The Sixth Circuit recently reversed a twelve-month mental disorder limitation against Reliance Standard adopting the “but-for” approach for Mental and Nervous Disorder Limitations of the Fifth, Ninth, and Third Circuits. Okuno v. Reliance Standard Life Ins.Co. Ms. Okuno was approved solely for mental disorder benefits for her auto-immune disease and narcolepsy due to the fact that she exhibited a psychiatric component that “contributed to” her physically disabling conditions. The Sixth Circuit found that a “reasoned and deliberate” review for these circumstances is to assess the physical disability separate from the mental or nervous disorder and concluded denying benefits on the basis a mental disorder contributes to a physical condition is inappropriate.
The court went further in disparaging Reliance’s denial for Ms. Okuno’s physical disabilities because it its inherent conflict of interest is readily apparent based on their file. The court noted that file reviews by paid employees of the insurance company, without physical examinations “raises questions about the accuracy of the benefits determination.” Shaw v. AT&T Umbrella Ben. Plan No. 1, 795 F.3d 538, 550 (6th Cir.). Ms. Okuno did not even claim a mental disorder in her application; however, Reliance denied her claim based on a mental disorder, which the court found “necessitated further review” beyond exclusively relying on file reviews. Reliance also acted arbitrarily in denying benefits without consulting a mental health expert. Prior decisions of this court suggest that failure to consult with a specialist on the condition the entire denial was based on is improper. Also, Reliance improperly denied Ms. Okuno by failing to consult the insured’s treating physicians. The Court held although no special deference is required to be given to treating physicians, there cannot be a total refusal to consider those opinions. Finally, the differing rationales from each of Ms. Okuno’s denials showed direct evidence that Reliance’s denial was arbitrary and capricious.