The opinion of the court was delivered by: James L. Graham United States District Judge
This is an action filed by plaintiff David Yacobucci pursuant to the Employee Retirement Income Security Act of 1974 ("ERISA"), 29 U.S.C. §1001 et seq. In a complaint filed in this court on October 28, 2005, plaintiff, an employee of AT&T Corp., brings a claim under 29 U.S.C. §1132(a)(1)(B), challenging the failure of defendant AT&T Sickness and Accident Disability Benefit Plan for Occupational Employees ("the Plan") to pay him short-term disability benefits allegedly due him under the terms of the Plan. This matter is before the court on the parties' respective motions for judgment on the administrative record.
In Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989), the Supreme Court held that a denial of benefits challenged under §1132(a)(1)(B) 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, in which case the more deferential arbitrary and capricious standard of review applies. In this case, the Plan provides:
The BCAC [Benefit Claim and Appeal Committee] shall be the final review committee under the Plan, with the authority to determine conclusively for all parties any and all questions arising from the administration of the Plan, and shall have sole and complete discretionary authority and control to manage the operation and administration of the Plan, including, but not limited to, the determination of all questions relating to eligibility for participation and benefits, interpretation of all Plan provisions, determination of the amount and kind of benefits payable to any participant, lawful spouse or beneficiary, and construction of disputed or doubtful terms. Such decisions shall be conclusive and binding on all parties and not subject to further review.
R. 28, Plan §9.4. The parties agree that the deferential "arbitrary and capricious" standard of review applies in this case.
The arbitrary and capricious standard is the least demanding form of judicial review of administrative action. McDonald v. Western-Southern Life Ins. Co., 347 F.3d 161, 169 (6th Cir. 2003). Under the arbitrary and capricious standard, a determination by the plan administrator will be upheld if it is rational in light of the plan's provisions. Id.; Yeager v. Reliance Standard Life Ins. Co., 88 F.3d 376, 381 (6th Cir. 1996). When it is possible to offer a reasoned explanation for a plan administrator's decision based upon the evidence, that decision is not arbitrary and capricious. McDonald, 347 F.3d at 169; Davis v. Kentucky Fin. Cos. Retirement Plan, 887 F.2d 689, 693 (6th Cir. 1989). However, a district court's obligation to review the administrative record "inherently includes some review of the quality and quantity of the medical evidence and the opinions on both sides of the issues" to avoid becoming "nothing more than rubber stamps for any plan administrator's decision[.]" McDonald, 347 F.3d at 172.
"Generally, when a plan administrator chooses to rely upon the medical opinion of one doctor over that of another in determining whether a claimant is entitled to ERISA benefits, the plan administrator's decision cannot be said to have been arbitrary and capricious because it would be possible to offer a reasoned explanation, based upon the evidence, for the plan administrator's decision. McDonald, 347 F.3d at 169. A plan administrator is not required to accord special weight to the opinions of the plaintiff's treating physician, or to offer an explanation when it credits reliable evidence that conflicts with a treating physician's evaluation. Black & Decker Disability Plan v. Nord, 538 U.S. 822, 834 (2003); Calvert v. Firstar Finance, Inc., 409 F.3d 286, 293 (6th Cir. 2005)("treating physician rule" does not apply in the ERISA context).
In reviewing the administrator's decision, the court is limited to a consideration of the evidence which was included in the record before the plan administrator. See Shelby County Health Care Corp. v. Southern Council of Industrial Workers Health & Welfare Trust Fund, 203 F.3d 926, 932 (6th Cir. 2000); Smith v. Ameritech, 129 F.3d 857, 863 (6th Cir. 1997).
Plaintiff notes that the Plan is self funded, and that any benefits provided under the Plan are paid directly by AT&T Corp., the Plan Administrator. See R. 10, Plan §3.7; R. 47, Summary Plan Description, p. 8. An employer's operation of a plan both as the insurer and the administrator creates a conflict of interest. Kalish v. Liberty Mutual/Liberty Life Assur. Co. of Boston, 419 F.3d 501, 506 (6th Cir. 2005); Killian v. Healthsource Provident Adm'rs, Inc., 152 F.3d 514, 521 (6th Cir. 1998). However, such a situation does not alter the degree of deference granted under the arbitrary and capricious standard of review; rather, the conflict must be weighed as a factor in determining whether an abuse of discretion occurred. Kalish, 419 F.3d at 506 (citing Firestone Tire & Rubber Co., 489 U.S. at 115); Calvert, 409 F.3d at 292-93 (arbitrary and capricious standard remains unchanged, and conflict of interest is considered in applying that standard).
II. Plan Disability Benefits
Under the Plan, qualified participants may receive payments "on account of disability to work by reason of sickness." R. 9, Plan §3.1. "Such payments shall terminate when disability ceases and shall in no case extend beyond" the periods specified in §3.2 of the Plan based on the employee's years of service. Id. If the employee's Plan credited service is two to five years, disability benefits are paid at full pay rate for four weeks, and half pay for forty-eight weeks. R. 9, Plan §3.2. Once they commence, disability benefits continue until the earliest of: (a) the employee no longer follows the requirements of the Plan; (b) the certified disability ceases; (c) the employee's death; (d) termination of the Plan; or (e) the expiration of the applicable benefit period set forth in §3.2. R. 10, Plan §3.4.
The Plan further provides:
A disabled Employee shall not be entitled to Sickness Disability Benefits ... if he declines to permit the Committee [including the Employee's Benefits Committee and the BCAC] to make or have made by a physician, from time to time, such examinations as the Committee may deem necessary in order to ascertain the Employee's condition, or if he fails to give proper information respecting his condition[.]
R. 17, Plan §5.10. The Summary Plan Description also advises employees to "[f]urnish information from the physician who is caring for you satisfactory to the Claims Administrator, to certify your disability, including the nature and frequency of your treatment[.]" R. 43.
The Plan also states that the Employees' Benefit Committee, the BCAC, the Claims Administrator (an insurance company authorized by AT&T to provide claims processing administrative services for the Plan), and the Plan Administrator "shall grant or deny claims for Sickness Disability Benefits ... under the Plan with respect to Employees and authorize disbursements according to this Plan." R. 27, Plan §9.2. The Plan provides that if an employee's claim is denied by the Claims Administrator, the employee may file a written appeal to the BCAC. R. 25, Plan §8.2. The employee has the right to "send a written statement of the issues and any other documents in support of the claim for Sickness Disability Benefits[.]" Id. The BCAC serves as the final review committee for the review of all appeals by participants whose claims for sickness disability benefits have been denied by the Claims Administrator. R. ...