Robinson v. Aetna Life Ins. Co.

1

LAVERNE ROBINSON, Plaintiff, v. AETNA LIFE INSURANCE COMPANY, and MONDELEZ GLOBAL LLC EMPLOYEE-PAID GROUP BENEFITS PLAN Defendants.

No. 20-CV-4670

United States District Court, N.D. Illinois, Eastern Division

February 16, 2023

MEMORANDUM OPINION AND ORDER

REBECCA R. PALLMEYER United States District Judge

Plaintiff Laverne Robinson brings this suit against Aetna Life Insurance Company (“Aetna”) and Mondelez Global LLC Employee-Paid Group Benefits Plan (“the Plan”) for unpaid long-term disability (“LTD”) benefits under Section 502(a)(1)(B) of the Employee Retirement Income Security Act of 1974 (“ERISA”). Robinson, a former Mondelez employee is eligible to receive benefits under the Plan, for which Aetna serves as the disability claims administrator (“DCA”). To qualify for the Plan's LTD benefits for more than 24 months, Robinson needed to “be receiving” Social Security Disability Insurance (“SSDI”) from the Social Security Administration (“SSA”) by October 29, 2018. Robinson did not meet that deadline, but, in March 2020, the SSA awarded Robinson SSDI retroactively effective as of October 1, 2016. Per Aetna's interpretation of the Plan this retroactive award made no difference: Because she was not receiving SSDI on October 29, 2018, Robinson was ineligible for further payment. Robinson claims Aetna's interpretation violates ERISA.

The parties have filed cross-motions for summary judgment [50 53]. Robinson contends that Aetna's interpretation is arbitrary and capricious because it fails to account for Robinson's retroactive SSDI award [52]. Defendants argue that Aetna's interpretation is reasonable and that Robinson's claim is time-barred [56]. For the reasons discussed below, the court grants Robinson's motion for summary judgment and remands the case to Aetna to determine whether, apart from the timing of her SSDI award, Robinson is otherwise eligible for benefits under the Plan.

BACKGROUND

I. Mondelez Global LLC Long-Term Disability Plan Provisions

For 24 years, Plaintiff Laverne Robinson worked as a utility machine operator at Mondelez Global LLC (“Mondelez”), a snack food company. (Pl.'s Rule 56.1 Statement of Material Facts [51] (“PSOF”) ¶ 2; Administrative Record [54-1-8] (“ALIC”) 0057.) Robinson, a union member, was eligible for benefits as outlined in the Mondelez Global LLC Long-Term Disability Plan SPD [Summary Plan Description] For Union Hourly Employees (as amended and restated effective as of January 1, 2012) (“the SPD”). (PSOF ¶ 1; ALIC 2063-90.) The SPD's terms, incorporated in the Plan by specific reference (PSOF ¶ 5; Defs.' Rule 56.1 Statement of Material Facts [55] (“DSOF”) ¶ 4), establish the following requirements for LTD coverage:

For the First 30 Months (first 24 months of LTD) of Disability

“Own Occupation” Disability (applies for the entire A&S^[1]period and for the first 24 months of LTD):

For the first 30 months of a disability period (6 months of A&S and the first 24 months of LTD), you will be considered disabled under the LTD Plan if, due to a physical or mental impairment caused by Injury or Sickness:

• You are continuously unable to perform he Material or Substantial Duties of your Own Occupation

AND

• You are not Gainfully Employed except for partial disability or rehabilitative employment for which you have Disability Earnings

AND

• You are receiving Appropriate and Regular Care for Your Condition from a Doctor whose specialty or expertise is the most appropriate for your disabling condition(s) according to Generally Accepted Medical Practice. The care provided to you should be of demonstrable medical value for your disabling condition(s) and should continue until Maximum Medical Improvement is achieved and thereafter as is appropriate.

After 30 Months of Long Term Disability

“Any Occupation” Disability (applies after the end of the “Own Occupation” disability period):

After you have been determined by the DCA to have been disabled under the LTD Plan for 30 months, (the 6 month period followed by the initial 24 months of LTD) you will be considered disabled for LTD Plan purposes if, due to a physical impairment caused by an Injury or Sickness the DCA determines that:

• You are continuously unable to engage in Any Occupation that provides you with a salary of at least 60% of your Pre-Disability Earnings, and exists within your geographical area

AND

• You are not Gainfully Employed, except for partial disability or rehabilitative employment for which you have Disability Earnings

AND

• You must be receiving Social Security Disability Income (SSDI) benefits by the end of your 24th month of LTD in order to be considered disabled for LTD purposes beyond the first 24 months of LTD.

(PSOF ¶ 5; ALIC 0274.)

While the above terms apply to union employees, the Plan treats non-union employees differently. The Plan's SPD for “Non-Union Hourly Employees” states:

Important note regarding Social Security Disability Income. If you have not received a determination of disability for SSDI purposes by the end of your initial 24 months of LTD, you will not be considered disabled for LTD purposes beyond the initial 24 month period. If, however, you receive a determination of SSDI relating back to your disability date at Mondelez Global within 24 months of the end of your initial 24 months of LTD, the DCA will determine that you are disabled retroactively to the end of your initial 24 month period of LTD, provided that you satisfy all other applicable terms and conditions for a determination of LTD.

(ALIC 2104-05.) The non-union SPD thus expressly accounts for retroactive SSDI awards, while the parallel provision for union employees includes no such language.

The Plan terms for union employees also include the following note:

Important note regarding Social Security Disability Income: You must apply for Social Security disability benefits as soon as you are approved for LTD. In order to be considered for LTD benefits beyond the first 24 months of LTD, you must be receiving Social Security disability benefits by the end of your 24th month of receiving LTD Benefits. The DCA can help you with the Social Security application process.

(DSOF ¶ 17; ALIC 2072.)

The Plan also includes multiple provisions concerning income offsets and overpayment provisions. The SPD states that “[o]nce your gross Benefit has been calculated, it will be reduced by Deductible Sources of Income.” (ALIC 2072.) One such deductible source of income enumerated in the SPD is “Social Security disability income or retirement benefits.” (Id.) Additionally, the Plan includes several provisions regarding overpayment of benefits, including the following statement:

What Happens if You Receive an Overpayment of LTD Benefits?

An overpayment may occur when you receive a retroactive payment from a Deductible Source of Income, when the DCA inadvertently makes an error in the calculation of your Benefit or if participant fraud occurs. The overpayment amount is an amount paid in excess of the amount that should have been paid under the LTD Plan.

(ALIC 2082.) In tandem with the overpayment provisions, the Plan includes a “Right of Recovery” provision, which states that “[i]f the amount of the payments made by this Plan is more than it should have paid under the rules in this Article, the Plan may recover the excess by reducing future Benefit payments, obtaining repayment from the Participant or as otherwise provided in the Guideline of Benefits.” (ALIC 0916.) Per the SPD, a repayment plan “will include a lump sum repayment feature.” (ALIC 2082.) The Plan further instructs that if Aetna fails to fulfill its fiduciary duty to recover overpayments, Aetna shall reimburse the employee-funded trust in an amount equal to the overpayment. (ALIC 2172.)

II. Plaintiff Robinson Applies for LTD and SSDI Benefits

These several terms became relevant to Robinson on April 29, 2016, when she ceased working due to several serious cardiac health issues. (PSOF ¶ 6; DSOF ¶ 1.) For the first several months that Robinson could not work, Robinson received short-term disability benefits under the Plan. (PSOF ¶ 7.) Then, in October 2016, she filed a claim for LTD benefits, which Aetna^[2]approved on October 28, 2016, notifying her of an award in the amount of $2,672.80 per month before offsets. (Id. ¶¶ 7-8.) Aetna instructed Robinson to apply for SSDI benefits and provided her with an informational brochure from Allsup, a third-party vendor that represents individuals in Social Security disability claims and that, according to Aetna's notes from October 28, would review Robinson's file. (PSOF ¶ 8; Defs.' Resp. to PSOF [65] (“DRPSOF”) ¶ 8; Answer [40] ¶ 18.) Aetna's October 28 letter also advised Robinson that if she did not provide Aetna with a copy of her SSDI determination letter by the end of her “Own Occupation” disability period, she would no longer be considered disabled for Plan purposes, “even if [Robinson were] later determined to be disabled for SSDI purposes.” (DRPSOF ¶ 8; ALIC 0568-69.) Robinson also spoke to Aetna over the phone on October 28. During that call, Robinson asked Aetna about assistance from Allsup for her SSDI application, and Aetna gave Robinson the Allsup phone number. (ALIC 0021.)

In the following months, Robinson began the process of applying for SSDI. On November 3, 2016, according to Aetna's records Allsup reviewed Robinson's file but initially decided not to offer her representation because, for reasons the record does not further explain, “it d[id] not appear [Robinson] meets SSDI criteria.” (DRPSOF ¶ 8; ALIC 0037.) According to that same note, Allsup planned to review Robinson's claim again six months later but, per Mondelez's instructions, would not initiate contact with Robinson in the meantime (ALIC 0037);...