This ERISA case challenges a plan administrator’s denial of benefits. Heron alleges that the decision to end his long-term disability benefits after an initial two year period violated 29 U.S.C. Section 1132(a)(1)(B). Exxon filed a motion for summary judgment which was granted by the Court.
Heron is a 60 year old man who suffers from a variety of illnesses. He worked in the procurement department at Exxon where he negotiated and managed worldwide material and services agreements. The Plan covering him divided benefits into two periods, the first is the period that begins on the last day the person was actively at work, and ends two years later. In this first period, an individual is incapacitated “if the person is wholly and continuously unable, by reason of physical or mental health impairment, to perform any work suitable to the person’s capabilities, training and experience, that the person’s employer has available during the initial period, and such inability to perform work is expected to continue for … at least six months form the date the person’s ability to perform work is determined.” After the initial two year period, an individual is incapacitated “if the person is wholly and continuously unable, by reason of a physical or mental health impairment, to perform any work for compensation or profit for which the person is or may become reasonably fitted by education, training or experience, and such inability to perform work is expected to continue for … at least six months from the date the person’s ability to perform work is determined.” In the initial period, the definition of incapacitated looks only to the ability to perform any work that the person can do or reasonably could do with training.
The Plan administrator looked at medical records after the initial two years and determined that Heron was capable of doing some work based on those records which stated that Heron could work but with time and work load limitations.
In looking at the law, this Court pointed out that it’s job is to review the plan administrator’s decisions de novo, unless a different standard is provided in the plan documents. If plan documents expressly give the plan administrator the authority to determine benefits and construe the plan terms, as the Exxon Plan does, the standard of review is abuse of discretion.
A plan administrator abuses its discretion where the decision is not based on evidence, even if disputable, that clearly supports the basis for its denial. As long as the plan administrator’s decision is not arbitrary or capricious and is supported by substantial evidence, it will prevail. The plan administrator’s decision is arbitrary only if made without a rational connection between the known facts and the decision or between the found facts and the evidence. Substantial evidence is more that a scintilla, less than a preponderance. Is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. Under the abuse of discretion standard, a court’s review of the administrator’s decision need not be particularly complex or technical, it need only assure that the administrator’s decision fall somewhere on a continuum of reasonableness — even if on the low end.
Based on the above, the plan administrator’s decision was upheld.