© 2014 by Michael A. McKuin

Attorney at Law

Post Office Box 10577

Palm Desert, CA 92255

(California State Bar No. 103328)


The information provided at this website is intended for educational and promotional purposes only. It is strictly general in nature and under no circumstance should it be considered legal advice.  Every case is unique and a competent, qualified lawyer must be consulted for legal advice regarding any specific case. 


If You Don't Know the Process, You'll Forfeit Valuable Rights
By: Michael A. McKuin

Revised:  December 2014

Before you can understand and appreciate ERISA  it’s important to first understand just what an "administrative record" is and how it works in an ERISA case. This is because insurance companies and claims administrators are very savvy in using that record to defeat legitimate disability claims.  Insurers use devices such as “peer review” reports, "Independent Medical Exams" and "Transferrable Skills Analysis" reports to "paper" that record. (See article:  The IME / TSA Swindle).


The "administrative record" is basically anything that the insurer or administrator looks at in reaching its final decision regarding whether a claim will be paid or not. It generally includes medical records, reports, bills submitted by the claimant and any claim-related correspondence. But it may also include any internal reports of the plan's own reviewing physicians and vocational consultants, which are nothing more than self-serving documents, generated by the insurance company itself.

The reason the "administrative record" is so important is because if a lawsuit is filed, the court's review will generally be limited to that "administrative record". Seldom will a court allow evidence to be introduced that is outside the scope of the "administrative record".  In fact, only under very narrow circumstances is the court even permitted to take evidence outside that record.

Another reason the "administrative record" is so critical is because if the insurer plays its cards right, the standard of judicial review in an ERISA case will be the Deferential Standard of Review. Under that standard, the issue before the court is NOT whether the administrator or insurer was "right" or "wrong" in denying the benefit claim. Instead, the issue is whether denial of the claim was "arbitrary and capricious" or an "abuse of discretion", based upon the evidence in the "administrative record". As long as the denial was not "clearly erroneous", it may be upheld by the court. As long as denial is supported by "substantial evidence" in the "administrative record", it will not be held "clearly erroneous".  See: Hangarter v. Provident Life and Accident Insurance Company 373 F.3d 998 (9th Cir., 2004) (applying substantial evidence test); and see:  Roth v. The Prudential Insurance Company Of America 752 F.Supp.2d 1160 (DC, Oregon, 2010)  (applying substantial evidence test, citing: Snow v. Standard Ins. Co., 87 F.3d 327, 332 (9th Cir.1996), overruled on other grounds by Kearney v. Standard Ins. Co., 175 F.3d 1084 (9th Cir.1999) (en banc) (quoting Maynard v. City of San Jose, 37 F.3d 1396, 1404 (9th Cir.1994)). "Substantial evidence" is a nebulous term. It has been described as "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion."  Richardson v. Perales 402 U.S. 389, 401, 28 L. Ed. 2d 842, 91 S. Ct. 1420 (1971). It "does not mean a large or considerable amount of evidence." Pierce v. Underwood, 487 U.S. 552, 565, 108 S. Ct. 2541, 2550, 101 L. Ed. 2d 490 (1988). See: Podolan v. Aetna Life Ins. Co. 909 F. Supp. 1378, 1386 (1995). It requires "more than a scintilla but less than a preponderance". Sorenson v. Weinberger, 514 F.2d 1112, 1119 n.10 (9th Cir. 1975). 


Some decisions have even gone so far as to hold that benefit denials need not be based on substantial evidence.  All that is required is that a denial be grounded in "any reasonable basis".  See, e.g. Jordan v. Northrop Grumman Corp. Welfare Benefit Plan, 370 F.3d 869, 875 (9th Cir.2004).  ("a decision ‘grounded on any reasonable basis’ is not arbitrary and capricious, and that in order to be subject to reversal, an administrator’s factual findings that a claimant is not totally disabled must be 'clearly erroneous.'")

You could call this "playing against a stacked deck". It bears repeating that under the deferential standard of review, a decision of an administrator or insurer can be upheld, even if it is technically wrong, as long as it is supported by evidence found in the administrative record. What that means is that a knowledgeable administrator or insurer can quietly and secretly "build a record", by slowly assembling enough evidence to meet either the "substantial evidence" or "any reasonable basis" test. It can then deny or cut off benefits, in almost any LTD case, rendering promised future benefits a nullity.

ERISA Disability Lawyer