First Circuit Court Of Appeals Rules That A Disabled Vet’s Benefits Do Not Reduce His ERISA Benefits
On March 29, 2013, the First Circuit Court of Appeals ruled that a disabled veteran’s service connected Veterans Administration benefits (VA benefits) are not offsets under an ERISA governed group long term disability (LTD) plan issued by Sun Life and Health Insurance Company (Sun Life). See Hannington v. Sun Life and Health Ins. Co., No. 12-1085, 2013 WL 1277124 (1st Cir. Mar. 29, 2013). The Court of Appeals reviewed Sun Life’s interpretation of materials outside of the plan de novo even though Sun Life had inserted a discretionary clause into the insurance policy that otherwise entitled it to deferential review of its decisions in court. In upholding the District Court’s decision that VA benefits are not offsets under Sun Life’s ERISA governed group LTD plan, the Court of Appeals rejected Sun Life’s argument that service connected VA benefits were “similar” to benefits under the Social Security Act or the Railroad Retirement Act.