Riley v. Sun Life and Health Ins. Co.
657 F.3d 739
8th Cir.2011Background
- Riley, a Sumaria Systems employee, applied for and began receiving ERISA long-term disability benefits due to multiple sclerosis.
- Riley is a Vietnam veteran who receives monthly VA disability benefits for service-related MS; VBA benefits are funded by Congress and are not insurance-type benefits.
- Sun Life offset Riley's VA benefits from his Plan-disability benefits under the Plan's 'other income' provision, excluding no explicit VA-specific carve-out in the Plan text.
- The Plan defines 'other income' to include disability or retirement benefits under SSA, the RRA, or any other similar act or law; Sun Life concluded VBA benefits were 'similar' and offset them.
- Riley appealed; Sun Life denied the appeal; the district court held VBA benefits qualified as 'other income' and offset, granting summary judgment for Sun Life.
- The issue before the court is whether the VBA is sufficiently 'similar' to SSA/RRA for offset, and whether Sun Life abused its discretion in interpreting the Plan.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Is VBA offset permissible under the Plan's 'other income' clause? | Riley argues VBA benefits are not 'similar' to SSA/RRA and thus cannot be offset. | Sun Life contends VBA benefits are 'other income' because they resemble SSA/RRA programs and the Plan permits offsets. | No; VBA is not sufficiently similar to SSA/RRA; offset is not justified. |
| What standard governs the administrator's interpretation of the Plan's 'other income' provision? | Abuse-of-discretion review applies since the Plan gives discretionary authority. | Abuse-of-discretion review applies; the plan's interpretation should be upheld if reasonable. | Deferential abuse-of-discretion standard governs administrator's interpretation. |
| Did the plan administrator meaningfully analyze VBA as a 'similar act or law' under the Plan? | Administrator failed to perform a proper statutory comparison and treated VBA by analogy without analysis. | Administrator relied on authorities that VBA is 'similar,' and conducted a reasonable interpretation. | Administrator did not perform sufficient statutory analysis; remand for proper determination. |
Key Cases Cited
- High v. E-Systems, Inc., 459 F.3d 573 (5th Cir. 2006) (offset allowed when plan broadly covers 'other income' including federal programs)
- Jones v. ReliaStar Life Insurance Co., 615 F.3d 941 (8th Cir. 2010) (plan language requiring offset for same/related disability; distinguishable from VBA issue)
- Conkright v. Frommert, 130 S. Ct. 1640 (2010) (abuse-of-discretion review for plan interpretations with discretion granted to administrator)
- Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989) (establishes standard for review of ERISA plan interpretations)
- Meyer v. Duluth Bldg. Trades Welfare Fund, 299 F.3d 686 (8th Cir. 2002) (de novo review when interpreting applicable law in ERISA context)
- Henderson ex rel. Henderson v. Shinseki, 131 S. Ct. 1197 (2011) (highlights unique character of veterans benefits and Congressional solicitude)