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The Impact of Social Security Awards on ERISA: W.D. Okla.

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  • The Impact of Social Security Awards on ERISA: W.D. Okla.

    In a recent opinion from Oklahoma, the court takes a strong stance to insurance companies giving "mere lip service" to a plaintiff's social security award. The short decision below illustrates the court's sentiments:

    Upon de novo review of the administrative record, the Court finds that Lincoln’s decision to terminate Clark’s LTD benefits should be overturned and the matter remanded on the narrow grounds stated below. As noted supra, Clark applied for—and received—Social Security Disability Benefits (SSD) from the Social Security Administration (SSA). In this regard, Lincoln correctly notes that an award of SSD benefits is not necessarily determinative of a benefit claim under ERISA because there are “critical differences” between the social security disability program and ERISA benefit plans. See Def.’s Resp. Br. at 20 (citing Black & Decker Disability Plan v. Nord, 538 U.S. 822, 832 (2003)). “But even if the SSA’s determination is not dispositive, it is still persuasive evidence that [Clark] is, in fact, unable to work.” Krum v. Hartford Life & Acc. Ins. Co., 942 F. Supp. 2d 1171, 1180 (D. Utah 2013). Lincoln gives mere lip service to the social security award in its letters denying Clark’s appeal, simply noting the procedural difference between the two schemes (R. at 179, 205). Indeed, the two proceedings are different; however, as one sister court observed, “the disability standard applied by the SSA is not an easy one. To qualify for SSD benefits, [Clark] had to demonstrate that she was unable, ‘considering her age, education and work experience, [to] engage in any other kind of substantial gainful work which exists in the national economy, regardless of whether such work exists in the immediate area in which she lives.’” See id. (citing 42 U.S.C. § 423(d)(2)(A)). Accordingly, “while [Lincoln] may reasonably believe that a person meeting the Social Security Disability standard does not necessarily meet the any occupation standard under its … Policy, its failure to offer any explanation
    of why it believes this statement is true for [Clark’s] case is a factor counseling reversal.” Krum, 942 F. Supp. 2d at 1181. As further observed by the Krum court, a plan administrator’s failure to consider a disability finding from the SSA is a factor supporting reversal. Id. Here, the record is devoid of any substantive consideration by Lincoln of Clark’s SSD award. Accordingly, the Court remands this matter to Lincoln for further explanation of its denial of Clark’s LTD benefits, to include further consideration of her SSD award. Remand is appropriate where a plan administrator fails to adequately explain the grounds for its decision.
    The full opinion is attached below.
    Attached Files
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