New Evidence During an Appeal Under ERISA
In the administrative period, insurers governed by ERISA are required to disclose to a claimant, under 29 C.F.R. 2560.503-1(m)(8), all documents (e.g., a medical report) relevant to an applicant's claim for benefits, where “relevant” documents are defined under 29 U.S.C. § 1024(b)(4).
However, court opinions are divided as to whether insurers are required to disclose to a claimant documents that are considered “new evidence,” such as reports from medical or vocational consultants, when those documents are generated during the pendency of an appeal.
Important to this question are the Department of Labor's (DOL) amended disability claims procedure regulations, which became effective on April 1, 2018. They require disclosure during the appeal of an adverse benefit determination. 29 C.F.R. § 2560.503-1.
Accordingly, under the amended regulations, ERISA governed plans must provide to an appealing claimant, as soon as possible and sufficiently in advance of an adverse benefit determination, any new evidence that an insurer may have during the pendency of an appeal in order to give the claimant a reasonable opportunity to address the evidence prior to a final benefit determination.
In its analysis, the DOL disagreed with a frequently voiced concern that its amendment would create an “endless loop” of review and re-review by noting that this has not been the case with group health claims under the Affordable Care Act (ACA). Moreover, there would be no “endless loop” of new evidence because claimants are limited to the evidence already in the medical record, and plans would make a benefit decision when they had adequate evidence to properly decide the claim.
In the Ninth Circuit, the leading case is Salomaa v. Honda Long Term Disability Plan, 642 F.3d 666, 679-680 (9th Cir. 2011), where the court held that “by denying Salomaa the disclosure” and “access to the two medical reports of its own physicians upon which it relied … the plan denied him the statutory obligation of a fair review procedure.”
The opinion in Salomaa and the DOL's amendment appear to have put to rest prior opinions to the contrary, including Silver v. Exec. Car Leasing Long-Term Disability Plan, 466 F.3d 727, 732 n.2 (9th Cir. 2006), which held that “in order for UNUM to evaluate Silver's administrative appeal fairly, it had to wait until Silver had submitted all of his materials; for UNUM to do otherwise would either undermine Silver's ability to present all of his supporting information or lead to an interminable back-and-forth between the plan administrator and the claimant”. See also: Leon v. Quintiles Transnational Corp., 300 F. App'x 558, 560 (9th Cir. 2008) (in order for an insurer to evaluate an appeal fairly, it must wait until the claimant submits all its materials, otherwise there would be "interminable back-and-forth" between the administrator and claimant); Midgett v. Wash. Group Int'l Long Term Disability Plan, 561 F.3d 887 (8th Cir. 2009); Glazer v. Reliance Standard Life Ins. Co., 524 F.3d 1241 (11th Cir. 2008); and Metzger v. UNUM Life Ins. Co. of Am., 476 F.3d 1161 (10th Cir. 2007).
A court decision in 2019, after the DOL's amendment, held that a “full and fair review,” guaranteed by ERISA, requires that the insurer provide plaintiff an opportunity to respond to new evidence during the appeal and prior to issuing an adverse benefits determination. Hughes v. Hartford Life & Accident Insurance Company, 368 F. Supp. 3d 386 (D. Conn. 2019) (The plan had a “duty to disclose new evidence on appeal,” and its refusal to turn-over the physician's report violated Hughes' right to a “full and fair review.”).
We can expect more court decisions that interpret the DOL's amendment. However, for now there is reason to believe that an insurer may be required to disclose all relevant documents that it possesses in both the administrative period (while making an initial benefit decision) and in the pendency of an appeal.
ERISA law is complicated and ever-changing. We at Law Med are ERISA-knowledgeable and experienced.