                 NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
                            File Name: 13a0331n.06

                                            No. 12-5902                                 FILED
                                                                                     Apr 03, 2013
                           UNITED STATES COURT OF APPEALS                     DEBORAH S. HUNT, Clerk
                                FOR THE SIXTH CIRCUIT


Violet M. Hogan,                                          )
                                                          )
       Plaintiff-Appellant,                               )        ON APPEAL FROM THE
                                                          )        UNITED STATES DISTRICT
                 v.                                       )        COURT FOR THE WESTERN
                                                          )        DISTRICT OF KENTUCKY
Life Insurance Company of North America                   )
                                                          )
       Defendant-Appellee.                                )
                                                          )



BEFORE: DAUGHTREY, ROGERS, and MCKEAGUE, Circuit Judges.

       ROGERS, Circuit Judge. Violet Hogan appeals the district court’s grant of judgment on the

administrative record in this disability suit. A former employee of SHPS, Inc., she seeks short-term

disability (“STD”) and long-term disability (“LTD”) benefits under insurance polices provided by

Life Insurance Company of North America (“LINA”). Because, contrary to Hogan’s claims, LINA

had discretionary authority to review her application for benefits, its decision is reviewed under the

arbitrary-and-capricious standard. The district court properly concluded that LINA’s decision met

this standard.

       On September 16, 2008, Hogan visited her primary care doctor, Dr. Thomas Schurfranz,

complaining of anxiety, trouble thinking, and back pain. R.15, at 197, PageID #860. During this

visit—just two days prior to her stopping work—she told Dr. Schurfranz that she couldn’t “seem to

function,” that she didn’t like her job, and that she had become “anxious, dwelling on things [at]
No. 12-5902
Hogan v. Life Insurance Company of North America


work.” R.15, at 197, 164. She also stated that she was having panic attacks. Id. Dr. Schurfranz

diagnosed her with depression with anxiety and prescribed medications. Id. Two days later, on

September 18, Hogan stopped working as a Leave Processor for her employer, SHPS, Inc. Shortly

thereafter, she applied for short term disability benefits, claiming depression, anxiety, and panic

attacks. See R.15, at 79–81, PageID #736–38.

       Although Hogan had a follow-up visit scheduled approximately 6 weeks after her first

appointment with Dr. Schurfranz, she returned to his office on September 22 again complaining of

“anxiety, much of which stems from work-related stress.” R.15 at 197, PageID #860. At that visit,

Dr. Schurfranz noted that he agreed with Hogan’s decision to take a “short-term leave” until her

medications took effect. Id.

       Hogan returned to Dr. Schurfranz’s office about one month later, reporting that she was

“sometimes better, sometimes not.” R.15, at 170, PageID #827. She also reported that she could

not return to work because of stressors and that she was having several anxious episodes per week.

Id. She told Dr. Schurfranz that she was paralyzed by emotions three to six hours per day, five days

per week, with symptoms persisting even though she was no longer working. Id. At that time, Dr.

Schurfranz referred Hogan to a psychiatrist. Id. LINA received no evidence that she followed up

with that provider.

       She received another psychiatric referral at the final medical appointment she attended

through an employee assistance program (“EAP”) on December 1, 2008. R.15, at 172–73, PageID

#829–30. She attended only one such meeting. According to the visit notes, Hogan reported that


                                               -2-
No. 12-5902
Hogan v. Life Insurance Company of North America


she could not concentrate or remember how to do things she had always been able to do. Id. The

notes further stated that she was referred to Dr. Gupta, a psychiatrist, and suggested that her medical

providers rule out Alzheimer’s/dementia versus anxiety. Id. The EAP placed no limitations or

restrictions on her work or daily activities. Id.

       LINA served as the disability-claims processor for SHPS, Inc. Although the parties contest

the extent of LINA’s discretion in disability determinations, the STD Group Disability Insurance

Certificate (“STD Certificate”) stated:

       The Plan Administrator [SHPS] has appointed the Insurance Company [LINA] as the
       named fiduciary for adjudicating claims for benefits under the Plan, and for deciding
       any appeals of denied claims. The Insurance Company shall have the authority, in
       its discretion, to interpret the terms of the Plan, to decide questions of eligibility for
       coverage or benefits under the Plan, and to make any related findings of fact.

R.15, at 122. The STD Policy provided:

       The Employee is considered Disabled if, solely because of Injury or Sickness, he or
       she is:

       1.      unable to perform the material duties of his or her Regular Occupation; and

       2.      unable to earn 60% or more of his or her Covered Earnings from working in
               his or her Regular Occupation.

       The Insurance Company will require proof of earnings and continued Disability.

R.15, at 88, PageID #745. The standard of proof was further elaborated elsewhere in the policy,

which stated that the employee “must provide the Insurance Company, at his or her own expense,

satisfactory proof of Disability.” R.15, at 92, PageID #749. The term “satisfactory proof” appeared

several other times in the policy. See, e.g., R.15, at 99, PageID #756.


                                                    -3-
No. 12-5902
Hogan v. Life Insurance Company of North America


        In order to evaluate Hogan’s claim, LINA reviewed Dr. Schurfranz’s visit notes as well as

a questionnaire completed by the doctor at LINA’s request. These records amounted to three pages

of visit notes and the brief questionnaire, called the Medical Request Form. Dr. Schurfranz was

unable to provide additional documentation. Dr. Schurfranz noted that “significant stressors at work

exacerbate [Hogan’s] condition,” R.15, at 188, but did not connect any specific work activity to her

condition, nor did he provide any evidence of objective testing or further evaluation. And while he

noted restrictions on her work activities, he did not initially place any restrictions on any other

activities of Hogan’s daily life.

        LINA denied Hogan’s claim on October 23, 2008. In its letter to Hogan, LINA cited a lack

of clinical evidence of functional deficiencies and added “we cannot conclude from the records we

received a physical or mental inability to function at work other than your current dislike for your

position.”   R.15, at 11.     LINA went further in describing the type of evidence that was

problematically missing. It wrote:

        Disability is determined by medically supported functional limitations and
        restrictions which preclude ability in performing your occupation.

        We do not dispute you may have been somewhat limited or restricted due to your
        diagnosis, however an explanation of your functionality and how your functional
        capacity prevented you from performing the requirements of a Leave Processor was
        not clinically supported as we were not provided with physical exam findings,
        physical limitations, and severity of symptoms.

R.15, at 10–11. LINA suggested that its determination would be affected if Hogan could submit

documentation such as “physician’s office notes, hospital records, consultations, test result reports,

therapy notes, physical and/or mental limitations, etc.” Id.

                                                -4-
No. 12-5902
Hogan v. Life Insurance Company of North America


        Hogan appealed this determination. As part of Hogan’s appeal, Dr. Schurfranz submitted

a second completed questionnaire along with the final visit note from his practice. R.15, at 179,

PageID #836. In the questionnaire, Dr. Schurfranz wrote that Hogan’s primary diagnosis was “major

depressive episode with anxiety” and noted that her condition was not work related. Id. “Stressors

at work exacerbate her condition. Patient is unable to cope with these (and other) stressors, severely

impairing her ability to exercise good judgement [sic].” Id. In terms of specific restrictions, Dr.

Schurfranz wrote that Hogan was to “avoid work until symptoms are better controlled and patient

can focus on tasks” and to “avoid going out in public alone until able to cope with stressful situations

more effectively.” Id. He denied that Hogan could be able to work with accommodations, stating

that her “condition prevents her from being able to cope.” Id. He wrote that “‘accommodations’

would not prevent her condition from worsening, as evidenced by her persistent exacerbations

despite being off work several weeks.” Id. He concluded that Hogan could only return to work

“after therapy (counseling and medication) have improved her control of her symptoms.” Id.

        This second questionnaire was submitted to LINA along with a letter written by Hogan in

which she further explained her condition and contested LINA’s interpretation of her records. She

informed LINA that it was “not completely informed as to the many ongoing problems or the full

extent of [her] disabilities” and wrote that her condition made her “unable to focus [her] attention

and concentrate making it nearly impossible to perform [her] duties at work or at home.” R.15, at

180, PageID #837. She also noted that she suffers from “bi-lateral knee arthritis, degenerative disc

disease and cervical spine disease, all of which are chronic ailments” as well as “coronary artery


                                                 -5-
No. 12-5902
Hogan v. Life Insurance Company of North America


disease, high blood pressure and high cholesterol.” Id. Neither she nor Dr. Schurfranz suggested

that these ailments restricted her work activities, although Hogan stated in her letter that she had

“serious concerns about how the depression, anxiety and panic attacks will affect my heart

problems.” Id. Hogan submitted no information linking these conditions.

       LINA assigned two nurse case managers to review Hogan’s file on appeal. R.15, at 44, 176,

PageID #701, 833. The first reviewer, Kem Lockhart, concluded that LINA’s first decision should

not be overturned, noting “no degree of severity documented . . . lack of actual office visit recvd .

. . no note of change to meds.” Id. at 176, PageID #833. The second reviewer agreed, noting that

“there is a lack of clinical evidence such as mental status exam or observations to support [Hogan’s]

reported symptoms.” Id. at 44, PageID #701.

       LINA denied Hogan’s appeal on December 8, 2008. In a letter to Hogan, LINA reiterated

its need to have documented evidence supporting “functional limitations/restrictions which preclude

ability in performing [Hogan’s] occupation.” R.15, at 165, PageID #822. It concluded that the

records it reviewed did “not provide physical or mental exam findings regarding a measured decrease

in [Hogan’s] functionality and how [her] functional capacity prevented [her] from performing [her]

occupation beginning September 19, 2008.” Id. It added that, “there is no clinical testing or findings

provided in the medical record to support” her reported limitations. Id.

       On February 4, 2011, Hogan filed suit in federal district court alleging improper denial of

STD benefits and amended her complaint later that month to include a claim for improper denial of

LTD benefits. She argued, as she does on appeal, that SHPS did not properly delegate discretionary


                                                -6-
No. 12-5902
Hogan v. Life Insurance Company of North America


review to LINA and therefore LINA’s decision was not entitled to deference. On July 3, 2012, the

court entered summary judgment for LINA. The court concluded that LINA had the authority to

adjudicate benefit claims and that LINA’s “satisfactory proof” requirements were sufficient to

require review under the arbitrary-and-capricious standard. In its brief opinion, the court noted that

“the [medical] record is slim and the Court finds it unconvincing.” R.48 at 3, PageID #654. The

court added “Defendant has many reasons to suspect this claim: (1) the general diagnostic

conclusion, (2) the complete absence of clinical tests and results, and (3) based on only three office

visits.” Id. at 4, PageID #655. Citing a “complete absence of convincing medical evidence,” the

court concluded that “Plaintiff’s medical evidence provides no sound or reasonable basis upon which

to identify a medical condition limiting her work.” Id. Therefore, “[t]he decision to deny benefits

. . . was reasonable and was not arbitrary, capricious or an abuse of discretion.” Id.

        The scope of judicial review under ERISA depends on whether the claims administrator of

a benefits plan has discretion to determine eligibility for benefits and/or to construe the plan’s terms.

Miller v. Metro. Life Ins. Co., 925 F.2d 979, 983 (6th Cir. 1991). This court reviews de novo the

district court’s determination of the proper standard of review. Haus v. Bechtel Jacobs Co., 491 F.3d

557, 561 (6th Cir. 2007). “[A] denial of benefits . . . is to be reviewed under a de novo standard

unless the benefit plan gives the administrator or fiduciary discretionary authority to determine

eligibility for benefits or to construe the terms of the plan.” Firestone Tire & Rubber Co. v. Bruch,

489 U.S. 101, 115 (1989). If such a grant is made, the administrator’s decision is reviewed under

the arbitrary-and-capricious standard. See id. at 113–15.


                                                  -7-
No. 12-5902
Hogan v. Life Insurance Company of North America


        The district court and LINA identified such delegation of discretionary authority in the STD

Certificate; however, the Supreme Court recently restricted the types of documents that are

considered part of the plan in CIGNA Corp. v. Amara, 131 S. Ct. 1866, 1877 (2011). The Court

concluded “that summary documents, important as they are, provide communication with

beneficiaries about the plan, but that their statements do not themselves constitute the terms of the

plan.” Id. at 1878. The same may be true of the STD Certificate, which purported to be a summary

of the benefits contained in the policy. Although LINA cites several Sixth Circuit cases suggesting

that plan summaries and certificates can be construed as plan documents, these cases predate Amara.

        We need not, however, rely on the language in the STD Certificate, because the “satisfactory

proof” language in the STD Policy was sufficient to grant discretionary authority to LINA. This

circuit has treated group insurance policies as benefit plans and has concluded that the term

“satisfactory proof” is sufficient to grant discretionary authority to review claims under the arbitrary-

and-capricious standard of review. See Yeager v. Reliance Standard Life Ins. Co., 88 F.3d 376,

380–81 (1996); Miller v. Metro. Life Ins. Co., 925 F.2d 979, 983–84. In Yeager the court referred

to a “Group Long Term Disability Insurance Policy” provided to employees by the insurance

company as “the Plan” and concluded that “the Plan’s requirement that a claimant submit

‘satisfactory proof of Total Disability to us [the insurer]’” constituted a sufficiently express grant of

discretion to warrant application of arbitrary-and-capricious review. Yeager, 88 F.3d at 380–81. In

Miller, the court concluded that the phrase “on the basis of medical evidence satisfactory to the




                                                  -8-
No. 12-5902
Hogan v. Life Insurance Company of North America


Insurance Company” was a valid grant of discretion warranting arbitrary-and-capricious review of

the insurer’s decision to terminate benefits. Miller, 925 F.2d at 983–84.

       Hogan’s claim that the delegation was procedurally improper also fails, because 29 U.S.C.

§ 1105(c)(1) does not limit delegation, but rather identifies certain circumstances in which delegation

may occur. These circumstances are relevant to the subsequent subsection, § 1105(c)(2), which

limits liability for delegations of fiduciary responsibilities that occur under the procedures alluded

to in § 1105(c)(1).

       Finally, the standard of review is not changed by Kentucky Revised Statute § 304.14-120,

which requires an insurer to file its policy with the Kentucky’s Insurance Commissioner. The

Commissioner’s Advisory Opinion 2010-01 provides that “[i]t is the Department’s position that

discretionary clauses deceptively affect the risk purported to be assumed in any policy and as such,

any forms containing discretionary clauses may be disapproved.” R.41-4, at 1, PageID #525

(emphasis added). Nevertheless, this court is not bound by language in a non-binding opinion to

alter the standard of review due to the mere possibility that the Department of Insurance could have

disallowed the policy. Moreover, to the extent that Hogan challenges the validity of a non-filed

policy, she should not be able to have her cake and eat it too—either the policy is valid or it is not.

She cannot seek the benefits contained in the policy while rejecting procedural language adverse to

her. See id.

       Because LINA had discretionary authority to review Hogan’s claim, the district court

properly reviewed LINA’s determination under an arbitrary-and-capricious standard. We review that


                                                 -9-
No. 12-5902
Hogan v. Life Insurance Company of North America


decision de novo. Based on the paucity of evidence before it, LINA was not unreasonable, arbitrary,

or capricious to conclude that Hogan was not entitled to short-term disability benefits.

        In evaluating Hogan’s claim, LINA received only three brief visit notes from Hogan’s

treating physician—an internist lacking any sort of mental-health specialization. These notes

indicated that the idea to take time off from work originated with Hogan and was not a restriction

imposed by her physician (although Dr. Schurfranz agreed with her decision to stop working until

her medications better controlled her self-reported symptoms). The record lacked any sort of clinical

verification, and despite requests and opportunities to do so, Hogan failed to provide the type of

information about her specific limitations that could be used by LINA to determine that she met the

plan’s definition of disability.

        Insurance companies should provide “accurate claims processing by insisting that

administrators provide a full and fair review of claim denials.” Metro. Life Ins. Co. v. Glenn, 554

U.S. 105, 115 (2008) (internal quotation marks omitted). Under the arbitrary-and-capricious

standard of review of benefits denials, if it is possible to “offer a reasoned explanation, based on the

evidence,” Elliott v. Metro. Life Ins. Co., 473 F.3d 613, 617 (6th Cir. 2006), and the decision

involves “a reasonable interpretation of the plan,” this court will defer to the underlying decision.

Shelby Cnty. Health Care Corp. v. S. Council of Indus. Workers, 203 F.3d 926, 933 (6th Cir. 2000).

        To meet the definition of “disabled” under the plan, Hogan needed to be unable to perform

the material duties of her job and also needed to be unable to earn sixty percent or more of her

earnings from her job. It was reasonable, based on the thin and conclusory evidence Hogan


                                                 - 10 -
No. 12-5902
Hogan v. Life Insurance Company of North America


submitted to LINA, and on Hogan’s failure to respond to LINA’s notice that it could not grant her

claim without evidence identifying her functional deficits and linking them to her job duties, for

LINA to deny that she was disabled within the plan’s terms.

       Moreover, nothing in LINA’s letters to Hogan supports Hogan’s assertion that LINA

disregarded or failed to review fully the evidence before it. In LINA’s October 23, 2008 letter, it

noted its review of the September 16 and September 22 visit notes, and summarized the contents of

Dr. Schurfranz’s records. R.15, at 11, PageID #668. LINA’s stated conclusion that the lack of

clinical evidence explaining or identifying functional deficits prevented it from approving her claim

was reasonable, not contrary to the evidence, and consistent with the plan’s disability requirements.

Id.   Similarly, in the December 8 denial of appeal, LINA identified the definition of

disability/disabled contained in the policy; provided a lengthy, item-by-item summary of Hogan’s

records; described the results of the file-review by nurse care managers; and again explained to

Hogan why the records she submitted did not qualify her for disability benefits under the plan’s

terms. R.15 at 2–4, PageID #659–61.           These explanations appear to reflect “reasonable

interpretation[s] of the plan” and a “reasoned explanation, based on the evidence” justifying LINA’s

decision to deny benefits. See Elliott, 473 F.3d at 617; Shelby Cnty., 203 F.3d at 933.

       Despite Hogan’s claim that LINA was required to give special deference to her treating

physician’s clinically unsupported claims, an insurance company’s requirement that there be

“objective medical evidence of disability is not irrational or unreasonable.” Cooper v. Life Ins. Co.

of N. Am., 486 F.3d 157, 166 (6th Cir. 2007).


                                                - 11 -
No. 12-5902
Hogan v. Life Insurance Company of North America


        Furthermore, Hogan’s assertion that the district court’s decision should be reversed for failure

to adequately consider LINA’s conflict of interest is unavailing. Although the district court did not

discuss this factor, it does not affect the result in this case. Even if LINA’s conflict were to be a

strong factor against its decision, the paucity of evidence of Hogan’s disability is a similarly strong

counterbalance. The Supreme Court’s decision in Metropolitan Life Insurance Co. v. Glenn directs

reviewing courts to weigh an insurer’s conflict of interest in arbitrary-and-capricious review of

benefits denials. An insurer operates under a conflict of interest when it is responsible both for

evaluating claims and paying benefits. 554 U.S. at 113–14.

        LINA was both the evaluator and payer of SHPS employees’ benefits claims and therefore

a conflict of interest was present and should have been weighed. However, the weight to be given

to the factor is case-specific. Such a conflict is “more important . . . where circumstances suggest

a higher likelihood that it affected the benefits decision, including but not limited to, cases where an

insurance company administrator has a history of biased claims administration.” Id. at 117. It has

less weight “where the administrator has taken active steps to reduce potential bias and to promote

accuracy.” Id. Hogan sought, but did not receive, discovery regarding the performance of LINA’s

employees and the procedures under which they operated. This may be cause to weigh the conflict

“slightly in favor of finding that [LINA’s] determination was arbitrary and capricious.” See Thies

v. Life Ins. Co. of N. Am., 804 F. Supp. 2d 560, 573 (W.D. Ky. 2011). However, even weighing the

conflict against LINA, it does not outweigh LINA’s reasonable concerns detailed above.




                                                 - 12 -
No. 12-5902
Hogan v. Life Insurance Company of North America


       While Hogan also seeks LTD benefits, she did not first seek these benefits from LINA and

therefore she failed to exhaust administrative remedies with respect to this claim. She advances a

theory that LTD benefits should be awarded automatically if STD benefits are granted, because

LINA’s policy includes a provision that automatically transitions STD into LTD after the expiration

of the STD period. However, because we uphold LINA’s denial of STD benefits, we have no reason

to reach Hogan’s LTD claims on this theory.

       For these reasons, we affirm the decision of the district court.




                                               - 13 -
