New Jersey Disability Claimants Will Benefit From New Law

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New Jersey joins Pennsylvania as a state in the Third Circuit and benefits when a PA case is successful before the Third Circuit. A case in point is Kosiba v. Merck & Co. which found that Unum acted arbitrarily and capriciously in denying benefits to a claimant suffering from fibromyalgia and sarcoidosis. Kosiba v. Merck & Co., 2011 U.S. Dist. LEXIS 23247 (D.N.J. Mar. 7, 2011).

Kosiba addressed the Third Circuit’s stance on issues such as scope of review, structural conflict, procedural conflict, selective consideration of medical history, financial conflict of interest, and remedy.

Following our Supreme Court’s decision in Metropolitan Life Insurance Co. v. Glenn, the Court gave significant weight to Defendants’ “reversal of position”, “failure to address one or more of the diagnosis(es) and Defendants’ failure to consider the claimant’s objective functional capabilities.

The Court in Kosiba noted: “Rather than an initial disability determination, we are faced here with a situation where Defendants found [Plaintiff] totally disabled once, then sought to revisit the determination anew two years later, requiring her to provide entirely new information. Defendants then disregarded the historical medical record, including the portions that led to their own first finding of total disability. When [Plaintiff] provided her doctors’ opinions that she was still disabled, Defendants chose to ignore them, and the other information that established her disability the first time, without any supporting information to the contrary. [The IME] opinion obtained during the appeal stage was helpful, but it did not comprise substantial evidence because it failed to address all of her ailments and did not address her functional capabilities.”

Viewing the various factors as a whole, the Court found that Defendants’ decision to terminate Plaintiff’s LTD benefits was not the product of reasoned decision-making and substantial evidence. Rather, the numerous procedural irregularities led them to conclude that Defendants’ termination of Plaintiff’s benefits was arbitrary and capricious. Kosiba 2011 U.S. Dist. LEXIS 23247 (D.N.J. Mar. 7, 2011).

Adopting the Glenn rationale regarding financial pressures to deny claims, the Court noted that “Where an employer makes fixed contributions to a plan, evaluates claims, and pays claims through a trust…[e]ven in an actuarially grounded plan, the employer provides the monetary contribution and any money saved reduces the employer’s projected benefit obligation.”

This case will prove an important landmark for the clients of Bonny G. Rafel because the financial conflicts of insurers plainly influence their decisions and new our Courts will permit discovery on how the conflicts impaired the fair judgment on our cases for our disabled clients in New Jersey.