The case of Lani Kyle Moar v. Cigna Corporation, et al., demonstrates the lengths insurance companies will go to avoid paying long term disability benefits. This Plaintiff’s perseverance resulted in the Court ordering Cigna to pay past due benefits, but also gave Cigna a new chance to deny benefits in a way that will not be arbitrary and capricious.
It began in 2000 when Plaintiff, a flight attendant with United Airlines, was first awarded long term disability benefits when she developed lupus and congestive heart failure. Initially, she received benefits for 24 months when Cigna found she was disabled from working in her own occupation. Benefits continued even after the definition changed and Cigna agreed she was disabled from working in any occupation for which she was qualified.
In conjunction with Cigna paying her long term disability benefits, another policy issued by a company under the Cigna umbrella, also found she was eligible to maintain her life insurance policy, but not have to pay premiums under a waiver of premium (WOP) benefit for those found to be disabled.
Everything went well until March 2012 when Cigna terminated all benefits under both policies. On administrative appeal, after reviewing all medical records and conducting a three-day surveillance, both long term disability benefits and the WOP benefit were reinstated. This lasted until September 2015 when, once again, Cigna terminated all benefits. Her administrative appeal was denied and she filed this ERISA lawsuit.
The U.S. District Court for the Eastern District of Michigan ruled that the decision to terminate benefits was arbitrary and capricious and ordered the defendants to “pay Plaintiff any past-due benefits and commence paying the quarterly waiver of premium benefit and the monthly LTD benefit.”
Cigna’s Termination of Benefits was Arbitrary and Capricious
The Court did an in depth review of Plaintiff’s medical records and the reports of Cigna’s reviewing doctors and commented that “the case turns almost entirely on which doctors’ opinions should be privileged.” The Court also determined that Cigna’s reviewing physicians overlooked the conclusions that the Plaintiff’s lupus interfered with her ability to work, indicating the “denial was arbitrary.”
The Court acknowledged that “an insurer may change a disability determination based on [medical records], even if the claimant has received benefits for a long time… But, there must be a reason for the change.” In this case, there was “very little” to indicate that anything changed and that Plaintiff was no longer disabled.
The Court concluded that the reviewing doctors considering Plaintiff’s long-term disability benefits and her WOP benefit “relied on a fraction of the relevant medical evidence and failed to acknowledge the fluctuations that Moar’s lupus created. For those reasons, the denial was arbitrary and capricious.”
The Court ordered Cigna to pay Plaintiff past-due benefits. Unfortunately, the Court concluded that its ruling “does not confirm that Moar is or was disabled under the policies. Rather, the Court finds only that the decisions to deny Moar’s benefits were arbitrarily and capriciously made.” It essentially gave Cigna another opportunity to further review whether or not Plaintiff is still entitled to benefits.
This case was not handled by our office, but we feel it can be instructive to those who have received long term disability benefits and suddenly find themselves cut off by their disability insurer. For questions about this case, or any aspect of your disability claim, contact our disability attorneys at Dell & Schaefer for a free consultation.