United States: Halo Looms Over New Decision That Adds To ERISA Risks For Claims Administrators

The latest decision to rely on the influential Halo v. Yale Health Plan decision from the 2nd Circuit adds to a worrisome pattern of courts applying the strictest possible review to lawsuits brought by aggrieved plan participants.

In Schuman v. Aetna Life Ins. Co., decided March 20, 2017, the District of Connecticut relied upon Halo v. Yale Health Plan, 819 F.3d 42 (2d Cir. 2016) to dispel the arbitrary and capricious standard of review and to impose de novo review. In my March 8, 2017 article regarding Salisbury v Prudential Ins. Co. of America, I warned that the holding in Halo — that an administrator had to strictly comply with DOL claim regulations or lose the benefit of the arbitrary and capricious standard of review — created a serious risk to administrators. I predicted that it would entangle courts in the minute details of claims administration, possibly to the regret of the courts. The Schuman decision substantiates my concerns.

Four alleged violations

The Schuman court addressed numerous alleged violations of DOL regulations that the plaintiff argued meant the court should apply de novo review. First, during the administrative appeal proceedings, Schuman submitted an additional vocational assessment (the "Bailey Report"). The Administrative Record proved that a podiatrist had reviewed the Baily Report, but nothing in the Administrative Record proved either that the Review Specialist for Aetna or any vocational expert retained by Aetna had reviewed the Bailey Report. Schuman argued that the failure to have a vocational expert review the Bailey Report meant he had not been given a full and fair review in violation of DOL regulations.

Second, Schuman argued the fact that (1) the Bailey Report had not been reviewed by a vocational expert and (2) the final appeal denial letter had failed to address Schuman's objections to Aetna's original vocational report. He claimed this indicated the Review Specialist had given improper deference to the initial denial, in violation of DOL regulation.

Third, during the administrative proceedings, Schuman had requested the internal policy guidelines upon which Aetna had relied. Aetna had failed to provide these guidelines until they were produced in discovery after the lawsuit had been filed. The court found this failure to be a second violation of DOL regulations.

Fourth, Aetna had problems determining which of four versions of the plan applied to Schuman. During the course of his claim, Schuman was provided with four different versions of the applicable certificate or summary plan description (SPD). Some of these documents stated the own occupation standard applied for 12 months and at least one said it applied for 24 months. Schuman argued that DOL regulations required Aetna to have processes in place to ensure that similarly situated claimants were treated similarly and that Aetna's inability even to produce the "correct" version of the plan demonstrated that Aetna did not have safeguards in place to assure similar treatment.

The court concluded that "together, the violations discussed above are sufficient under Halo to trigger de novo review of the defendants' determination that Schuman did not meet the "reasonable occupation" test." One is left to wonder if the court would have held that de novo review was appropriate if Aetna had committed only one of the sins above.

In a curious twist, the court granted the defendants' request for remand to the administrator because "additional ambiguities in the Administrative Record cloud the viability" of the court's review. The court said that discovery outside the Administrative Record would be helpful, but that the court was not supposed to become a substitute administrator. Thus, it deemed remand the appropriate course.

It is unclear whether even after a further review by the administrator on remand the court will apply de novo review. If Aetna has a vocational expert and the Review Specialist studies the Bailey Report and in its new denial letter addresses Schuman's objections to the original Aetna vocational report and Bailey's Report, might it succeed in resuscitating the arbitrary and capricious standard of review? Or has its failure to provide the guidelines when first required doom it to de novo review? The court does not address these issues.


The Schuman decision prompts several questions and offers several teaching points.

  1. Plan Administrators frequently fail to respond timely to a participant's written request for the plan document or the SPD, which is in violation of ERISA's statutory provision. Will such a failure now mean that the claims administrator's decision will be subject to de novo review? Or is it only "failures" by the claims administrator and violations of DOL regulations that invite de novo review?
  2. Confusion frequently reigns over which version of a plan applies. If a participant becomes disabled in 2010 and receives benefits for five years before the administrator terminates benefit payments in 2015, which version of the plan applies, the 2010 version or the 2015 version? The real answer is both: The substantive provisions of the 2010 version apply, but the 2015 version controls procedural issues such as forum selection clauses, limitations and newly added Firestone language. But what happens when a participant asks for the plan document or SPD that applies to his claim and only one of the two plans is provided?
  3. Most insurers are reluctant to release internal guidelines and when asked to produce the guidelines they used to make their determinations, they sometimes respond that there were none. But what if a court during the course of litigation determines that the insurer did in fact rely or should have relied upon an internal regulation? Will that finding ipso facto mean that the insurer failed to comply with DOL regulations by failing to have provided the internal regulation the court found relevant?
  4. Sometimes the paper trail showing who reviewed what documents in the Administrative Record is not good. This deficiency could cost the administrator the arbitrary and capricious standard of review. The Halo court places upon the administrator the burden of showing it complied with the regulations. Thus, it is important to create a clear and complete record of what documents were reviewed and by whom.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.