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Several Pitfalls Claimants Face Trying to Obtain Disability Benefits

A recent Decision from the Sixth Circuit Shows how the ERISA Framework Favors the Administrator in Several Ways:  In Frazier v. LINA, U.S. App. LEXIS 16078; 2013 FED App. 0206P, decided August 5, 2013, (6th Cir.), the Sixth Circuit affirmed the trial court’s grant of summary judgment in favor of Life Insurance Company of North America against paying disability benefits to the plaintiff.  Several holdings from this opinion demonstrate the uphill battle claimants face in receiving benefits that are subject to ERISA.  First, the Court held that a Plan document could contain the needed language to provide the administrator “discretion.”  Second, if there is such discretion then the review is under the arbitrary and capricious standard and the insurance company only need assert a rational basis for its holding. Third, although LINA had the claimant apply for SSDI benefits with the assistance of Allsup, Inc., the plaintiff had no claim against LINA after Allsup abandoned the SSDI claim, and even though plaintiff received a favorable award from SSDI, LINA did not have to consider that evidence because it was received after it rendered its final denial.  This latest decision highlights several of the pitfalls claimants face in trying to obtain disability benefits governed by the ERISA regime.