hawaii, Idaho, Montana, Guam, and the Northern Mariana Islands.

This court hears appeals from federal district courts within its jurisdiction and reviews decisions in a wide range of legal areas — from constitutional law and civil rights to environmental regulation, immigration, intellectual property, and ERISA benefits litigation. Because it covers such a vast and diverse population — over 60 million people — and because California generates a high volume of federal litigation, the Ninth Circuit’s rulings often have national influence.

Thus, the Ninth Circuit’s decisions frequently shape legal precedent well beyond its boundaries, especially when the U.S. Supreme Court declines to hear further appeals. Whether you are a lawyer navigating a complex ERISA claim or a litigant challenging a federal regulation, understanding how the Ninth Circuit interprets the law is critical — because what happens in the Ninth often sets the tone for what happens across the country.

ERISA governs most employer-sponsored benefit plans, including accidental death and dismemberment (AD&D) policies, which provide critical financial protection in the event of unforeseen injury or death. An issue that commonly arises in the AD&D claims process is whether a particular death qualifies as an “accident” under a given policy. This can be one of the most contentious issues in ERISA litigation and understanding how federal courts approach the definition of “accident” is crucial for successfully navigating AD&D benefit disputes.

WHAT CONSTITUTES AN “ACCIDENT”?

Generally, AD&D policies define “accident” as “an unintended or unforeseen bodily

injury sustained by a covered person, wholly independent of disease, bodily infirmity, illness, infection, or any other abnormal physical condition.” The Ninth Circuit has endorsed the widely accepted analytical framework for determining whether an event constitutes an “accident” under ERISA-governed AD&D policies as established by the First Circuit in Wickman v. Northwestern National Insurance Co., 908 F.2d 1077 (1st Cir. 1990). This framework involves an overlapping subjective and objective inquiry that examines both the decedent’s perspective and the circumstances surrounding the death from an objective standpoint. In Wickman, the decedent had climbed over the guardrail of a bridge and hung off the bridge with one hand, then fell and sustained extensive injuries from which he later died. It was unclear whether he intentionally let go of the bridge or if his hand slipped when he fell. The First Circuit Court of Appeals determined that the death was not an accident. The First Circuit concluded in Wickman that the decedent either subjectively expected serious injury, or his subjective expectation was inconclusive based on the evidence; objectively, a reasonable person in his shoes would have expected to die or be seriously injured when climbing over the guardrail and hanging off the bridge with one hand.

The Ninth Circuit established precedent for how courts should approach accident determinations in Padfield v. AIG Life Ins. Co., 290 F.3d 1121 (9th Cir. 2002). The decedent in Padfield died due to autoerotic asphyxiation and it was not apparent that he had intentionally killed himself; the court found that the death was accidental and held that injury sustained during a voluntary risky act is not necessarily “intentionally self-inflicted injury.”

A critical threshold issue in any AD&D case is whether the policy in question defines the term “accident.” Most policies provide a definition of the term “accident” exactly the same or similar to the definition discussed above. When policies contain specific definitions, courts apply only those policy-specific definitions rather than general common law interpretations, so this framework depends significantly on whether the policy itself provides a specific definition of “accident.” This principle reflects the fundamental contract law concept that parties’ express agreements should govern their relationship. Conversely, where the policy does not define “accident,” courts resort to the general federal common law definition developed through cases like Wickman and Padfield.

Although “accident” has been consistently described by courts as an inherently vague concept that is difficult to define, courts have recognized that the meaning of “accident” in insurance contracts must be that of the average person, who would characterize a dire result that is tragically out of proportion to its trivial cause as something unforeseen, unexpected, extraordinary, and an unlooked-for mishap. This test, derived from common speech and understanding, serves as the foundational approach that courts apply when interpreting undefined accident provisions.

EXCLUSIONS IN AD&D POLICIES

Exclusions also play a significant role in determining whether a claim is covered under an AD&D policy. One common exclusion is for losses caused or contributed to by illness or pre-existing conditions.

Perhaps the seminal case discussing the issue of whether this very common and important exclusion applies is Dowdy v. Metro. Life Ins. Co., 890 F.3d 802 (9th Cir. 2018), in which the Ninth Circuit instructed on use of the “substantial causation” test to determine whether a policy exclusion can serve as the basis for denying a claim.

In 2014, Tommy Dowdy, a 60-year-old diabetic, was involved in a serious automobile accident on California State Route 4 when he lost control of his vehicle. The accident resulted in severe injuries, including a semi-amputated left ankle and chest abrasions. Dowdy was transported by helicopter to John Muir Medical Center and treated in the Intensive Care Unit.

Dowdy remained hospitalized until October 11, 2014, and was discharged to a skilled nursing facility as non-weightbearing due to his leg injury. The injury failed to improve, and approximately three months later, he was transferred back to the hospital for treatment of persistent infection issues. On February 13, 2015, Dr. Christopher Coufal amputated Dowdy’s left leg below the knee.

The Dowdys had purchased accidental death and dismemberment insurance from Metropolitan Life Insurance Company (MetLife) through Mrs. Dowdy’s employment at Bank of the West. The policy provided coverage if the insured sustained an accidental injury that is the direct and sole cause of a covered loss. The policy defined direct and sole cause to mean that the covered loss occurs within 12 months of the date of the accidental injury and was a direct result of the accidental injury, independent of other causes.

The policy contained an illness or infirmity exclusion stating that MetLife would not issue benefits for any loss caused or contributed to by physical illness or infirmity, or the diagnosis or treatment of such illness or infirmity. MetLife denied the Dowdys’ claim, citing this exclusion and arguing that Dowdy’s diabetes contributed to the need for amputation. Dowdy sued MetLife. At a FRCP 52 hearing, the trial court agreed and entered judgment in favor of MetLife.

The Ninth Circuit reversed the district court’s decision, holding that the substantial contribution standard applies in interpreting the concepts of cause and contribution in illness or infirmity exclusions. The court explained that the Illness or Infirmity Exclusion serves the same purpose as the threshold limitation on coverage to accidental injury that is the “direct and sole cause” of a covered loss. Accordingly, to satisfy the exclusion, any cause or contribution by an illness or infirmity must be substantial.

The court emphasized that for a court to distinguish between a responsible cause and a philosophic insignificant cause, there must be some evidence of a significant magnitude of causation. Such evidence need not be presented with mathematical precision but must nonetheless demonstrate that a causal or contributing factor was more than merely related to the injury and was instead a substantial catalyst.

The Ninth Circuit provided important guidance on the meaning of “substantial” in the causation context. The court stated: the word “substantial” is used to denote the fact that the defendant’s conduct has such an effect in producing the harm as to lead reasonable men to regard it as a cause. Applying this standard to the facts, the court found that the record fell short of showing that diabetes was a substantial contributing factor. The court held that diabetes was a complicating factor, but it was not identified as a substantial contributor to the ultimate loss.

The Ninth Circuit emphasized that MetLife had the burden of proving that the exclusion applied. The court stated that under general principles of insurance law, exclusions are construed narrowly and that under ERISA, exclusionary clauses are given strict construction and should be read narrowly rather than expansively.

The Dowdy decision significantly impacts the interpretation of exclusionary clauses in ERISA-governed insurance policies. The ruling establishes that illness or infirmity exclusions must be interpreted using the substantial causation standard, requiring more than mere contribution or complication.

Another exclusion often found in AD&D policies is for self-inflicted injuries or suicide. Courts have consistently held that such exclusions are enforceable, provided they are clearly stated in the policy. Some policies also exclude coverage for injuries or deaths resulting from infections unless the infection occurs in an external accidental wound. Insurers bear the burden of proving that an exclusion applies to deny benefits. Claimants should carefully review their policy language and gather evidence to support their claim, particularly when exclusions or pre-existing conditions are at issue.

CONCLUSION

Navigating the complexities of AD&D policies under ERISA requires a thorough understanding of the policy language, applicable exclusions, and legal standards. The Ninth Circuit’s decisions provide valuable guidance on how courts interpret these policies, emphasizing the importance of clear and unambiguous terms. For policyholders, understanding the definitions and exclusions in their AD&D policies is crucial. By understanding what constitutes an accident and the potential exclusions, policyholders can better protect their rights and ensure they receive the benefits they are entitled to under their AD&D coverage.

If your employer sponsors a group insurance plan for its employees, insurers and plan administrators owe you fiduciary duties under the Employee Retirement Income Security Act of 1974 (ERISA). They are obligated to look out for your interests; when administering the plan and claims, they are obligated to ensure that you are well-informed as to the policy terms and must take whatever steps are necessary for your application to be completed and submitted properly. Likewise, insurers must prioritize your interests as an insured over their interests, for example, by ensuring that your claim receives a full and fair review.

When your disability insurer and plan administrator delay making decisions, you can feel trapped in limbo—unable to return to work, unable to obtain benefits, and uncertain of their rights. ERISA was designed in part to prevent or minimize such situations by imposing strict deadlines for deciding claims and appeals. When insurers fail to comply, you may be deemed to have exhausted their administrative remedies and can bring a lawsuit against the insurer and plan administrator in federal court rather than continue waiting for a decision on your claim.

Understanding the significance of these deadlines, and how courts have enforced them is essential. The regulations are not optional guidelines; they are mandatory requirements. Federal courts have consistently emphasized that the ERISA regulations require strict compliance and that claimants are entitled to judicial review if administrators fail to act on time.

The Regulatory Framework

ERISA’s claims procedure regulation, 29 C.F.R. § 2560.503-1, sets precise timeframes for resolving disability claims. For appeals of denied disability claims, an administrator must issue a decision within 45 days of receipt of the appeal. Administrators may take up to an additional 45 days, but only in “special circumstances.” Additionally, the administrator must notify the claimant of its need for additional review time before the end of the initial 45 days, and the need must be justified by the circumstances. The intent is clear: disability claimants should not be left in indefinite uncertainty.

The regulations also provide a powerful remedy when administrators fail to comply. Section 2560.503-1(l)(2) states that if a plan fails to establish or follow reasonable claims procedures that comply with the regulations, the claimant “shall be deemed to have exhausted the administrative remedies available under the plan.” This deemed exhaustion rule allows the claimant to immediately file suit under ERISA § 502(a).

Why Timing Rules Matter

The ERISA deadlines reflect the Department of Labor’s recognition that disabled claimants often face financial hardship and medical crises. The Department of Labor explained in its 2016 amendments that strict timing rules “are critical to ensuring a full and fair review” and that violations “undermine the very protections the regulation was designed to provide.” The Department of Labor further emphasized that delays are harmful because they deprive claimants of prompt resolution and can cause significant harm.

This is why courts have been reluctant to excuse missed deadlines. Allowing insurers to delay without consequence would undermine ERISA’s goal of ensuring timely, fair, and transparent claims handling.

One of the most influential cases on this issue is Halo v. Yale Health Plan, 819 F.3d 42 (2d Cir. 2016). The plan administrator denied the plaintiff’s medical benefits and the plaintiff challenged the denial The court emphasized that when a plan fails to comply with the ERISA regulations, courts must apply de novo review unless the plan shows that its violation was both inadvertent and harmless. The court explained:

[W]e hold that, when denying a claim for benefits, a plan’s failure to comply with the Department of Labor’s claims-procedure regulation, 29 C.F.R. § 2560.503–1, will result in that claim being reviewed de novo in federal court, unless the plan has otherwise established procedures in full conformity with the regulation and can show that its failure to comply with the regulation in the processing of a particular claim was inadvertent and harmless.

Id. at 45.

Halo marked a shift away from leniency toward insurers and underscored that if insurers and administrators do not comply with the ERISA regulations, the regulations will be strictly enforced.

The Seventh Circuit reached a similar conclusion in Fessenden v. Reliance Standard Life Insurance Co., 927 F.3d 998 (7th Cir. 2019). Reliance Standard failed to provide a timely decision on the plaintiff’s claim and argued that the delay was minimal and caused no prejudice. The Seventh Circuit flatly rejected this position and held that Reliance Standard forfeited a deferential standard of review by failing to strictly comply with the deadline for issuing final decision.

The court held that the arbitrary and capricious standard:

cannot be applied to an untimely decision because there is nothing to review at the time that administrative remedies are deemed exhausted. There is no explanation for a claimant to read and understand. And if the claimant files suit before the decision arrives, there is neither an exercise of discretion to which a court could defer nor anything for the court to use to measure the degree of the administrator’s compliance.
Id. at 1005 (7th Cir. 2019); See also Jebian v. Hewlett-Packard Co. Emp. Benefits Org. Income Prot. Plan, 349 F.3d 1098, 1104 (9th Cir. 2003) (“[A] contrary rule would allow claimants, who are entitled to sue once a claim had been ‘deemed denied,’ to be ‘sandbagged’ by a rationale the plan administrator adduces only after the suit has commenced.”);  Fed. Power Comm. v. Texaco, Inc., 417 U.S. 380, 394–97, 94 S.Ct. 2315, 41 L.Ed.2d 141 (1974) (acknowledging that the Commission had “great discretion” but explaining that failure to exercise that discretion at the appropriate time cannot be remedied with “post hoc rationalizations” (citation omitted)). The court refused to allow Reliance Standard to benefit from its own delay, recognizing that timeliness is a core component of ERISA’s regulatory scheme.

The Department of Labor’s Position

The Department of Labor has been explicit that missed deadlines are not trivial. In its commentary accompanying the 2018 amendments to the ERISA claims regulations, the Department of Labor explained that the “de minimis exception” is extremely narrow. Timing violations are not de minimis unless they are truly inconsequential, beyond the plan’s control, and non-prejudicial. Examples might include a short delay due to a natural disaster or a computer outage outside the insurer’s control. By contrast, routine procedures by administrators that result in decision not being provided on time are not de minimis and therefore will not be excused.

Practical Implications for Claimants

For claimants, understanding these ERISA rules is critical. If an insurer fails to issue a decision within the required timeframe, the claimant has the right to proceed directly to federal court without waiting for a decision. This prevents insurers from using delay as a tactic to wear down claimants or postpone payment indefinitely.

Understanding these rules has significant strategic value. A claimant can seize control of the process from the insurer or administrator and shift the dispute into a federal forum, where insurers and administrators face judicial scrutiny. Moreover, courts may apply de novo review rather than deferential review when procedural violations occur, further leveling the playing field. De novo review means that the court is looking at the evidence to determine whether it supports the claim, whereas deferential review means that the court looks at the administrator’s decision to determine whether the denial was arbitrary and capricious. De novo review is therefore generally preferable for claimants.

Conclusion

The lesson is clear: insurers must strictly comply with ERISA’s timing requirements. When they do not, claimants may treat their remedies as exhausted and seek immediate judicial relief. Courts have consistently enforced this principle, emphasizing that delays are not harmless and that claimants should not suffer the consequences of insurer inaction.

For claimants and practitioners, vigilance is essential. If your insurer has missed a deadline, you may not need to wait. You may have the right to move directly into federal court and press your claim under ERISA. These protections reflect ERISA’s purpose: ensuring that claimants receive timely, fair, and meaningful review of their claims. Insurers who fail to honor that mandate do so at their peril. If you have a disability claim that needs to be reviewed, call the highly experienced disability insurance lawyers at McKennon Law.

Introduction

When disability insurers terminate benefits without sufficient evidence, federal courts can and do step in to protect claimants. A recent decision out of the U.S. District Court for the District of New Jersey, Vartanian v. First Reliance Standard Life Insurance Company, 2025 WL 2555712 (D.N.J. Sept. 5, 2025), illustrates how courts apply ERISA to ensure claimants receive fair treatment. The Court denied First Reliance’s motion for summary judgment, granted judgment in favor of plaintiff Louise Vartanian, and found the insurer’s termination of her long-term disability (“LTD”) benefits and life insurance waiver was arbitrary and capricious.

This case provides a roadmap for claimants and attorneys fighting wrongful denials of disability benefits, particularly where insurers rely on selective evidence, ignore treating physicians, and fail to justify abrupt reversals of prior benefit approvals.

Factual Background

Louise Vartanian, age 64, had a long career as Executive Director of Corporate/Procurement Services at Sumitomo Mitsui Banking Corporation. Her position required sophisticated cognitive and management skills: vendor governance, regulatory risk reduction, contract oversight, and frequent communication with senior leadership. It was a sedentary but highly demanding role.

In April 2021, Ms. Vartanian stopped working after experiencing fatigue, dizziness, headaches, numbness, and cognitive impairments. She sought treatment from multiple specialists. Cardiopulmonary exercise testing and neuropsychological evaluations confirmed she could not sustain even sedentary work without worsening her symptoms. Her physicians, including Dr. Susan Levine, diagnosed her with Myalgic Encephalomyelitis/Chronic Fatigue Syndrome (ME/CFS) and dysautonomia. Neuropsychologist Dr. Wilfred Van Gorp documented significant cognitive impairments, finding she was “unable to work part-time or full-time” in her role.

First Reliance, the insurer and claim fiduciary, initially approved her LTD benefits in January 2022. It later acknowledged her eligibility for Social Security Disability Insurance (SSDI), which began in October 2021. For over a year, benefits continued. But in May 2023, First Reliance abruptly terminated her LTD claim and denied her waiver of life insurance premiums, citing “no objective findings to validate [her] report of symptoms” and claiming she could perform sedentary work.

The Appeal Process and Lawsuit

Ms. Vartanian appealed internally, providing updated medical records, neuropsychological testing, and additional reports from her treating physicians. First Reliance referred the matter to outside file reviewers, including an internist and a psychiatrist, who concluded she retained the capacity for normal exertional work and showed no psychiatric impairments. Predictably, the insurer upheld its denial in November 2023.

On April 16, 2024, she filed suit under ERISA § 502(a)(1)(B), 29 U.S.C. § 1132(a)(1)(B), challenging the wrongful termination of her LTD and life insurance waiver benefits.

The Standard of Review Debate

A threshold issue was whether the Court should review the denial de novo or under the deferential arbitrary and capricious standard. Although the policies conferred discretion to the insurer, Ms. Vartanian argued that First Reliance exceeded the regulatory deadlines for issuing its appeal decision, which should trigger de novo review.

Judge Georgette Castner held that while ERISA regulations require strict timelines, not every procedural violation is “severe” enough to alter the standard of review. Because Ms. Vartanian could not show prejudice from the insurer’s brief delay, the Court applied arbitrary and capricious review.

Key Legal Rulings

Despite applying a deferential standard, the Court ruled strongly in favor of the plaintiff. Several findings were critical:

Abrupt Reversal Without New Evidence
The Court emphasized that “an administrator’s reversal of its decision to award a claimant benefits without receiving any new medical information to support this change in position is an irregularity that counsels towards finding an abuse of discretion.” Here, the insurer had long possessed the same medical evidence but suddenly deemed it insufficient. As the Court noted, “in the absence of any meaningful evidence to support a change in position, [the insurer’s] abrupt reversal is cause for concern”.
Cherry-Picking Evidence
First Reliance selectively cited Ms. Vartanian’s Activities of Daily Living Questionnaire, noting that she could do light housework, drive locally, and watch television. But the insurer ignored her equally important reports of chronic fatigue, needing frequent naps, confusion while driving, and difficulty with basic tasks. The Court found this “self-serving selectivity” a hallmark of arbitrary and capricious review.
Failure to Address Cognitive Impairments
The insurer’s termination letter discussed only physical limitations and ignored compelling neuropsychological evidence of cognitive decline. Courts have repeatedly held that “an administrator’s failure to address all relevant diagnoses in terminating a claimant’s benefits is cause for concern.” Here, the omission weighed heavily against First Reliance.
Reliance on Non-Treating Physicians
While ERISA does not require special deference to treating physicians, the Court criticized First Reliance for rejecting the consistent opinions of Ms. Vartanian’s specialists in favor of paper reviews by non-examining consultants. The Court noted the insurer failed to provide a reasonable basis for disregarding the doctors who had observed and treated the claimant over time.
Disregard of Social Security Award
Although not binding, Ms. Vartanian’s award of SSDI benefits was relevant. The Court noted the insurer failed to meaningfully reconcile its contrary decision with the SSA’s finding of disability, instead dismissing the award as based on “different guidelines.” Courts frequently consider such dismissals further evidence of bias and arbitrary decision-making.

The Court’s Holding

Judge Castner denied First Reliance’s motion for summary judgment and granted Ms. Vartanian’s motion for judgment. The Court ordered her LTD and life insurance waiver benefits reinstated, finding that First Reliance’s termination was unsupported by substantial evidence and therefore arbitrary and capricious.

This ruling reinforces the principle that ERISA insurers cannot terminate benefits without clear, new, and meaningful evidence showing a claimant’s condition has improved. As the Court explained, payment of benefits does not estop an insurer from later terminating them, but any reversal must be grounded in objective, material evidence—not selective readings or file reviews divorced from the treating record.

Broader Implications

This case has several important takeaways for disability claimants and practitioners:

Consistency Matters: Insurers cannot rely on the same type of medical evidence to approve benefits for years, then later deem it insufficient to terminate benefits. Courts will view such reversals with skepticism.
Cognitive Evidence is Critical: For professionals in cognitively demanding jobs, neuropsychological testing can be decisive. Failure to evaluate cognitive impairments can render a denial arbitrary.
Social Security Awards Should Be Considered: While not binding, SSA findings of disability often strengthen a claimant’s case and highlight insurer bias when disregarded.
Paper Reviews Have Limits: Courts scrutinize insurers that rely on non-treating consultants over consistent treating physician opinions, particularly where the file reviewers ignore objective testing or clinical findings.
Procedural Violations Influence Outcomes: Even if not “severe” enough to alter the review standard, missed deadlines or inadequate explanations add weight to the arbitrary and capricious analysis.

Conclusion

Vartanian reaffirms courts’ willingness to intervene when insurers terminate disability benefits without adequate evidence. By granting judgment for the plaintiff, the Court sent a clear message: insurers must base their decisions on the totality of the medical record, including cognitive demands of the occupation and treating physician assessments. Selective reviews and abrupt reversals will not withstand judicial scrutiny.

At McKennon Law, we fight for employees and executives like Ms. Vartanian who have been unfairly denied the disability, life, accidental death insurance or health insurance benefits they rightfully earned. If your insurer has wrongfully terminated or denied your claim, our experienced ERISA attorneys can help you pursue the benefits you deserve.

Long-term disability (“LTD”) and life insurance benefit disputes under the Employee Retirement Income Security Act of 1974 (“ERISA”) frequently hinge on complex medical questions and policy interpretations. However, another layer of complexity arises when fiduciaries—such as plan administrators or employers—make misleading statements or omit material information about a participant’s benefits. The recent decision in Erban v. Tufts Medical Center Physicians Organization, Inc., 2025 WL 2319055 (D. Mass. July 23, 2024), offers a clear example of how courts are increasingly willing to allow claims of fiduciary breach and the equitable remedy of surcharge to proceed when plaintiffs plausibly allege that they were misled.

Background of the Dispute

Plaintiff Lisa Erban is the surviving spouse of Dr. John Erban, a respected oncologist and hematologist who dedicated over 30 years of service to Tufts Medical Center. Dr. Erban’s distinguished medical career ended abruptly on August 14, 2019, when he sought emergency medical care and was diagnosed with an aggressive and malignant brain tumor. He underwent emergency surgery the following day and began a medical leave of absence under the Family and Medical Leave Act. Due to the severity of his condition, Dr. Erban was unable to return to work, and Tufts formally terminated his employment on February 12, 2020. Tragically, Dr. Erban succumbed to his illness on September 2, 2020, at the age of 65.

This ERISA breach of fiduciary duty lawsuit arises from the denial of $801,000 in basic and supplemental life insurance benefits under a policy issued by Hartford Life & Accident Insurance Company through Tufts’ employee benefits plan. Ms. Erban sued three defendants: Tufts Medical Center Physicians Organization, Inc. (Dr. Erban’s employer); the named ERISA plan administrator, Tufts Medical Center Physicians Organization (“TMCP “); and Nicholas Martin, the Director of Human Resources at Tufts, who had direct communications with the Erbans concerning Dr. Erban’s employment benefits. Plaintiff’s main allegation was that Defendants breached their fiduciary duties under ERISA by failing to inform her that she could continue Dr. Erban’s group life insurance coverage after he stopped working due to illness. Had she known, she alleged, she would have taken the necessary steps to preserve his coverage through the final months of his life.

Defendants responded that they had no such duty because no continuation right existed under the Plan. Defendants filed a motion to dismiss the breach of fiduciary duty and equitable estoppel claims.

Fiduciary Status Under ERISA

The court denied in part the defendants’ motion to dismiss, allowing Plaintiff’s claims for breach of fiduciary duty and equitable estoppel to proceed. Specifically, Judge William G. Young found that TMCP’s and Martin’s alleged misrepresentations—particularly repeated statements that Dr. Erban was eligible for life insurance coverage—were sufficient to plausibly allege a fiduciary breach.

The court first addressed whether Defendants were fiduciaries and if they were, were they acting as fiduciaries when they misrepresented benefits. Under ERISA, individuals or entities may be deemed fiduciaries either by being explicitly named in the plan or functionally, based on their conduct. While plan administrators are typically named fiduciaries under 29 U.S.C. § 1102(a), courts recognize “functional fiduciaries” under 29 U.S.C. § 1002(21)(A) when a person exercises discretionary control over plan management or administration. As the court explained, a person may be a fiduciary “for some purposes and not for others.” This determination hinges on whether the person was performing a fiduciary function when taking the action at issue.

The court found that Nicholas Martin, Tufts’ HR Director, functioned as a fiduciary when he guided the Erbans through the life insurance benefits process. Despite Defendants’ argument that Martin’s role was purely ministerial, the court held that Martin “affirmatively assumed the role of guiding the Erbans,” provided forms, explained benefit options, and made representations about the impact of Dr. Erban’s employment ending. Because Martin knew about Dr. Erban’s medical condition and acted as the primary source of information about benefits, the court concluded he was acting as a fiduciary in those communications. As the court explained, quoting Varity Corp. v. Howe, 516 U.S. 489 (1996), fiduciaries may be liable when they mislead beneficiaries while “answer[ing] beneficiaries’ questions about the meaning of the terms of a plan so that those beneficiaries can more easily obtain the plan’s benefits.”

Breach of Fiduciary Duty

Plaintiff alleged that Defendants breached their fiduciary duties under ERISA by failing to inform her that she could continue Dr. Erban’s group life insurance coverage after he stopped working due to illness. Two Plan provisions controlled the question. First, the Continuation Provision specifies that coverage “can be continued by Your Employer beyond a date shown in the Termination provision, if Your Employer provides a plan of continuation which applies to all employees the same way.” Second, the Sickness or Injury Provision states in relevant part that if a participant is not working “due to sickness or injury, all of [his] coverages … may be continued: 1) for a period of 12 consecutive month(s) from the date [he was] last Actively at Work.” (Emphasis original)

Because Martin never informed the Erbans of the continuation option, including when Plaintiff specifically asked Martin if she could “just private pay” their current life insurance plan, the court held that:

Defendants breached their fiduciary duty to provide accurate and complete information. See Watson, 298 F.3d at 114 (explaining that in some circumstances, a fiduciary must “accurately convey material information to beneficiaries”); Brenner, 2015 WL 1307394, at *1 (same); see also In re Unisys Corp. Retiree Med. Benefit ERISA Litig., 57 F.3d 1255, 1264 (3d Cir. 1995) (recognizing a duty “not to misinform employees through material misrepresentations and incomplete, inconsistent or contradictory disclosures”).

The court then held that Section 1132(a)(3) permits ERISA plaintiffs to seek surcharge against a fiduciary. For these reasons, Ms. Erban successfully convinced the court that defendants breached their fiduciary duties to her and her late husband regarding the continuation and supplemental life insurance conversion claims, and that surcharge damages in the full amount of the policies was available to her to remedy this harm

Distinguishing Benefits Denial from Fiduciary Misconduct

What distinguishes Erban from more typical life insurance denials is the court’s acknowledgment that fiduciary breach claims serve a different purpose from benefit recovery claims. While Section 1132(a)(1)(B) focuses on enforcing the terms of the plan, Section 1132(a)(3) “provides equitable remedies for other forms of misconduct.” Here, Plaintiff’s fiduciary breach and estoppel claims were not based solely on the denial of benefits, but rather on affirmative misrepresentations made by TMCP and Martin.

Conclusion

Erban v. Tufts Medical Center Physicians Organization is a strong reminder that ERISA litigation is not limited to the plain terms of a benefits policy. Fiduciaries must act with care, clarity, and consistency when advising employees about benefit coverage. They have a duty to discuss conversion of the plans with plan participants and to make truthful statements about them. The failure to notify can be as legally potent as a failure to accurately represent. Missteps—even if well-intentioned—can expose them to liability beyond the underlying denial of benefits.

If you believe you were misled about your benefits coverage or have had a disability or life insurance claim wrongfully denied, McKennon Law has the experience and expertise to help you evaluate your ERISA rights and remedies.