OPINION OF THE COURT
Robert T. Miller filed suit against American Airlines, Inc., the American Airlines, Inc. Pilot Retirement Benefit Program Fixed Income Plan, and the American Airlines, Inc. Pension Benefits Administration Committee (collectively, “American”), alleging a violation of § 502(a)(1)(B) of the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. § 1132(a)(1)(B). Miller asserted that American impermissibly terminated his long-term disability benefits, and informed him of this action in a vague and misleading letter. He further alleged that American’s review of his case failed to consider all of his relevant diagnoses, as well as the unique requirements of his employment as a pilot. The District Court granted American’s Motion for Summary Judgment, ruling that American’s termination decision was proper. This appeal requires us to consider whether the administrative process that American employed complied with the procedural mandates of ERISA and, if not, whether the proper remedy is a remand to the plan administrator or a reinstatement of benefits. For the reasons stated herein, we will reverse the decision of the District Court. We hold that the termination of Miller’s benefits was arbitrary and capricious in light of the numerous substantive deficiencies and procedural irregularities that pervaded American’s decision-making process. We further hold that Miller is entitled to retroactive reinstatement of his disability benefits.
I.
A. Factual History
Miller was employed as a commercial airline pilot for American Airlines for nearly ten years. In August 1998, Miller suffered a psychotic episode while on duty and was subsequently admitted to the hospital. He was prescribed various medications as part of his treatment regimen. Miller’s FAA medical certification, required for all commercial pilots, was revoked.
Miller applied for long-term disability (“LTD”) benefits under the American Air *842 lines, Inc. Pilot Retirement Benefit Program Fixed Income Plan (the “Plan”), a defined benefit plan subject to ERISA, 29 U.S.C. § 1001 et seq. Miller began receiving treatment from a psychiatrist, Dr. Abel Gonzalez, in September 1998. Dr. Gonzalez diagnosed Miller as suffering from anxiety disorder and brief reactive psychosis. On February 3, 1999, Dr. Gonzalez reported to American that Miller had suffered brief reactive psychosis caused by physical fatigue, sleep deprivation, and emotional stress, and that his progress was “favorable.” Thereafter, American awarded Miller LTD benefits in November 1999.
The Plan provides “own occupation” disability benefits, where a pilot deemed disabled from employment as a pilot for American may receive benefits even if he could work in a different capacity. Under the Plan, “[disability means an illness or injury verified through a qualified medical authority ... which prevents a Member from continuing to act as an Active Pilot Employee in the Service of the Employer.” (App. at 717.) In addition, an employee will no longer be eligible for LTD benefits if, among other things, “verification of such Disability can no longer be established.” (Id. at 739.) The Plan vests discretionary authority with a Pension Benefits Administration Committee (“PBAC”) that has the power to determine benefits eligibility. Charlotte Teklitz was the delegate of the PBAC who reviewed appeals from the denial or termination of benefits.
In May 2003, American informed Miller that it could no longer substantiate his disability and terminated his benefits as a result. Dr. Gonzalez subsequently submitted documentation reiterating that Miller had been diagnosed with anxiety and brief reactive psychosis. Dr. Gonzalez noted that Miller had taken medication until January 2000 and that he had been “asymptomatic” since the spring of 2001. (Id. at 112.) He further noted that Miller would be able to return to work once his FAA medicate certification was reinstated. In June 2003, Dr. Gonzalez provided four progress notes at American’s request. His notes stated that Miller remained asymptomatic, that he was not taking any medication, and that pursuant to FAA regulations he was still not able to work. After receiving this information, American determined that Miller “[mjedically qualifies for [the] disability pension program” and reinstated his LTD benefits. (Id. at 148.)
Over the next two years, American periodically requested medical updates from Miller to document his disability. In response, Dr. Gonzalez provided documentation that Miller was still under his care, that he was seen monthly, and that he was not taking any medication. American subsequently noted that Miller was not expected to return to work. In August 2005, Miller provided another letter from Dr. Gonzalez reporting that Miller was asymptomatic, that he required adequate sleep to prevent manifestations of stress, and that he was not taking any medication. On October 16, 2006, Dr. Gonzalez provided four additional progress notes stating that Miller’s diagnosis was the same, that he was doing well, that he was “in general asymptomatic with good mental stability,” and that he was not taking any medication. (Id. at 107.)
On October 23, 2006, American sent Miller a letter notifying him that his LTD benefits were terminated. The letter provided:
We are in receipt of your recent correspondence from Dr. Abel Gonzalez, submitted in response to our letter of September 21, 2006 from Jeanne Spoon, RN. However, we are unable to verify either the existence of a continuing medical disability or your continued substan *843 tial progress towards obtaining your FAA medical certification.
(Id. at 98.) The letter then quoted the Plan and stated that a pilot’s disability will cease if “verification of such Disability can no longer be established.” (Id.) The letter further elaborated:
In order to receive further favorable consideration, you will need to demonstrate that you are actively pursuing obtaining your FAA medical certification.
At this time, however, verification of your continued disability cannot be established and your disability benefits under the Plan will end immediately[.]
(Id.) Significantly, the Plan does not make eligibility for LTD benefits contingent on a pilot’s pursuing medical certification with the FAA. Upon receiving this letter, Miller contacted American and inquired as to why his benefits were terminated. In response, American referred him to the termination letter and did not provide any additional information. Miller appealed the decision to the PBAC on November 30, 2006. To support his claim, Miller included a completed appeal form stating that he continued to have active psychiatric diagnoses and submitted a letter from Dr. Gonzalez.
In this letter, Dr. Gonzalez stated that Miller “has been continually and [ ] permanently disabled from obtaining a Class One Medical Certificate as required by F.A.A. regulations since August of 1998.” (Id. at 340.) Dr. Gonzalez further clarified that Miller “remains permanently disabled due to medical reasons.” (Id.) According to Dr. Gonzalez, Miller continued to suffer from anxiety and psychosis, as he had since his original diagnosis. Dr. Gonzalez then went on to summarize Miller’s treatment:
The necessity for this continuated [sic] treatment has and will continue to exist because of the nature of his psychiatric conditions. More specifically, his diagnosis reveals and refers to latent vulnerability on his mental status so that prevention [sic] medical treatment, when adequate, may be sufficient. However, no medical treatment has the capacity to neither revert, undo, nor cure such condition.
(Id.) Dr. Gonzalez concluded by noting that Miller continued on active treatment necessary to preserve his health and that his prognosis was fair.
In light of the disagreement as to Miller’s eligibility for LTD benefits, American referred the case to Western Medical Evaluators (“WME”) for an outside medical review on March 27, 2007. 1 American directed WME to perform an “evidence-based, forensic medical review/evaluation” of Miller’s case. (Id. at 300.) The letter from American stated that Miller’s “[e]onditions [e]laimed” were anxiety disorder and brief reactive psychosis. (Id.) Additionally, American prompted WME to answer six specific questions regarding the evidentiary support for the “continuing presence of [Miller’s] psychiatric diagnoses.” (Id. at 301.)
In response, Drs. Seskind and Crain of WME reviewed Miller’s file and provided American with a report on April 20, 2007. Neither performed a physical evaluation of Miller or communicated with him. Dr. Crain’s report reviewed the documents in Miller’s file and found that the records “did not document any psychiatric prob *844 lems or explain [Miller’s] failure to obtain the required medical certificate.” (Id. at 310.) As such, Dr. Crain determined that Miller was not disabled. Dr. Seskind’s portion of the report noted that FAA standards require that a pilot not suffer from psychosis. He then went on to say it was “crucial to note” that Miller was not undergoing psychotherapy, that he was not taking medication, and that he had not attempted to obtain his FAA medical certification. (Id. at 312.) In light of the fact that Miller had not requested a formal approval of his psychiatric designation from an FAA medical examiner and been denied this certification, Dr. Seskind found that Miller “is therefore not really disabled.” (Id.) On May 22, 2007, American sent Miller a letter which included the WME report and reaffirmed the termination decision.
B. Procedural History
On February 13, 2008, Miller filed a complaint against American in the United States District Court for the Middle District of Pennsylvania alleging a claim for benefits pursuant to ERISA § 502(a)(1)(B). Both parties filed cross-motions for summary judgment. On November 30, 2009, the Magistrate Judge issued a report and recommendation proposing that that District Court grant Miller’s motion for summary judgment and order the retroactive reinstatement of his benefits.
Miller v. American Airlines, Inc.,
No. 08-CV-277,
On March 8, 2010, the District Court rejected the Magistrate’s report and granted summary judgment in favor of American.
Miller v. American Airlines, Inc.,
No. 08-CV-277,
Miller filed a timely notice of appeal.
II.
The District Court had jurisdiction under 29 U.S.C. § 1132(e)(1) and 28 U.S.C. § 1331. We have jurisdiction pursuant to 28 U.S.C. § 1291. We exercise plenary review over an order granting summary judgment.
See Shook v. Avaya, Inc.,
We review various procedural factors underlying the administrator’s decision-making process, as well as structural concerns regarding how the particular ERISA plan was funded, to determine if the conclusion was arbitrary and capricious.
3
See, e.g., Glenn,
III.
A. Termination of Benefits
Section 502(a)(1)(B) of ERISA allows a participant to bring a claim to recover benefits due to him under the terms of the plan. 29 U.S.C. § 1132(a)(1)(B). 4 Miller *846 asserts that American’s termination of his LTD benefits was arbitrary and capricious because (1) the decision was not based on substantial evidence, (2) American operated under a structural conflict of interest whereby it had the incentive to deny his claim, and (3) American committed numerous procedural errors during its review of his case. We address each argument in turn.
1. Support for the Termination Decision
We determined in
Schwing
that where there was “an abundance of evidence of [the claimant’s] misconduct to support the denial of [the] claim,” a structural conflict of interest or procedural irregularities would not serve to “tip[ ] the scales in favor of finding that the [administrator] abused its discretion.”
The record demonstrates, contrary to American’s assertion that Miller simply slipped through the cracks, that American exercised frequent oversight in Miller’s case. In fact, American reviewed and relied on documentation from Dr. Gonzalez stating that Miller was asymptomatic and, on multiple occasions over several years, found that this description supported the payment of benefits. Notably, in 2003, American determined that Miller “[m]edically qualifies for [the] disability pension program” and reinstated his LTD benefits after receiving records describing him as asymptomatic. (App. at 148.) Yet, after receiving additional reports containing this same description, American terminated Miller’s benefits. As such, American interpreted Dr. Gonzalez’s characterization of Miller as asymptomatic to mean that he was both eligible for disability benefits and that his benefits should be terminated. American’s reliance on the term “asymptomatic” as the linchpin of Miller’s ineligibility for disability benefits is, therefore, misplaced.
Further, the record reveals that although Dr. Gonzalez reported that Miller was no longer taking medication, he consistently stated that Miller was still under his care. Indeed, American noted twice after receiving records from Dr. Gonzalez that Miller was unable to return to work as a pilot. (Id. at 105-06.) In addition, American’s internal records repeatedly state that Miller was diagnosed with anxiety and brief reactive psychosis. (Id. at 104-06.) Notably, only a few days before American terminated Miller’s benefits, American’s records state that Miller’s diagnosis was the “same.” (Id. at 107.) Finally, Dr. Gonzalez’s letter in support of Miller’s appeal to the PBAC notes that his psychiatric conditions are permanent and that continued treatment is necessary to stabilize his health.
A review of the administrative record, therefore, demonstrates that although Miller may not have been outwardly manifesting symptoms, his psychiatric diagnoses remained constant and required regular treatment. As such, Dr. Gonzalez’s report that Miller suffered from anxiety diagnosis
*847
and brief reactive psychosis constituted “an illness or injury verified through a qualified medical authority,” thus satisfying the definition of disability under the Plan.
{Id.
at 717.) Unlike
Schwing,
the administrative record does not contain “an abundance of evidence” of ineligibility such that we should ignore any procedural defects in the termination decision.
2. Structural Conflict of Interest
In a situation where “a benefit plan gives discretion to an administrator or fiduciary who is operating under a conflict of interest, that conflict must be weighed as a ‘facto[r] in determining whether there is an abuse of discretion.’ ”
Firestone,
Prior to
Glenn,
we consistently held that there is no conflict of interest when an employer operates an actuarially grounded plan whereby claims are paid through a trust.
See, e.g., Post,
In light of
Glenn,
however, we conclude that this approach is no longer valid.
Glenn
instructs that a conflict arises where an employer both funds and evaluates claims.
See
Turning to the case at hand, the Plan is a defined benefit plan that American funds based on an actuarial formula. The record reveals that although American did meet ERISA’s minimum funding requirements in 2006, the year Miller’s benefits were terminated, the Plan still lacked funds to meet a significant amount of its projected benefit obligation. Despite the fact that American made fixed contributions to the Plan, every dollar that American saved by reducing disability payments decreased its projected benefit obligation. American argues that WME’s involvement in the re
*848
view process insulated American from any conflict of interest because the WME report was binding on all parties. We do not believe that the WME review totally eliminated any conflict of interest. First, it is undisputed that American terminated Miller’s benefits well before WME became involved at the appeal stage. Second, Charlotte Teklitz, the PBAC representative, testified in her deposition that American could seek further review of the WME report’s conclusions if it was dissatisfied with its analysis. (App. at 549.) Though the WME review of Miller’s claims may have ameliorated some of the effects of the conflict of interest, the fact remains that American did have some incentive to terminate Miller’s benefits. And, even though this conflict is rather indirect, we must afford it some weight in light of
Glenn. See
3. Procedural Factors
a. Reversal of Position
An administrator’s reversal of its decision to award a claimant benefits without receiving any new medical information to support this change in position is an irregularity that counsels towards finding an abuse of discretion.
See, e.g., Post,
Our review of the decision in
Foley
leads us to conclude that it is not controlling in this situation. In
Foley,
the claimant argued that it was arbitrary and capricious for the employer to refuse to apply an exception for calculating credited service when it had previously interpreted the pension plan to allow the exception for other employees.
See
Turning to the District Court’s alternative conclusion that American did not reverse its position, we disagree that the documentation from Dr. Gonzalez provided new information regarding Miller’s eligibility for benefits. The records that American received from Dr. Gonzalez in 2005 and 2006 stating that Miller was asymptomatic do not differ in any material aspect from the records submitted in 2003 that American determined supported a disability finding. For example, Dr. Gonzalez *849 reported in 2003 that Miller was diagnosed with anxiety and brief reactive psychosis, but that he was currently asymptomatic. Later, in 2005, Dr. Gonzalez stated that Miller was asymptomatic and was working toward preventing manifestations of stress. Similarly, in 2006, Dr. Gonzalez reported that Miller’s diagnoses remained the same and that he was asymptomatic. Each report mirrors the next and identifies Miller as “asymptomatic.” Thus, the more recent records were only “new” to the extent that they had not been received before; they did not provide any new information.
Moreover, American admitted that it could not determine whether there was any change that occurred in Miller’s psychiatric condition between January 2003 and May 2007. As a result, the information that American relied upon to terminate Miller’s benefits in 2006 was the same type of documentation that American interpreted to support a disability finding in 1999 and again in 2003 through 2006. We recognize that American’s initial payment of Miller’s benefits does not operate as an estoppel such that they can never terminate benefits. But, in the absence of any meaningful evidence to support a change in position, American’s abrupt reversal is cause for concern that weighs in favor of finding that its termination decision was arbitrary and capricious.
See id.; see also McOsker v. Paul Revere Life Ins. Co.,
b. Reliance on Non-Existent Plan Requirements
We have previously held that an employer who imposes requirements extrinsic to the plan in evaluating eligibility for benefits acts arbitrarily and capriciously.
See, e.g., Mitchell v. Eastman Kodak Co.,
Based on the plain language in the termination letter, as well as the other evidence in the record, we conclude that American did rely, to some extent, on Miller’s failure to obtain his FAA medical certification. First, the letter states that American was “unable to verify either the existence of a continuing medical disability or [Miller’s] continued substantial progress towards obtaining [his] medical certification.” (App. at 98.) Therefore, there were apparently two potential bases for American’s decision, one of which was Miller’s failure to seek his FAA medical recertification. In addition, the letter instructs that Miller could receive “further favorable consideration” if he demonstrated that he was actively pursuing the certification. (Id.) It is unlikely that American would include this instruction if Miller’s obtaining *850 his FAA certification did not somehow bear on his eligibility for benefits.
Second, American offered no evidence to establish, contrary to the termination letter’s focus, that it did not rely on this requirement. Dr. Bettes, the author of the termination letter, testified that he could not recall whether the decision to terminate Miller’s benefits was influenced by Miller’s failure to seek medical certification. (I d. at 1130.) In fact, Dr. Bettes also testified that a pilot’s failure to apply for FAA certification could contribute to his decision to deny benefits. {Id.)
Moreover, Drs. Crain and Seskind placed significant weight on Miller’s failure to obtain his medical certification in the WME report. Notably, Dr. Crain remarked that “[t]he records of Dr. Gonzalez do not document any psychiatric problems or issues to explain his failure to obtain the medical certificate, so that it cannot be attributed to a mental disorder.”
{Id.
at 310.) Likewise, Dr. Seskind devoted a significant portion of his report to a discussion of Miller’s failure to regain his FAA medical certification. His analysis concluded by noting that because Miller had not been denied this certification, he was not suffering from a mental illness and therefore was not truly disabled. Because American adopted the WME report and included it in the final letter affirming the termination of Miller’s benefits, it relied on this requirement. Given that American did not offer any evidence to contradict the plain language of the letter, the overreaching emphasis on this requirement in the termination letter and throughout the appeal process demonstrates that it was a factor in the termination decision here. The Plan does not compel a pilot to seek FAA medical certification in order to be eligible for LTD benefits. Thus, American’s imposition of this requirement is a factor that counsels towards finding that the termination decision was arbitrary and capricious.
See Mitchell,
c. Compliance with Section 503 of ERISA and Accompanying Regulations
Section 503 of ERISA requires that every employee benefit plan must:
“(1) provide adequate notice in writing to any participant or beneficiary whose claims for benefits under the plan has been denied, setting forth the specific reasons for such denial, written in a manner calculated to be understood by the participant, and
(2) afford a reasonable opportunity to any participant whose claim for benefits has been denied for a full and fair review by the appropriate named fiduciary of the decision denying the claim.”
29 U.S.C. § 1133. The accompanying regulations note that “this section sets forth minimum requirements for employee benefit plan procedures pertaining to claims for benefits by participants and beneficiaries.” 29 C.F.R. § 2560.503-1(a). The regulations require a plan administrator to provide written notification of any adverse benefit determination setting forth
“[I]n a manner calculated to be understood by the claimant ... (i) [t]he specific reason or reasons for the adverse determination; (ii) [reference to the specific plan provisions on which the determination is based; (iii) [a] description of any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is neeessary[.]”
Id.
§ 2560.503 — 1(g)(1). The District Court determined that § 503 and the accompanying regulations were irrelevant to Miller’s claim, as it was brought pursuant to § 502.
See Miller,
We briefly addressed whether a denial letter set forth adequate “specific reasons” under § 503 and the accompanying regulations in
Grossmuller,
Other decisions addressing this discrete issue are also instructive. For example, the Seventh Circuit held in
Hatpin v. W.W. Grainger, Inc.,
that the termination letter did not satisfy § 503 when it stated that “no objective medical evidence was contained in [the] claim to substantiate total disability from any gainful occupation.”
By contrast, in
Hobson v. Metropolitan Life Insurance Co.,
*852
We find the termination letter in this case to be legally deficient under § 503 for two reasons. First, the letter does not provide “specific reasons for [the] denial, written in a manner calculated to be understood by the participant.” 29 U.S.C. § 1133. The letter states that American is “unable to verify either the existence of a continuing medical disability or [Miller’s] continued substantial progress towards obtaining [his] FAA medical certification.” (App. at 98.) American’s inability to “verify” Miller’s disability is a bare conclusion that does not provide a specific reason for the termination decision. Rather, this purported explanation is a general blanket assessment that Miller is ineligible for disability benefits. The letter makes no mention of Miller’s specific diagnoses nor the precise information that is lacking from his file. Moreover, the letter provides no insight into why the records that American received, and based on which American previously awarded and reinstated benefits, would no longer support a disability finding. American was on notice that this letter was not “written in a manner calculated to be understood by the participant” because Miller subsequently inquired as to the specific reasons for the termination, but was simply referred back to the letter itself. The letter’s mention of FAA certification is the most specific reason given for the termination, but this reference is misleading because it was not a prerequisite under the Plan and therefore not a valid reason to deny Miller’s LTD benefits. The language in the letter is more akin to the conclusory statements in
Grossmuller, Halpin,
and
VanderKlok,
where the plan administrator summarily concluded that the claimant was ineligible, or that the evidence received did not support the claim without providing further factual support.
See Halpin,
Second, we conclude that the termination letter does not provide the precise information necessary to advise Miller how to perfect his claim. The regulations accompanying § 503 require the termination letter to describe “any additional material or information necessary for the claimant to perfect the claim and an explanation of why such material or information is necessary.” 29 C.F.R. § 2560.503-1(g)(1)(iii). Here, the letter informed Miller that “[i]n order to receive further favorable consideration, you will need to demonstrate that you are actively pursuing obtaining your FAA medical certification.” (App. at 98.) Obtaining this certification, however, is not a requirement under the Plan and would therefore not serve to change his disability status. Given that the letter did not set forth any additional instruction as to how Miller could achieve a favorable disability determination, it does not comply with 29 C.F.R. § 2560.503 — 1(g)(1)(iii). The termination letter here does not satisfy the basic procedural mandates of ERISA, as set forth in § 503 and the relevant regulations. Instead of ensuring the procedural fairness of the termination decision, this letter made it exceedingly difficult for Miller to understand, let alone challenge, the bases for American’s course of action. For that reason, American’s noncompliance with the *853 statute weighs in favor of finding that their decision was arbitrary and capricious.
d. Analysis of All Relevant Diagnoses
An administrator’s failure to address all relevant diagnoses in terminating a claimant’s benefits is also a cause for concern that suggests the decision may have been arbitrary and capricious.
See Kosiba v. Merck & Co.,
American argues, and the District Court agreed, that it adequately considered Miller’s anxiety diagnosis because Dr. Crain concluded, “Miller does not have overt evidence of a treatable medical condition.” (App. at 310.) Miller counters that American did not properly examine his anxiety diagnosis because neither the termination letter nor the WME report sufficiently analyzed this condition. We note at the outset that the termination letter does not mention either of Miller’s diagnoses — anxiety disorder or brief reactive psychosis. Therefore, we look to whether the WME report addressed Miller’s claimed diagnoses. Our review of the WME report itself leads us to the conclusion that, contrary to American’s broad interpretation of the evaluators’ analysis, it did not adequately scrutinize Miller’s anxiety diagnosis. In ordering the report, American specifically directed WME to evaluate Miller’s claims that he suffered from these two conditions. Additionally, the 2006 letter from Dr. Gonzalez, mentioned in the WME report, states that Miller suffered from anxiety.
Despite the prompting by American, neither Dr. Crain nor Dr. Seskind devoted any of their discussion to Miller’s anxiety diagnosis. Dr. Seskind made no reference to anxiety in his portion of the report, but rather began his analysis by noting that it was essential that Miller not suffer from psychosis. He went on to discuss the symptoms of psychosis, the fact that Miller was not taking any medication, and that he had not obtained his FAA medical certification. Dr. Seskind concluded by noting that “[s]ince this is now getting into the distant past of at least six years,” Miller was no longer disabled because he was not undergoing formal psychiatric treatment. (Id. at 312.) In this regard, Dr. Seskind’s report focuses exclusively on Miller’s psychotic episode; there is no discussion whatsoever of Miller’s claim that he continued to suffer from anxiety or Dr. Gonzalez’s 2006 letter stating the same.
Dr. Cram’s portion of the report is likewise deficient in its analysis of Miller’s anxiety diagnosis. Although Dr. Crain does mention Miller’s anxiety, he makes this reference in the context of describing the various medical records from Dr. Gonzalez. Interestingly, Dr. Crain acknowledged Dr. Gonzalez’s report that “[n]o *854 medical treatment could revert, undue or cure [Miller’s] underlying condition.” (Id. at 310.) Yet, Dr. Crain ultimately observed that the “psychiatric records show no objective evidence of continuing disability,” without providing insight into why the anxiety diagnosis was no longer supported. (Id.) He further noted that “[although I do not have all of the facts concerning the emotional stresses that led to the onset of Mr. Miller’s psychosis, I assume that now, after nine years, these issues have been dealt with through psychotherapy.” (Id. at 311.) This conclusion seemingly focuses on Miller’s initial diagnosis of psychosis. The remainder of Dr. Crain’s report discusses the risk that Miller may have another psychotic episode.
Notwithstanding the fact that Drs. Crain and Seskind had received records chronicling Miller’s anxiety and were directed by American to evaluate this diagnosis, the WME report did not present any analysis of this condition or explain why it no longer rendered Miller disabled. Whereas the report does address Miller’s psychosis, it fails to devote any meaningful discussion to Miller’s claim that he suffered from continuing anxiety. A mere reference that Miller has been diagnosed with anxiety, without providing any explanation of why that diagnosis is no longer supported, casts doubt on the reasonableness of American’s decision-making.
See Kalish,
e. Job Requirements
Although we have not previously so held, various courts have determined that an administrator’s proper consideration of the claimant’s ability to perform his or her job requirements in light of the relevant diagnosis is a significant factor to evaluate on arbitrary and capricious review.
See, e.g., Elliott v. Metro. Life Ins. Co.,
We find this analysis persuasive because it is essential that any rational decision to terminate disability benefits under an own-occupation plan consider whether the claimant can actually perform the specific job requirements of a position. The District Court did not consider whether American adequately addressed Miller’s ability to fulfill his job requirements. Miller contends that neither the termination letter nor the WME report provided any explanation of how he could perform the essential duties of his position as a pilot. American did not address Miller’s ability to function as a pilot in the termination letter; however, the WME report canvasses the extent to which it considered the actual job requirements Miller had to fulfill. American included a job description and a list of essential functions that a pilot must perform when it ordered the WME report. Therefore, we consider whether the WME report adequately addressed Miller’s ability to function as a pilot.
Even though the WME evaluators determined that Miller was not disabled, they arrived at this conclusion without considering whether he could actually perform his duties as a pilot in light of his diagnoses. According to American’s job description, a pilot must, among other things, “be able to work varying hours of the day or night,” possess “[capability of decision-making under stress,” as well as “[t]he ability to adapt to diversified flight schedules, situations, or scenarios.” (App. at 303-05.) In addition, because the Plan provides “own occupation” disability benefits, it is essential to consider whether a pilot is capable of working in that capacity, regardless of his ability to function in a different position. Although Dr. Crain concluded that Miller was “not disabled from his occupation as a Pilot,” he also recognized that Miller was at risk of having another psychotic episode if he was exposed to physical fatigue, sleep deprivation, and emotional stress. (Id. at 311.) As such, there is a striking incongruity between Dr. Crain’s conclusion that Miller could return to work as a pilot — having to operate under considerable stress — and his recognition that stress, fatigue, and sleep deprivation could prompt another psychotic episode. Moreover, Dr. Crain did not address how the fact that Dr. Gonzalez had diagnosed Miller with anxiety would be compatible with his ability to work under stress as a pilot.
On the whole, we believe that Dr. Crain’s conclusion that Miller could perform as a pilot, without explaining how his claimed anxiety and latent risk of psychosis would be compatible with this uniquely stressful position, is perfunctory. Accordingly, American’s failure to address the specific demands that Miller would face as a pilot suggests that the termination decision was not reasoned and based on an individualized assessment of Miller’s ability. Thus, this is a significant oversight that suggests the decision was arbitrary and capricious.
See Elliott,
4. Weighing of the Factors
To decide whether an administrator’s termination of benefits is arbitrary and capricious, we “determine lawfulness by taking account of several different, often case-specific, factors, reaching a result by weighing all together.”
Glenn,
B. Remedy
Having determined that American abused its discretion, we consider the appropriate remedy. We have not squarely addressed the issue of the appropriate remedy for an improper termination of benefits under § 502(a)(1)(B). American argues that if we find the termination decision to be arbitrary and capricious, we must remand the case to the Plan administrator pursuant to our decision in
Syed,
Other courts addressing this question have determined that retroactive reinstatement of a claimant’s benefits is the proper remedy when the administrator’s termination decision was unreasonable.
See, e.g., Pannebecker v. Liberty Life
As
sur. Co. of Boston,
In this case, American abused its discretion in terminating Miller’s LTD benefits. Therefore, retroactive reinstatement of his benefits is necessary.
IV.
We conclude that American acted arbitrarily and capriciously in terminating Miller’s LTD benefits. The decision-making process that American applied was flawed in many aspects, demonstrating that the assessment of Miller’s disability was not the product of a reasoned, disinterested fiduciary. Given that multiple factors counsel in Miller’s favor and that his benefits were unlawfully terminated, we find that retroactive reinstatement of his benefits is the appropriate remedy. Therefore, we reverse and remand to the District Court for entry of summary judgment in favor of Miller. Additionally, we direct the District Court to order American to retroactively reinstate Miller’s LTD benefits, effective from the date of termination.
It is doubtful that the Administrator acted in an arbitrary and capricious manner in accepting the clinical findings of American’s medical evaluators rather than those of Miller’s physician. As we have held, “[ujnder the arbitrary and capricious standard, the court must defer to the administrator of an employee benefit plan unless the administrator’s decision is clearly not supported by the evidence in the record or the administrator has failed to comply with the procedures required by the plan.”
Abnathya v. Hoffmann-La Roche, Inc.,
Further, the court must be vigilant not to “substitute its own judgment for that of the [administrator] in determining eligibility for plan benefits” and may overturn a plan administrator’s decision only if it is “without reason, unsupported by substantial evidence or erroneous as a matter of law.” Id. at 45 (quotations omitted).
The Administrator’s adoption of the opinions of American’s medical evaluation team, rather than that of Miller’s physician, is a choice that is not unusual in cases like this and is one usually entrusted to the Administrator.
6
See Stratton v. E.I. DuPont De Nemours & Co.,
In addition, neither the asserted procedural missteps cited by Miller nor the alleged conflict of interest actually prejudiced his administrative appeal. These factors were at most de minimus and did not hinder full consideration of the relevant issues. A much more objective test for evaluating whether the termination of benefits was arbitrary and capricious lies in the Administrator’s failure to address Miller’s claim that, because of his illness, he could not return to work as a pilot for American.
The Plan at issue in this case provides long term benefits to any “pilot who is prevented from acting as a cockpit crew-member in the service of [American Airlines] due to a [disability.” Disability, in turn, is defined as “an illness ... verified through a qualified medical authority that prevents a pilot from continuing to work as a pilot for [American Airlines].”
An individual who does not have a medical certificate issued by the FAA may not be employed as a pilot for American Airlines. Miller did not have a certificate in the year 2006, when his benefits were terminated. Moreover, federal regulations state that, in order to be eligible for such a certificate, one must, among other things, have “[n]o established medical history or clinical diagnosis of ... [a] psychosis.” 14 C.F.R. § 67.107(a)(2).
7
The Plan does not require Miller to apply for a medical certificate after the onset of his disability, nor did it authorize American to apply for certification on his behalf. However, the requirement of FAA medical certification is inherent in the Plan’s definition of disability. By failing to address this issue, the Plan Administrator deprived Miller of a full and fair hearing and thus committed an abuse of discretion.
See, e.g., Grossimuller v. Int’l Union, United Auto., Aerospace & Agric. Implement Workers of Am.,
Miller’s lack of FAA medical certification has been an issue from the outset of this case. In its October 28, 2006, letter advising him that his disability benefits would be terminated, American stated, “we are unablé to verify either the existence of a continuing medical disability or your continued substantial progress towards obtaining your FAA medical certification.” In addition, Miller was advised that, “[i]n order to receive further favorable consideration, you will need to demonstrate that you are actively pursuing obtaining your FAA medical certification.”
*859 In his application for the administrative appeal of the termination decision, Miller cited his inability to obtain a medical certificate from the FAA. He explained that he was “unable to return to active flight status due to a medical history of psychosis and a general anxiety disorder.” When asked for the basis of his appeal, he wrote, “still sick, under continuing psychiatric care, and unable to obtain an airman medical certificate due to psychosis and a general anxiety disorder.”
The medical opinions of Dr. Gonzalez as well as those of Drs. Crain and Seskind underscore the interdependence between the Plan’s definition of “disability” and the requirement of FAA medical certification. As Dr. Gonzales reported in a letter dated November 22, 2006, “Mr. Miller has been continually and [will] be permanently disabled from obtaining a Class One Medical Certificate as required by F.A.A. regulations since August of 1998.” Further, he had “not regained his Class One Medical Certificate as the exclusive and direct consequence of the permanent status of his mental illness.” 8
As a member of the Plan’s medical evaluation team, Dr. Seskind, himself a Senior Aviation Medical Examiner, noted,
“From an AME [f]ederal [a]viation [standpoint, I quote [14 C.F.R.] Section 67.107, for first class airman medical certificate!. T]he medical standards are that there be no psychosis, which means that the individual has manifested delusions, hallucinations, grossly bizarre or disorganized behavior or other commonly accepted symptoms of his condition or the individual may reasonably be expected to manifest [such symptoms].”
He concluded, “[m]y medical opinion is that while a senior AME would not be able to issue a medical certificate in such a case on his own, ... the FAA might well favorably regard this gentleman as capable of flying under proper supervision.... [T]here is no real evidence that he is disabled and incapable of performing his flight duties.”
Thus, although the Plan’s medical experts (and, arguably, Miller’s own physician) opined that he was physically capable of returning to work as a pilot, the fact remains that Miller is now and will remain unable to resume those duties unless the FAA reissues his medical certificate.
The Administrator’s lack of attention to this issue may have been explained in the deposition of Charlotte Teklitz, American’s Managing Director of Benefits and Productivity, who was delegated by American’s Pension Benefits Appeals Committee to resolve appeals from disability benefit terminations. She testified that “[t]he plan has no requirement ... for the pilot to continue to try to get [his] FAA [certification]” and later explained, “[y]ou have to be disabled from the occupation of pilot, and the FAA certification is not specifically relevant.” Therefore, she denied the plaintiffs appeal because of “the third party medical review[,] which indicates from both of these doctors that he is no longer disabled from the occupation of pilot.”
Potentially inconsistent with that testimony, however, are American’s Pilot Disability Case Management Notes for Miller. *860 These indicate that, in 2003 (after American had terminated the plaintiffs disability-benefits the first time), the fact that FAA regulations precluded plaintiff from returning to work within five years of stopping certain medications may have been a factor in determining that his disability benefits should be reinstated.
One note, for example, mentioned that Miller “[c]an not RTW [return to work] for 5 yrs after stopping meds.... [M]eds discontinued Jan. 02-PCD of Jan 07”. Those same notes indicate that, in November 2005, American hoped to “obtain authorization] to submit [his medical information] to [the] FAA” on a “hunch ... that he might be a candidate” for medical clearance notwithstanding his history of psychosis “after a 10 yr stable observation period.”
To reiterate, under American’s Plan, a pilot may receive long-term disability benefits if he is prevented from acting as a crew member in service to the company because of an illness or injury. Miller meets that definition. He is prevented from returning to employment as a pilot because his medical history (and the basis for his nearly decade-long receipt of disability benefits) precludes him from obtaining the necessary licensure. In other words, he has an illness that seemingly would prevent the FAA from certifying him; as a result, he contends he is unable to function as a pilot for American and therefore is entitled to benefits.
Whether Miller was “prevented” from returning as a “cockpit crew member” due to a “disability” or history of a disability that prevents his service was a contention raised by him but not decided by the Pension Benefit Appeals Committee. The Committee’s failure to address that claim deprived Miller of a full and fair review, see 29 U.S.C. § 1133(2), and, therefore, amounted to an abuse of discretion.
To clarify, I need not (and do not) decide that Miller’s lack of FAA certification perse entitles him to benefits. It is enough that the Administrator declined to rule on a serious and substantial issue.
Remand is not necessary because there is no dispute over the relevant facts and the legal issues were apparent to the parties. Accordingly, I join in reversing the judgment of the District Court.
Notes
. The Plan dictates that disputes will be referred to a clinical authority and that those findings "regarding the nature and extent of such illness or injury shall be final and binding upon the Administrator, the Association and the Member and his Beneficiaries.” (App. at 785-86.)
. In the ERISA context, the arbitrary and capricious and abuse of discretion standards of review are essentially identical.
See Howley v. Mellon Fin. Corp.,
. In
Firestone Tire & Rubber Co. v. Bruch,
the Supreme Court determined that when an ERISA plan grants discretion to the administrator, whether the administrator operates under a conflict of interest is a factor that must be weighed in determining if there was an abuse of that discretion.
As a result of
Glenn,
the "sliding scale” approach is no longer valid.
See Estate of Schwing v. The Lilly Health Plan,
. ERISA § 502(a)(1)(B) provides:
"A civil action may be brought—
(1) by a participant or beneficiary—
(B) to recover benefits due to him under the terms of the plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan[.]”
. Though the imposition of an extra-Plan requirement is far from the only irregularity presented in this case, we note that this fact alone likely would have supported a holding that American's decision to terminate Miller's LTD benefits was arbitrary and capricious.
. This deferential standard in the face of a clear, if not uncommon, conflict of interest is not without criticism. Indeed, we have observed that it may "simply invite[ ] drafters of employee benefit plans to insert boilerplate language in plan documents to ensure that courts will apply a deferential standard of review over the decisions of the plan administrator.”
Abnathya,
. "As used in this section, 'psychosis' refers to a mental disorder in which:
(i) The individual has manifested delusions, hallucinations, grossly bizarre or disorganized behavior, or other commonly accepted symptoms of this condition; or
(ii) The individual may reasonably be expected to manifest [those symptoms].” 14 C.F.R. § 67.107(a)(2). A waiver of these requirements may be granted only if the applicant shows to the satisfaction of the Federal Air Surgeon that the duties applied for "can be performed without endangering public safety.” 14 C.F.R. § 67.401(a).
. This was not the first time that Dr. Gonzalez referred to the requirement of FAA medical certification. In a June 10, 2003, letter to American Airlines, he wrote that “Mr. Miller has been asymptomatic and able to safely return to his usual work since the spring of 2001. I anticipate Mr. Miller will return to his regular work upon reinstatement of his FAA medical certificate.... Once released by the chief FAA psychiatrist, Mr. Robert Miller’s working hours should strictly abide by the FAA regulations on maximum hours to be worked without periods of rest in between (FAA [Part 12] requirements).”