Court Clears Disability Plan in Benefits Termination

July 18, 2008 ( - A federal judge in Michigan has cleared a disability plan administrator of wrongdoing on the decision to cut off a participant's long-term benefits after finding the participant did not have enough proof she couldn't perform her job.

U.S. District Judge Thomas L. Ludington of the U.S. District Court for the Eastern District of Michigan ruled that the plan had based its ruling on a functional capacity exam and video surveillance. That input was contrary to the employee’s own doctor, who said she had too much back pain to do her job as a loan coordinator for a bank.  

Noting that the case record contained objective medical evidence that Melissa L. Reed suffered from degenerative disc disease, Ludington said there was not any objective evidence about how the problem impacted her ability to do her job.

Ludington said her employer-sponsored plan’s administrator, Hartford Life and Accident Insurance Co., reasonably found that Reed’s treating physician’s opinion regarding her functional limitations were based on her complaints. For example, Reed submitted reports from her treating physician’s physician assistant that indicated she could not bend at the waist or sit for long periods of time, among other things.

Ludington said the video surveillance showed several inconsistencies between Reed’s functional abilities and her doctor’s opinions of her limitations. Hartford conducted video surveillance of Reed that showed her bending at the waist multiple times and driving a car for almost two hours.

The case is Reed v. Independent Bank Corp.,E.D. Mich., No. 07-12518, 7/16/08.