If so, the recent decision of Raybourne v. CIGNA Life Ins. Co., highlights the structural conflict of interest a LTD carrier such as CIGNA operates under in making a LTD determination.
The recent decision of Raybourne v. CIGNA Life Ins. Co. ___F 3d ___ (7th Cir. 2012) decided Nov. 21, 2012, emphasizes the role of conflict of interest and a favorable SSA decision in an ERISA LTD analysis. Despite denying benefits to the Plaintiff, Cigna encouraged him to apply for Social Security disability benefits through its consultant, Advantage. Advantage represented to the SSA that Mr. Raybourne was disabled and Mr. Raybourne received a favorable SSA determination. Cigna recouped payments it made to Mr. Raybourne during his initial period of disability from the SSA award and then denied his subsequent appeals for long-term disability benefits. In denying benefits to Mr. Raybourne, Cigna failed to provide a reasonable explanation for crediting the opinion of a non-examining, in-house physician, who determined that Mr. Raybourne was not disabled, over the opinion of Mr. Raybourne’s treating physician or over the credibility finding of the ALJ, both of which were supported by substantial medical evidence documenting the source of Mr. Raybourne’s pain. The Court found:
“Under Glenn, a court may use a structural conflict of interest to break a tie in a close case ‘where circumstances suggest a higher likelihood that it affected the benefits decision.’ 554 U.S. at 117. See also Jenkins v. Price Waterhouse Long Term Disability Plan, 564 F.3d 856, 861-62 (7th Cir. 2009)(under Glenn, where the case is borderline, the inherent conflict of interest can push the analysis over the edge towards finding that the administrator’s decision was capricious). Such appears to be the case here, and like the district court, we conclude that Cigna’s denial of benefits was not supported by substantial medical evidence but instead was the result of a structural conflict of interest.” (p. 25-26)
In this case, by properly factoring conflict of interest into the review, it appears that the Court has taken a step in curtailing the common practice of LTD carriers of ignoring evidence supportive of disability without explanation. If you currently use Allsup, Advantage or Crowe Paradis to help secure Social Security benefits make sure they work for you and not the insurance company.
If you have any questions about long term disability please give us a call or visit our LTD benefits page for more information.