Muldoon et al v. Prudential Insurance Company of AmericaMOTION TO DISMISS FOR FAILURE TO STATE A CLAIM AND STRIKE JURY DEMANDE.D. Pa.February 9, 201736800082v.3 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA JILL MULDOON, and D. M. 1 , a minor, by and through his mother and natural guardian, JILL MULDOON, and O.M., by and through her mother and natural guardian, JILL MULDOON, Plaintiff, v. PRUDENTIAL INSURANCE, Defendant. Civil Action No. 2:16-cv-05763-MMB DEFENDANT’S MOTION TO DISMISS OR, IN THE ALTERNATIVE, TO DISMISS THE CLAIMS OF THE MINOR CHILDREN PLAINTIFFS, DISMISS COUNT II, AND TO STRIKE THE JURY DEMAND Defendant THE PRUDENTIAL INSURANCE COMPANY OF AMERICA (incorrectly sued as “Prudential Insurance”) (“Prudential”), by and through its attorneys and pursuant to Rules 12(b)(6) and 12(f) of the Federal Rules of Civil Procedure and Local Rule 7.1, submits the following Motion to Dismiss Plaintiffs’ Complaint, or, in the alternative, to Dismiss the Claims of the Minor Children Plaintiffs, Dismiss Count II and to Strike Jury Demand. For the reasons stated below, and in the attached memorandum of law, the Court should dismiss Plaintiffs’ Complaint with prejudice, or in the alternative, dismiss the claims of the minor children Plaintiffs and strike Plaintiffs’ jury demand. 1. Plaintiff Jill Muldoon (“JM”) and her two minor children, D.M. and O.M. (collectively “the minor children Plaintiffs”), bring claims against Prudential under the Employee 1 Per Federal Rule of Civil Procedure 5.2(a), the minor children’s names are redacted and only initials are used, even though the minors’ full names were used in the caption of the Complaint. Case 2:16-cv-05763-MMB Document 4 Filed 02/09/17 Page 1 of 6 - 2 - 36800082v.3 Retirement Income Security Act of 1974 as amended (“ERISA”), 29 U.S.C. § 1001, et seq. (Compl. ¶¶ 1-4, 30-41.) 2. JM was eligible for LTD insurance through her former employer’s employee welfare benefit plan (the “plan”). (Compl. ¶ 5.) 3. JM ceased working for her former employer in January 2013 due to her alleged disability and has been receiving LTD benefits from Prudential since July 2013. (Compl. ¶¶ 6-7.) 4. Since May 2016, Prudential has withheld JM’s entire monthly LTD benefit due to an overpayment that resulted from the award of Social Security Disability benefits (“SSDB”) to the minor children Plaintiffs. (Compl. ¶¶ 9-17.) 5. The minor children Plaintiffs were awarded children’s benefits under 42 U.S.C. § 402(d) (“Dependent SSDB”), which provides for a child’s benefits based on a parent’s disability. 6. Plaintiffs allege that Prudential violated the plan when it reduced JM’s benefit due to the Dependent SSDB. (Compl. ¶¶ 18-41.) 7. The plan states, “Prudential will deduct from your gross disability payment the following deductible sources of income: … The gross amount that you, your spouse and children receive or are entitled to receive as loss of time disability payments because of your disability under: (a) the United States Social Security Act ….” See SuperMedia Inc. Long-Term Disability Plan Booklet-Certificate, attached to the accompanying Memorandum of Law as Exhibit A (emphasis added). 8. The Seventh Circuit held that this exact plan language permitted Prudential to offset Family SSDB benefits from a claimant’s LTD benefits. See Schultz v. Aviall, Inc. Long Term Disability Plan, 670 F.3d 834, 838 (7th Cir. 2012); see also In re Unisys Corp. Long-Term Disability Plan ERISA Litig., 97 F.3d 710 (3d Cir. 1996) (holding that LTD plan language Case 2:16-cv-05763-MMB Document 4 Filed 02/09/17 Page 2 of 6 - 3 - 36800082v.3 providing that LTD “benefits you receive” may be adjusted if claimant received disability “income from other sources,” such as Social Security, was unambiguous and did not provide for adjustments for disability benefits which claimant’s dependents received from other sources because plan did not use the words “benefits you and your dependents receive”). 9. Accordingly, Plaintiffs’ Complaint fails to state a claim and should be dismissed with prejudice. 10. In the alternative, at minimum, the minor children Plaintiffs may not sue under ERISA as neither is a participant, beneficiary, or fiduciary under ERISA and therefore neither has standing to sue. See 29 U.S.C. § 1132(a)(1)(B) and (a)(3) (“A civil action may be brought- (1) by a participant or beneficiary … (B) to recover benefits due to him under the terms of his 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 … (3) by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan”); see also Baldwin v. Univ. of Pittsburgh Med. Ctr., 636 F.3d 69, 75 (3d Cir. 2011). 11. Further, Count II fails because it does not seek appropriate relief under ERISA § 1132(a)(3). 12. While Count II of Plaintiffs’ Complaint appears to be brought only on behalf of the minor children Plaintiffs, the relief requested in that Count’s Prayer for Relief includes the request for a declaration that JM is entitled to LTD benefits from Prudential without the application of the offset for the Dependent SSDB awarded to the minor children Plaintiffs. Thus, Case 2:16-cv-05763-MMB Document 4 Filed 02/09/17 Page 3 of 6 - 4 - 36800082v.3 Count II seeks to recover identical relief that JM seeks to recover in Count I of the Complaint pursuant to ERISA 29 U.S.C. § 502(a)(1)(B). 13. A § 1132(a)(3) claim under ERISA can only progress if the plaintiff can demonstrate that § 1132(a)(1)(b) alone does not provide an adequate remedy. Here, JM has pleaded a claim for benefits under § 1132 (a)(1)(B), and that provision is the only one under which she may proceed on her claim for benefits. The only relief sought by JM and to which she could be entitled is monetary, and the only equitable relief sought in Count II -- a declaration that JM is entitled to LTD benefits without an offset for the Dependent SSDB -- would likewise result only in monetary relief for JM. 14. Further, Plaintiffs’ jury demand should be stricken. It is well-established in the Third Circuit that there is no right to a jury trial in a suit for benefits under 29 U.S.C. § 1132(a)(1)(B). See Pane v. RCA Corp., 868 F.2d 631, 636 (3d Cir. 1989); Turner v. CF & I Steel Corp., 770 F.2d 43, 46-7 (3d Cir. 1985). WHEREFORE, for the foregoing reasons, and those stated in its accompanying Memorandum of Law, Prudential respectfully request that the Court grant its motion to dismiss and dismiss Plaintiffs’ Complaint with prejudice, or in the alternative, dismiss the claims of the minor children Plaintiff, dismiss any remaining claim in Count II, and strike Plaintiffs’ jury demand, and grant any further relief deemed just and appropriate under the circumstances. Case 2:16-cv-05763-MMB Document 4 Filed 02/09/17 Page 4 of 6 - 5 - 36800082v.3 DATED: February 9, 2017 Respectfully submitted, SEYFARTH SHAW LLP By: /s/ Jacob Oslick Jacob Oslick joslick@seyfarth.com SEYFARTH SHAW LLP 620 Eighth Avenue New York, New York 10018 Telephone: (212) 218-5500 Facsimile: (212) 218-5526 Attorneys for Defendant Case 2:16-cv-05763-MMB Document 4 Filed 02/09/17 Page 5 of 6 36800082v.3 CERTIFICATE OF SERVICE I hereby certify that on February 9, 2017, I presented the foregoing Defendant Prudential’s Motion to Dismiss Plaintiff’s Complaint, or in the alternative to Dismiss the Minor Children Plaintiffs and to Strike Jury Demand, with the Clerk of the Court for filing and uploading to the CM/ECF system, which will send notification of such filing to the following at their e-mail addresses on file with the Court: Samuel A. Dion, Esquire Attorney I.D. No. 55761 1845 Walnut Street Suite 1199 Philadelphia, PA 19103 (t) 215-546-6033 (f) 215-546-6269 Email: samueldion@aol.com /s/ Jacob Oslick One of Defendant’s Attorneys Case 2:16-cv-05763-MMB Document 4 Filed 02/09/17 Page 6 of 6 36863804v.10 IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA JILL MULDOON, and D.M., 1 a minor, by and through his mother and natural guardian, JILL MULDOON, and O.M., by and through her mother and natural guardian, JILL MULDOON, Plaintiff, v. PRUDENTIAL INSURANCE, Defendant. Civil Action No. 2:16-cv-05763-MMB MEMORANDUM OF LAW IN SUPPORT OF DEFENDANT’S MOTION TO DISMISS, OR, IN THE ALTERNATIVE, TO DISMISS THE CLAIMS OF THE MINOR CHILDREN PLAINTIFFS, DISMISS COUNT II, AND STRIKE THE JURY DEMAND Defendant The Prudential Insurance Company of America (“Prudential”) (incorrectly sued as “Prudential Insurance”), by and through its attorneys and pursuant to Rules 12(b)(6) and 12(f) of the Federal Rules of Civil Procedure and Local Rule 7.1, submits this memorandum of law in support of its Motion to Dismiss Plaintiffs’ Complaint, or, in the alternative, to Dismiss the Claims of the Minor Children Plaintiffs, Dismiss Count II, and Strike the Jury Demand. I. INTRODUCTION Plaintiff Jill Muldoon (“JM”) and her two minor children, DM and OM (collectively “the minor children Plaintiffs”), sue pursuant to the Employee Retirement Income Security Act of 1974 as amended (“ERISA”), 29 U.S.C. § 1001, et seq. In Count I, JM sues for long-term disability (“LTD”) benefits under 29 U.S.C. § 1132(a)(1)(B), 2 and in Count II, the minor 1 Per Federal Rule of Civil Procedure 5.2(a), the minor children’s names are redacted and only initials are used, even though the minors’ full names were used in the caption of the Complaint. 2 Plaintiffs do not specify under which section of ERISA Count I is brought. Because JM seeks LTD benefits in Count I, Count I necessarily arises under 29 U.S.C. § 1132(a)(1)(B). Count I appears to be brought only on behalf of JM. (See Compl. ¶¶ 31-32 and prayer for relief, which demands judgment only on behalf of JM.) Case 2:16-cv-05763-MMB Document 4-1 Filed 02/09/17 Page 1 of 16 - 2 - 36863804v.10 children Plaintiffs seek “other appropriate equitable relief” under 29 U.S.C. § 1132(a)(3). 3 (Compl., ECF No. 1 at ¶¶ 1-4, 30-41.) JM is a participant in an employee welfare benefit plan sponsored by her employer that provides LTD benefits (the “plan”). Plaintiffs claim that Prudential violated the plan by reducing JM’s LTD benefits by the amount of dependent Social Security Disability benefits received by DM and OM on account of JM’s disability. Because the plan explicitly permits Prudential to reduce the LTD benefit by the amount of such income, Plaintiffs have no plausible claims under ERISA, and the Court should dismiss the Complaint with prejudice. In the alternative, the Court should dismiss the claims of the minor children Plaintiffs, because neither one is a participant, beneficiary, or fiduciary of the plan and thus is not permitted to sue under ERISA. Further, the Court should dismiss Count II to the extent it seeks the same relief as Count I (a declaration that JM is entitled to LTD benefits with no offset for Dependent SSDB) because Plaintiffs cannot simultaneously pursue a claim under 29 U.S.C. § 1132(a)(3) and a claim for benefits under 29 U.S.C. § 1132(a)(1) based upon the same conduct and seeking precisely the same relief. Finally, Plaintiffs’ jury demand should be stricken because there is no right to jury trial on Plaintiffs’ claim for benefits under ERISA. II. GOVERNING ERISA PLAN DOCUMENTS AND THE U.S. SOCIAL SECURITY ACT The plan provides that Prudential will calculate a claimant’s gross disability payment based on monthly earnings and other terms of the plan, and then subtract any “deductible sources of income,” as defined in the plan. See Exhibit A at 13. 4 The plan defines “deductible sources of 3 Count II appears to be brought only on behalf of the minor children Plaintiffs. (See Compl. ¶¶ 33-41 and prayer for relief, which demands judgment only on behalf of OM and DM.) However, part of the relief sought is for a declaration that JM be entitled to LTD benefits without any offset for Dependent SSDB. Id. 4 In deciding a motion under Rule 12(b)(6), a court may consider the complaint, documents incorporated into the complaint by reference, matters of which a court may take judicial notice, and exhibits attached to the complaint. Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007); see also Pension Benefit Guar. Corp. v. Case 2:16-cv-05763-MMB Document 4-1 Filed 02/09/17 Page 2 of 16 - 3 - 36863804v.10 income” to include, “The gross amount that you, your spouse and children receive or are entitled to receive as loss of time disability payments because of your disability under: (a) the United States Social Security Act ….” Id. at 15 (emphasis added). The plan also specifies that “Prudential has the right to recover any overpayments due to: … your receipt of deductible sources of income.” Id. at 26. Although the plan provides for a minimum monthly payment, the plan allows Prudential to apply the minimum monthly payment toward an outstanding overpayment. See id. at 17. Regarding lump sum payments, the plan states that, “If you receive a lump sum payment from any deductible source of income, the lump sum will be pro-rated on a monthly basis over the time period for which the sum was given.” Id. at 18. The United States Social Security Act provides for the award of disability insurance benefits (Social Security Disability Benefits (“SSDB”)) for certain eligible individuals found to be disabled from work. See generally 42 U.S.C. § 423 (eligibility requirements for individual disability insurance benefits). The amount of an individual’s disability benefit payment is based on the disabled person’s average monthly earnings. See generally 42 U.S.C. § 415 (explaining computation of primary insurance amount). Under 42 U.S.C. § 402(d)(1), every dependent child “of an individual entitled to old-age or disability insurance benefits … shall be entitled to a child’s insurance benefit ….” A dependent child’s benefit is a percentage of the primary insurance amount. See 42 U.S.C. § 402(d)(2) (“Such child’s insurance benefit for each month shall, if the individual on the basis of whose wages and self-employment income the child is White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993) (noting that a court may consider any undisputedly authentic documents submitted with the motion and upon which the non-movant’s claims are based.) Consequently, the Court may consider the SuperMedia Inc. Long-Term Disability Plan Booklet-Certificate attached here as Exhibit A, the SSA Notice of Award letters attached as Exhibits B, C, and D, and the SuperMedia, Inc. General Administration Summary Plan Description attached here as Exhibit E, because they are referenced in Plaintiff’s Complaint. (See, e.g. Compl. ¶¶ 5, 7, 9, 10-11.) Case 2:16-cv-05763-MMB Document 4-1 Filed 02/09/17 Page 3 of 16 - 4 - 36863804v.10 entitled to such benefit has not died prior to the end of such month, be equal to one-half of the primary insurance amount of such individual for such month.”). III. FACTS ALLEGED IN THE COMPLAINT5 JM was eligible for LTD insurance benefits through her former employer’s plan, which is governed by ERISA. (Compl. ¶¶ 5-6.) 6 In January 2013, JM ceased working due to disability and has been receiving LTD benefits from Prudential since July 2013. (Compl. ¶¶ 6-7.) JM’s gross monthly LTD benefit amount is $3,561.49. (Compl. ¶ 7.) In April 2015, the Social Security Administration (“the SSA”) approved JM’s claim for SSDB, awarding her $2,187 per month. 7 (Compl. ¶ 10.) JM’s receipt of SSDB resulted in a net monthly LTD benefit to JM under the plan of $1,374.39. Id. Based upon JM’s disability, the SSA also awarded dependent benefits (“Dependent SSDB”) in the amount of $1,093 per month because JM had two minor children. 8 (Compl. ¶¶ 11-12.) In July or August 2015, the SSA made a retroactive lump sum payment of approximately $33,000, representing Dependent SSDB benefits. (Compl. ¶ 12.) Prudential requested that JM pay this lump sum to Prudential to repay the overpayment that resulted from the award of Dependent SSDB to the minor children Plaintiffs, but JM refused. (Compl. ¶¶ 14, 16.) Accordingly, and consistent with the terms of the plan, since May 2016, Prudential has withheld JM’s entire monthly LTD benefit to recoup the overpayment that resulted from the award of Dependent SSDB. (Compl. ¶¶ 14-17.) Despite the clear plan provisions regarding deductible 5 The facts set forth below are those alleged in Plaintiffs’ Complaint. For the purposes of this motion to dismiss, Prudential assumes them to be true. Prudential reserves the right to deny any of Plaintiffs’ allegations at the appropriate time. 6 Plaintiffs’ Complaint is mis-numbered and contains two paragraphs numbered “5” and two numbered “6.” This reference is to the first two paragraphs numbered 5-6. 7 The SSA Notice of Award letter, dated March 21, 2016, states that Plaintiff JM was eligible for SSDB beginning in July 2013, based on a finding that JM became disabled on January 17, 2013. See SSA Notice of Award letter to JM, attached as Exhibit B. 8 The SSA Notice of Award letters, dated April 30, 2016, state that the minor children Plaintiffs are entitled to “child’s benefits” beginning in July 2013. See SSA Notices of Award, attached as Exhibits C and D. Case 2:16-cv-05763-MMB Document 4-1 Filed 02/09/17 Page 4 of 16 - 5 - 36863804v.10 sources of income and overpayments, Plaintiffs allege that Prudential improperly deducted the Dependent SSDB from JM’s monthly LTD benefit under the plan and thus violated ERISA by failing to pay LTD benefits owed to JM. (Compl. ¶¶ 18-41.) IV. ARGUMENT The plan explicitly provides that Prudential is entitled to deduct from JM’s LTD benefits the SSDB awarded to JM’s children because of JM’s disability, and thus, Prudential has properly withheld these LTD benefits to recover the overpayment of LTD benefits. Accordingly, Plaintiffs’ Complaint fails to state a claim and should be dismissed with prejudice in its entirety. In the alternative, the minor children Plaintiffs cannot sue under ERISA, because they are not participants, beneficiaries, or fiduciaries. Further, to the extent it seeks relief on behalf of JM, Count II is duplicative of Count I and therefore, fails as a matter of law. Finally, there is no right to a jury trial on ERISA claims, and the jury demand should be stricken. A. Standard of Review To avoid a dismissal under Rule 12(b)(6), a complaint must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). Although the Complaint need not contain all of the facts involved in the claim, the Supreme Court has made clear that the claim must be supported by sufficient facts that, if taken as true, make it “plausible” that Plaintiff is entitled to relief. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007) (“A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.”). Ashcroft v. Iqbal, 556 U.S. 662, 665 (2009) “Threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Ashcroft, 556 U.S. at 678. Case 2:16-cv-05763-MMB Document 4-1 Filed 02/09/17 Page 5 of 16 - 6 - 36863804v.10 B. Under the Plan, Plaintiff JM’s Benefit Is To Be Reduced by “Deductible Sources of Income,” Including Both SSDB and Dependent SSDB. 1. Prudential’s Decision to Offset Plaintiff JM’s LTD Benefits with the Dependent SSDB Was Correct as a Matter of Law Under the Terms of the Plan. This case presents a straightforward legal question -- does the language of the plan permit Prudential to deduct from JM’s LTD benefits the SSDB awarded to her two minor children? The answer is spelled out clearly in the plan, which states, “Prudential will deduct from your gross disability payment the following deductible sources of income: … The gross amount that you, your spouse and children receive or are entitled to receive as loss of time disability payments because of your disability under: (a) the United States Social Security Act ….” See Ex. A (emphasis added). As explained above, a dependent child is eligible to receive benefits under the United States Social Security Act based on a parent’s disability. See 42 U.S.C. § 402(d) (every dependent child “of an individual entitled to old-age or disability insurance benefits … shall be entitled to a child’s insurance benefit …”). The Seventh Circuit held that identical plan language permitted Prudential to offset LTD benefits by the amount of Dependent SSDB benefits. See Schultz v. Aviall, Inc. Long Term Disability Plan, 670 F.3d 834, 838 (7th Cir. 2012) (“The only reasonable interpretation of the applicable language is that when a disabled employee’s dependent children receive Social Security payments by reason of the parent-employee’s disability, those benefits are disability benefits based on the employee’s ‘loss of time.’”). The seminal Third Circuit case on point, In re Unisys Corporation Long-Term Disability Plan ERISA Litigation, 97 F.3d 710 (3d Cir. 1996), supports this conclusion. In Unisys Corporation, the employer’s LTD plan stated that the LTD “benefits you receive” may be adjusted if the employee received pension benefits from the employer and/or disability “income Case 2:16-cv-05763-MMB Document 4-1 Filed 02/09/17 Page 6 of 16 - 7 - 36863804v.10 from other sources,” such as Social Security. 97 F.3d at 715-17. The court held that the phrase “benefits you receive” was unambiguous and did not provide for adjustments for disability benefits which the participant’s dependents received from other sources because the LTD plan did not use the words “benefits you and your dependents receive.” Id. In sharp contrast, the plan here explicitly states that the LTD benefits may be reduced by SSDB “that you, your spouse and children receive or are entitled to receive.” Ex. A. See also McElroy v. SmithKline Beecham Health & Welfare Benefits Trust Plan for U.S. Employees, 340 F.3d 139, 142-43 (3d Cir. 2003) (plan permitted offset of LTD benefits with “any payments that a beneficiary receives from: … State disability benefits or similar government benefits”; court held that plan documents granted administrator discretion and, under arbitrary and capricious standard of review, where plan language was ambiguous, plan’s decision to deduct plaintiff’s Railroad Retirement Board (“RRB”) benefits was reasonable because RRB benefits, like state disability benefits, were disability benefits paid by a “government” agency). As recognized by the Seventh Circuit in Schultz, “[v]irtually all courts considering this issue have found that dependent children’s Social Security benefits were subject to offset under nearly identical policy language.” 670 F.3d at 838, citing Mayhew v. Hartford Life & Accident Ins. Co., 2011 WL 5024648, at *5-7 (N.D. Cal. Oct. 21, 2011) (denying insured’s motion to dismiss plan’s counterclaim because Dependent SSDB could be offset against insured’s LTD benefits pursuant to plan language permitting offset of “loss of income” benefits paid to insured or insured’s family under Social Security Act); Fortune v. Group Long Term Disability Plan for Employees of Keyspan Corp., 588 F. Supp. 2d 339, 341-42 (E.D.N.Y. 2008) (denying insured’s motion to amend complaint as futile because plan’s language offsetting “loss of income” benefits provided to insured or her family because of the insured’s disability would permit offset of Case 2:16-cv-05763-MMB Document 4-1 Filed 02/09/17 Page 7 of 16 - 8 - 36863804v.10 Family SSDB), aff'd, 391 Fed. Appx. 74, 80 (2d Cir. 2010); Pennell v. Hartford Life & Accident Ins. Co., 2010 WL 330259, at *5-7 (N.D. Ohio Jan. 21, 2010) (same, under arbitrary and capricious standard); Kennedy v. Hartford Ins. Co., 2009 WL 3007921, at *4-5 (E.D.N.Y. Sept. 21, 2009) (same, under arbitrary and capricious standard), aff'd, 402 Fed. Appx. 610 (2d Cir.2010). See also Gladstein v. Lincoln Fin. Grp., No. CA 14-390-ML, 2015 WL 5615173, at *10-11 (D.R.I. Sept. 23, 2015) (where minor child was eligible for SSDB because of plaintiff’s disability, amounts awarded to minor child were subject to offset and repayment under plan, which provided that the LTD benefit defendant would pay would be reduced by any disability benefits “for which the Insured Employee and any spouse or child is eligible, because of the Insured Employee’s Disability” under the United States Social Security Act). Plaintiffs attempt to argue that the Dependent SSDB payments to the minor children Plaintiffs are not “loss of time disability payments.” (Compl. ¶ 23.) In correspondence with Prudential prior to the filing of the Complaint, Plaintiffs’ counsel cited one California district court case in support of this claim -- Carstens v. U.S. Shoe Corp.’s Long-Term Benefits Disability Plan, 520 F. Supp. 2d 1165 (N.D. Cal. 2007). In Carstens, the court held that Social Security payments to a dependent child could not be used to offset the parent’s LTD payments because they were considered “support payments,” not income replacement. Id. at 1167. The Carstens court reasoned that “loss of time” was a term of art meaning inability to earn wages. Id. The Seventh Circuit in Schultz, however, rejected the Carstens court’s reasoning, explaining that the offset provisions in the plan at issue -- as here -- refer specifically to Social Security disability benefits paid to children, and that such benefits are paid “to compensate the household for the loss of income it has suffered as a result of the disability of one of its breadwinners.” Schultz, 670 F.3d at 839. Indeed, the minor children Plaintiffs are only entitled to Case 2:16-cv-05763-MMB Document 4-1 Filed 02/09/17 Page 8 of 16 - 9 - 36863804v.10 the Dependent SSDB because JM is receiving SSDB, and the amount of their Dependent SSDB is a percentage of JM’s SSDB, which is based on JM’s prior earnings. See 42 U.S.C. § 402(d); 42 U.S.C. § 415. The Seventh Circuit noted that the United States Social Security Act makes no distinction between payments for “loss of time” or “loss of income” or “loss of support.” Id. at 840. The Seventh Circuit continued, The overriding purpose of the benefits-to replace income lost due to a disabled parent’s inability to work, [] is unaltered. Social Security disability benefits, whether primary or dependent, are “loss of time disability” benefits paid because of the primary recipient’s disability. Such payments fall squarely within the offset provisions of the plaintiffs’ disability plans and accordingly may be used to reduce their long-term disability benefits. Id. (citation omitted). Accordingly, Plaintiffs’ Complaint should be dismissed with prejudice in its entirety. 2. The Complaint Fails to Allege Facts That Show Prudential’s Decision Was an Abuse of Discretion. In any event, even if the Court were to disagree, it would only review Prudential’s decision for an abuse of discretion, and Prudential’s interpretation of the plan is unquestionably a reasonable one (it is consistent with the views of nearly every federal judge who has looked at the issue). See Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989); accord Viera v. Life Ins. Co. of North America, 642 F.3d 407, 413 (3d Cir. 2011); Schwing v. The Lilly Health Plan, 562 F.3d 522, 525-26 (3d Cir. 2009). Here, the plan documents drafted by the plan sponsor, SuperMedia, Inc., vest Prudential with discretion to decide claims. The SuperMedia, Inc. General Administration Summary Plan Description (“General Administration SPD”) lists Prudential as the claims administrator for LTD claims, and for benefit appeals, the claims administrator is defined as the “claims fiduciary.” See Ex. E, at 12. The General Administration SPD states, “The claims fiduciary provides final determination regarding your appeals. The claims fiduciary Case 2:16-cv-05763-MMB Document 4-1 Filed 02/09/17 Page 9 of 16 - 10 - 36863804v.10 is authorized to provide this determination and interpret the terms of the Plan/Program at its sole discretion. The claims fiduciary’s decisions regarding appeals are final and binding on all parties.” Id. The General Administration SPD states further: The foregoing claim fiduciaries have full and absolute discretion in the exercise of each and every aspect of their authority under the Program/Plan, including, without limitation, the authority to determine any person’s right to continuation coverage under the Program/Plan, as applicable. … No final action, ruling, or decision of the foregoing claim fiduciaries shall be subject to de novo review in any judicial proceeding; and no final action, ruling, or decision of one of the foregoing claim fiduciaries may be set aside unless it's held to have been arbitrary and capricious by a final judgment of a court having jurisdiction with respect to the issue. Id. at 16. Thus, the governing language of the employer drafted plan documents establishes that Prudential has the sole discretion to interpret the terms of the plan documents and to decide claims for benefits. Plaintiffs allege no facts (nor can they) to suggest that Prudential’s decision to withhold JM’s LTD benefits to recover the overpayment that resulted from the award of Dependent SSDB benefits was an abuse of discretion. See McElroy, 340 F.3d at 142-43. Therefore, the Court should dismiss the Plaintiffs’ Complaint. C. The Minor Children Plaintiffs Have No Standing to Sue under ERISA. Plaintiffs bring two claims under ERISA. Count I is a claim for benefits and arises under 29 U.S.C. § 1132(a)(1)(B), which entitles “a participant or beneficiary” to institute a civil action for benefits against to recover benefits due under a plan. Count II is styled as a claim for “appropriate equitable relief” under 29 U.S.C. § 1132(a)(3). That section of ERISA permits a “participant, beneficiary, or fiduciary” to sue. In this case involving LTD benefits payable only to the participant -- JM -- the minor children Plaintiffs are not entitled to benefits and thus are neither participants nor beneficiaries. See Baldwin v. Univ. of Pittsburgh Med. Ctr., 636 F.3d 69, 74-75 (3d Cir. 2011) (minor children of decedent suing for life and accidental death insurance Case 2:16-cv-05763-MMB Document 4-1 Filed 02/09/17 Page 10 of 16 - 11 - 36863804v.10 proceeds under ERISA plan were not “participants” but made a colorable claim that they were “beneficiaries”). Plaintiffs admit that the minor children Plaintiffs are not “participants” 9 in the plan. (Compl. ¶¶ 25, 34-35); see Baldwin, 636 F.3d at 74-75. Thus the only relevant definitions are that of a “beneficiary” and “fiduciary.” No plaintiff claims to be a fiduciary. ERISA defines “beneficiary” as a “person designated by a participant, or by the terms of an employee benefit plan, who is or may become entitled to a benefit thereunder.” 29 U.S.C. § 1002(8). Plaintiffs allege that the minor children Plaintiffs have a right to sue under ERISA because Prudential “treats plaintiffs DM and OM as beneficiaries by requesting an offset for their benefits.” (Compl. ¶ 39.) This argument fails because a beneficiary must be able to present a colorable claim to receive a benefit under the plan. See Baldwin, 636 F.3d at 75. In Baldwin, the court held that the minor children plaintiffs made out a colorable claim that they were, or might become, entitled to the life and accidental death insurance benefits under the ERISA plan at issue. Id. at 75-78. Life insurance and accidental death insurance plans require designation of beneficiaries, or have default beneficiaries absent such designations, because by their nature, the benefits are not payable to the plan participant, but to someone else when the plan participant dies. Here, unlike Baldwin, the plan does not provide for any payment of LTD benefits to the children of a participant. See generally Ex. A. Thus, the minor children Plaintiffs cannot be “beneficiaries.” Given this, and because Plaintiffs do not allege that the minor children Plaintiffs are fiduciaries, the Court should dismiss the minor children Plaintiffs as they have no standing to sue under ERISA for Plaintiff JM’s LTD benefits under the plan. 9 ERISA defines the term “participant” as “any employee or former employee of an employer ... who is or may become eligible to receive a benefit of any type from an employee benefit plan.” 29 U.S.C. § 1002(7). Case 2:16-cv-05763-MMB Document 4-1 Filed 02/09/17 Page 11 of 16 - 12 - 36863804v.10 D. Count II Fails Because It Does Not Seek Appropriate Relief Under ERISA § 1132(a)(3). The only proper party to bring Count II is JM -- the plan participant. The relief sought is an adjustment to the amount of benefit due. Thus, Count II seeks to recover identical relief to that JM seeks to recover in Count I of the Complaint pursuant to ERISA 29 U.S.C. § 1132 (a)(1)(B). The Court should dismiss Count II because a § 1132(a)(3) claim can only progress if the plaintiff can demonstrate that § 1132(a)(1)(B) alone does not provide an adequate remedy. In Varity Corp. v. Howe, 516 U.S. 489, 512 (1996), the Supreme Court discussed the role of § 1132(a)(3) in the context of the ERISA § 1132 civil enforcement provisions: Four of [§ 1132’s] six subsections focus on specific areas, i.e., the first (wrongful denial of benefits and information), the second (fiduciary obligations related to the plan’s financial integrity), the fourth (tax registration), and the sixth (civil penalties). The language of the other two subsections, the third and fifth, creates two “catchalls,” providing “appropriate equitable relief” for “any” statutory violation. This structure suggests that these “catchall” provisions act as a safety net, offering appropriate equitable relief for injuries caused by violations that § 502 does not elsewhere adequately remedy. Id. at 512 (emphasis added). The remedy allowed under a § 1132 enforcement provision is considered “adequate” if the plaintiff is afforded a direct claim under a primary provision rather than another “catchall” provision. Plaintiff JM has pleaded a claim for benefits under 29 U.S.C. § 1132(a)(1)(B), and that provision is the only one under which she may proceed on her claim for benefits. Under Varity, if Section § 1132(a)(1)(B) provides this adequate remedy, no “other” relief is “appropriate” under § 1132(a)(3). 516 U.S. at 513-14. This is true even if, as here, Plaintiffs attempt to cast their claim for benefits as one instead arising as a claim for equitable relief under the § 1132(a)(3) “catchall” provision. Here, Count II specifically seeks recovery identical to that which JM seeks under Count I -- a declaration that Prudential cannot offset JM’s LTD benefits with the Dependent SSDB. Case 2:16-cv-05763-MMB Document 4-1 Filed 02/09/17 Page 12 of 16 - 13 - 36863804v.10 Therefore, in the alternative, Plaintiffs’ claim under 29 U.S.C. § 1132(a)(3) in Count II should be dismissed because it seeks the same relief sought by Plaintiff JM in Count I under 29 U.S.C. § 1132(a)(1)(B). E. Plaintiffs Have No Right to a Jury Trial Under ERISA or the Seventh Amendment; Therefore, the Court Should Strike Plaintiff’s Jury Demand. The Third Circuit has repeatedly recognized that a jury trial is not available when Congress creates a federal statutory scheme providing for equitable relief unless Congress expressly provides that a jury trial is available. See, e.g., Rex v. Cia. Pervana de Vapores, S.A., 660 F.2d 61, 66 (3d Cir. 1981) (quoting Curtis v. Loether, 415 U.S. 189, 194 (1974)). ERISA is a “comprehensive and reticulated” statute. Nachman Corp. v. Pension Benefit Guar. Corp., 446 U.S. 359, 361 (1980). Nothing in Section 502(a)(1)(B) of ERISA, 10 the statutory provision under which Plaintiffs’ claim arises, mentions a right to a jury trial. In fact, no provision of ERISA provides for a jury trial. Indeed, given ERISA’s comprehensive nature, if Congress had intended to allow jury trials, it would have said so. It did not; therefore, Plaintiffs cannot rely on the statute to support their request for a jury trial. Just as the plain language of ERISA does not provide for a jury trial, the Constitution likewise does not support Plaintiffs’ request for a jury trial. The Seventh Amendment guarantees a right to a jury trial only for “suits at common law.” U.S. Const. Amend. VII. Only those suits “‘in which legal rights [are] to be ascertained and determined, in contradistinction to those where equitable rights alone [are] recognized, and equitable remedies [are] administered[,]’” Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 41 (1989) (citations omitted), constitute “suits at common law.” The historical precursor to a claim for benefits under an ERISA plan is an action 10 ERISA Section 502(a)(1)(B) authorizes a civil action “by a participant or beneficiary . . . to recover benefits due to him under the terms of his 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.” 29 U.S.C. § 1132(a)(1)(B). Case 2:16-cv-05763-MMB Document 4-1 Filed 02/09/17 Page 13 of 16 - 14 - 36863804v.10 to enforce a trust under the common law of trusts, brought in courts of equity, which did not provide for jury trials. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 110 (1989) (“ERISA abounds with the language and terminology of trust law” and thus courts in analyzing ERISA are “guided by principles of trust law”). Therefore, the Constitution offers no support for Plaintiffs’ request for a jury trial. The Third Circuit has consistently held that actions under ERISA are fundamentally equitable in nature; therefore, no right to a jury trial exists. See Pane v. RCA Corp., 868 F.2d 631, 636 (3d Cir. 1989) (claim for benefits under ERISA Section 502(a)(1)(B) is equitable in nature and there is no right to jury trial); Turner v. CF & I Steel Corp., 770 F.2d 43, 46-7 (3d Cir. 1985) (same). Every other federal circuit that has considered the issue agrees. 11 Given this uniform treatment by the courts, district courts in the Third Circuit also have universally rejected jury demands in ERISA Section 502(a) claims, finding that there is no right to a jury trial in ERISA cases. See, e.g., Meshkov v. Unum Provident Corp., 209 F. Supp. 2d 459, 462 (E.D. Pa. 2002) (“Where a plaintiff seeks the protections of ERISA for purposes of collecting benefits, no right to a jury trial attaches to that claim.”); Kuestner v. Health and Welfare Fund, 972 F.Supp. 905, 914 (E.D.Pa. 1997); Zinman v. Prudential Ins. Co. of Am., 909 F. Supp. 279, 281 (E.D. Pa. 1995) (claims pursuant to ERISA § 502(a)(1)(B) are equitable and there is no right to a jury trial). 11 See, e.g., Thomas v. Oregon Fruit Prods. Co., 228 F.3d 991, 996-97 (9th Cir. 2000) (no right to a jury trial under ERISA because in enacting ERISA Congress “‘created a right that is essentially equitable in nature’”); Hampers v. W. R. Grace & Co., 202 F.3d 44, 54 (1st Cir. 2000) (affirming denial demand for a jury trial under ERISA); Langlie v. Onan Corp., 192 F.3d 1137, 1141 (8th Cir. 1999) (“there is no right to a jury trial under ERISA”); Adams v. Cyprus Amax Minerals Co., 149 F.3d 1156, 1162 (10th Cir. 1998) (same); Broaddus v. Fla. Power Corp., 145 F.3d 1283, 1287 n.** (11th Cir. 1998) (same); DeFelice v. Am. Int’l Life Assurance Co. of N.Y., 112 F.3d 61, 64 (2d Cir. 1997) (no right to a jury trial under ERISA); Borst v. Chevron Corp., 36 F.3d 1308, 1324 (5th Cir. 1994) (same); Biggers v. Wittek Indus., Inc., 4 F.3d 291, 298 (4th Cir. 1993) (same); Spinelli v. Gaughan, 12 F.3d 853, 855-58 (9th Cir. 1993) (no right to jury trial on a retaliatory discharge claim under ERISA, Section 502(a)(3)); Reese v. CNH Am., Inc., 574 F.3d 315, 327 (6th Cir. 2009) (noting that the Seventh Amendment “does not guarantee a jury trial in ERISA . . . cases”). Case 2:16-cv-05763-MMB Document 4-1 Filed 02/09/17 Page 14 of 16 - 15 - 36863804v.10 V. CONCLUSION Prudential properly reduced JM’s LTD benefit by the amount of Dependent SSDB awarded to Plaintiffs DM and OM. Accordingly, the Court should dismiss Plaintiffs’ Complaint with prejudice in its entirety and grant any further relief deemed just and appropriate under these circumstances. Alternatively, the Court should dismiss the claims of the minor children Plaintiffs as neither may sue under ERISA, should dismiss Count II as to Plaintiff JM because it duplicates Count I, should strike Plaintiffs’ jury demand, and should grant any further relief deemed just and appropriate under these circumstances. DATED: February 9, 2017 Respectfully submitted, SEYFARTH SHAW LLP By: /s/ Jacob Oslick Jacob Oslick joslick@seyfarth.com SEYFARTH SHAW LLP 620 Eighth Avenue New York, New York 10018 Telephone: (212) 218-5500 Facsimile: (212) 218-5526 Attorneys for Defendant Case 2:16-cv-05763-MMB Document 4-1 Filed 02/09/17 Page 15 of 16 36863804v.10 CERTIFICATE OF SERVICE I hereby certify that on February 9, 2017, I presented the foregoing Defendant Prudential’s Memorandum of Law in Support of Its Motion to Dismiss Plaintiff’s Complaint, or in the alternative to Dismiss the Minor Children Plaintiffs and to Strike Jury Demand, with the Clerk of the Court for filing and uploading to the CM/ECF system, which will send notification of such filing to the following at their e-mail addresses on file with the Court: Samuel A. Dion, Esquire Attorney I.D. No. 55761 1845 Walnut Street Suite 1199 Philadelphia, PA 19103 (t) 215-546-6033 (f) 215-546-6269 Email: samueldion@aol.com /s/ Jacob Oslick One of Defendant’s Attorneys Case 2:16-cv-05763-MMB Document 4-1 Filed 02/09/17 Page 16 of 16 SuperMedia Inc. Bargained for Employees Long Term Disability Coverage Case 2:16-cv-05763-MMB Document 4-2 Filed 02/09/17 Page 1 of 36 Disclosure Notice FOR ARKANSAS RESIDENTS Prudential’s Customer Service Office: The Prudential Insurance Company of America Disability Management Services Claim Division P.O. Box 13480 Philadelphia, Pennsylvania 19176 1-800-842-1718 If Prudential fails to provide you with reasonable and adequate service, you may contact: Arkansas Insurance Department Consumer Services Division 1200 West Third Street Little Rock, Arkansas 72201-1904 1-800-852-5494 FOR ARIZONA RESIDENTS Notice: This certificate of insurance may not provide all benefits and protections provided by law in Arizona. Please read this certificate carefully. FOR FLORIDA RESIDENTS The benefits of the policy providing your coverage are governed by the law of a state other than Florida. FOR INDIANA RESIDENTS Questions regarding your policy or coverage should be directed to: The Prudential Insurance Company of America (800) 842-1718 If you (a) need the assistance of the governmental agency that regulates insurance; or (b) have a complaint you have been unable to resolve with your insurer you may contact the Department of Insurance by mail, telephone or e-mail: State of Indiana Department of Insurance Consumer Services Division 311 West Washington Street, Suite 300 Indianapolis, Indiana 46204 Consumer Hotline: (800) 622-4461; (317) 232-2395 Complaints can be filed electronically at www.in.gov/idoi. Case 2:16-cv-05763-MMB Document 4-2 Filed 02/09/17 Page 2 of 36 FOR MARYLAND RESIDENTS The Group Insurance Contract providing coverage under this certificate was issued in a jurisdiction other than Maryland and may not provide all of the benefits required by Maryland law. FOR OKLAHOMA RESIDENTS Notice: Certificates issued for delivery in Oklahoma are governed by the certificate and Oklahoma laws not the state where the master policy was issued. FOR VERMONT RESIDENTS The coverage provided in this certificate is not subject to regulation by the State of Vermont. FOR WISCONSIN RESIDENTS KEEP THIS NOTICE WITH YOUR INSURANCE PAPERS Problems with Your Insurance? - If you are having problems with your insurance company or agent, do not hesitate to contact the insurance company or agent to resolve your problem. Prudential’s Customer Service Office: The Prudential Insurance Company of America Disability Management Services Claim Division P.O. Box 13480 Philadelphia, PA 19176 1-800-842-1718 You can also contact the Office of the Commissioner of Insurance, a state agency which enforces Wisconsin’s insurance laws, and file a complaint. You can contact the Office of the Commissioner of Insurance by contacting: Office of the Commissioner of Insurance Complaints Department P.O. Box 7873 Madison, WI 53707-7873 1-800-236-8517 608-266-0103 Case 2:16-cv-05763-MMB Document 4-2 Filed 02/09/17 Page 3 of 36 83500 TXN 1005 (S-1) THIS NOTICE IS FOR TEXAS RESIDENTS ONLY IMPORTANT NOTICE AVISO IMPORTANTE To obtain information or make a complaint: Para obtener información o para someter una queja: You may contact the Texas Department of Insurance to obtain information on companies, coverages, rights or complaints at: Puede comunicarse con el Departamento de Seguros de Texas para obtener información acerca de compañías, coberturas, derechos o quejas al: 1-800-252-3439 1-800-252-3439 You may write the Texas Department of Insurance: P.O. Box 149104 Austin, TX 78714-9104 Fax: (512) 475-1771 Web: http://www.tdi.state.tx.us Email: ConsumerProtection@tdi.state.tx.us Puede escribir al Departamento de Seguros de Texas: P.O. Box 149104 Austin, TX 78714-9104 Fax: (512) 475-1771 Web: http://www.tdi.state.tx.us Email: ConsumerProtection@tdi.state.tx.us PREMIUM OR CLAIM DISPUTES: DISPUTAS SOBRE PRIMAS O RECLAMOS: Should you have a dispute concerning your premium or about a claim you should contact Prudential first. If the dispute is not resolved, you may contact the Texas Department of Insurance. Si tiene una disputa concerniente a su prima o a un reclamo, debe comunicarse con Prudential primero. Si no se resuelve la disputa, puede entonces comunicarse con el departamento (TDI). ATTACH THIS NOTICE TO YOUR POLICY: UNA ESTE AVISO A SU POLIZA: This notice is for information only and does not become a part or condition of the attached document. Este aviso es sólo para propósito de información y no se convierte en parte o condición del documento adjunto. Case 2:16-cv-05763-MMB Document 4-2 Filed 02/09/17 Page 4 of 36 83500 CBH-LTD-1015 (50662-13) 1 Benefit Highlights LONG TERM DISABILITY PLAN This long term disability plan provides financial protection for you by paying a portion of your income while you have a long period of disability. The amount you receive is based on the amount you earned before your disability began. In some cases, you can receive disability payments even if you work while you are disabled. Benefits start after the elimination period. Program Date: January 1, 2012 Contract Holder: SUPERMEDIA INC. Group Contract Number: G-50662-TX Covered Classes: All Full-time and Part-time Employees who are covered by a collective bargaining agreement between the Employer and the following Unions: CBA’s 174-180 Union Local-CWA 1118, 1105, 1122 SuperMedia 13 NY, re-hire date on or after 02-01-2009 CBA’s 186-190 Union Local-CWA 13500 SuperMedia 13 PA, re-hire date on or after 02-08-2009 CBA’s 185, 192-195 Union Local-CWA 2108, 2222, 2202, 2201, 2204 SuperMedia 13 MD/VA, re-hire date on or after 10-04-2009 CBA’s 181, 182, 183 Union Local-CWA 1025 SuperMedia 13 NJ, re-hire on or after 10-04-2009. CBA 135 Union Local-CWA 1301-1301 Sales, rehire date on or after 01-01- 2007. CBA 136-137 Union Local-1302, 2213 Clerical, rehire date on or after 01-01- 2007. Minimum Hours Requirement: Full-time Employees must be working or scheduled to work at least 35 hours per week. Part-time Employees must be working or scheduled to work at least 20 hours per week. Employment Waiting Period: You may need to work for your Employer for a continuous period before you become eligible for the plan. The period must be agreed upon by your Employer and Prudential. Your Employer will let you know about this waiting period. Elimination Period: The longer of 26 weeks and the length of time it takes you to exhaust your Short Term Disability Benefits. Benefits begin the day after the Elimination Period is completed. Case 2:16-cv-05763-MMB Document 4-2 Filed 02/09/17 Page 5 of 36 83500 CBH-LTD-1015 (50662-13) 2 Monthly Benefit: Your monthly benefit depends on the Option for which you are enrolled. Option 1: 50% of your monthly earnings, but not more than the Maximum Monthly Benefit Option 2: 66 2/3% of your monthly earnings, but not more than the Maximum Monthly Benefit. Your benefit may be reduced by deductible sources of income and disability earnings. Some disabilities may not be covered or may be limited under this coverage. Maximum Monthly Benefit: Your maximum monthly benefit depends on the Option for which you are enrolled. Option 1: $9,583.00. Option 2: $12,778.00. Maximum Period of Benefits: Your Age on Your Maximum Benefit Date Disability Duration Begins Under age 60 To age 65 Age 60 60 months Age 61 48 months Age 62 42 months Age 63 36 months Age 64 30 months Age 65 24 months Age 66 21 months Age 67 18 months Age 68 15 months Age 69 and over 12 months No contributions are required for your coverage while you are receiving payments under this plan. Cost of Coverage: The long term disability plan is provided to you on a contributory basis. You will be informed of the amount of your contribution when you enroll. The above items are only highlights of your coverage. For a full description please read this entire Group Insurance Certificate. IMPORTANT INFORMATION FOR RESIDENTS OF CERTAIN STATES: There are state-specific requirements that may change the provisions under the coverage(s) described in this Group Insurance Certificate. If you live in a state that has such requirements, those requirements will apply to your coverage(s) and are made a part of your Group Insurance Certificate. Prudential has a website that describes these state-specific requirements. You may access the website at www.prudential.com/etonline. When you access the website, you will be asked to enter your state of residence and your Access Code. Your Access Code is 50662. If you are unable to access this website, want to receive a printed copy of these requirements or have any questions, call Prudential at 1-866-439-9026. Case 2:16-cv-05763-MMB Document 4-2 Filed 02/09/17 Page 6 of 36 83500 CTC-1001 (50662-13) 3 Table of Contents BENEFIT HIGHLIGHTS - LONG TERM DISABILITY PLAN ................................................................1 CERTIFICATE OF COVERAGE ............................................................................................................4 GENERAL PROVISIONS.......................................................................................................................5 LONG TERM DISABILITY COVERAGE - BENEFIT INFORMATION................................................10 LONG TERM DISABILITY COVERAGE - OTHER SERVICES .........................................................23 LONG TERM DISABILITY COVERAGE - REHABILITATION SERVICES .......................................24 LONG TERM DISABILITY COVERAGE - CLAIM INFORMATION....................................................25 Case 2:16-cv-05763-MMB Document 4-2 Filed 02/09/17 Page 7 of 36 83500 CERT-1008 (S-2) 4 The Prudential Insurance Company of America Certificate of Coverage The Prudential Insurance Company of America (referred to as Prudential) welcomes you to the plan. This is your Certificate of Coverage as long as you are eligible for coverage and you meet the requirements for becoming insured. You will want to read this certificate and keep it in a safe place. Sign your name in the space below when you receive this certificate. Prudential has written this certificate in booklet format to be understandable to you. If you should have any questions about the content or provisions, please consult Prudential’s claims paying office. Prudential will assist you in any way to help you understand your benefits. The benefits described in this Certificate of Coverage are subject in every way to the entire Group Contract which includes this Group Insurance Certificate. Prudential’s Address The Prudential Insurance Company of America 751 Broad Street Newark, New Jersey 07102 ____________________________________________ Signature of Employee Case 2:16-cv-05763-MMB Document 4-2 Filed 02/09/17 Page 8 of 36 83500 CGP-1014 (50662-13) 5 General Provisions What Is the Certificate? This certificate is a written document prepared by Prudential which tells you: the coverage to which you may be entitled; to whom Prudential will make a payment; and the limitations, exclusions and requirements that apply within a plan. General Definitions used throughout this certificate include: You means a person who is eligible for Prudential coverage. We, us, and our means The Prudential Insurance Company of America. Employee means a person who is in active employment with the Employer for the minimum hours requirement. Active employment means you are working for your Employer for earnings that are paid regularly and that you are performing the material and substantial duties of your regular occupation. For Full-time Employees, you must be working or scheduled to work at least 35 hours per week. For Part-time Employees, you must be working or scheduled to work at least 20 hours per week. Your worksite must be: your Employer’s usual place of business; an alternate work site at the direction of your Employer; or a location to which your job requires you to travel. Normal vacation and other Employer paid time off are considered active employment. You are not eligible to participate in the Plan if you are: a part-time employee and working or scheduled to work less than 20 hours per week; under an individual employment contract (unless the contract or agreement specifies that you are eligible to participate in the Plan); a leased employee; not paid directly by the Employer; an independent contractor, temporary, occasional, or seasonal employee (regardless of what a court or government agency may determine about your employment status); or Case 2:16-cv-05763-MMB Document 4-2 Filed 02/09/17 Page 9 of 36 83500 CGP-1014 (50662-13) 6 an individual whose employment status is continued under a severance or termination agreement. Employer means the Contract Holder, and includes any division, subsidiary or affiliate who is reported to Prudential in writing for inclusion under the Group Contract, provided that Prudential has approved such request. Contract Holder means the Employer to whom the Group Contract is issued. Insured means any person covered under a coverage. Plan means a line of coverage under the Group Contract. When Are You Eligible for Coverage? If you are working for your Employer in a covered class, the date you are eligible for coverage is the later of: the plan’s program date; and the date you elect to enroll and your evidence of insurability is approved by us if applicable; and the day after you complete your employment waiting period. You do not have to complete a new employment waiting period if: your insurance ends because you stop working for your Employer for a strike; and you resume working for your Employer in a covered class within 12 months after your insurance ended. You do not have to complete a new employment waiting period if: your insurance ends because you stop working for your Employer for any reason other than a strike; and you resume working for your Employer in a covered class within 30 days after your insurance ended. Covered class means your class as determined by the Contract Holder. This will be done under the Contract Holder’s rules, on dates the Contract Holder sets. The Contract Holder must not discriminate among persons in like situations. You cannot belong to more than one class for insurance on each basis, Contributory or Non-contributory Insurance, under a plan. “Class" means covered class, benefit class or anything related to work, such as position or earnings, which affects the insurance available. If you are an employee of more than one Employer included under the Group Contract, for the insurance you will be considered an employee of only one of those Employers. Your service with the others will be treated as service with that one. Employment waiting period means the continuous period of time that you must be in active employment before you are eligible for coverage under a plan. The period must be agreed upon by the Employer and Prudential. Case 2:16-cv-05763-MMB Document 4-2 Filed 02/09/17 Page 10 of 36 83500 CGP-1014 (50662-13) 7 When Does Your Coverage Begin? Provided you make the required contributions, you will be covered at 12:01 a.m. on the latest of: the date you complete your employment waiting period if applicable, if you enroll for coverage by the date shown in your new hire enrollment materials from your Employer; the date Prudential approves your application, if evidence of insurability is required; or the date you are in active employment. If you are not in active employment on the date your coverage would normally begin, it will begin on the date you return to active employment. The Contract Holder may not waive an evidence of insurability requirement for any reason. Evidence of insurability means a statement of your medical history which Prudential will use to determine if you are approved for coverage. When Is Evidence of Insurability Required? In any of the situations listed below, you must give evidence of insurability, provided at your expense. This requirement will be met when Prudential decides the evidence is satisfactory. You enroll for coverage after the date specified in the new hire enrollment materials you receive from your Employer when first eligible to enroll. You re-enroll for coverage after you voluntarily cancelled it. You enroll after any coverage ends because you did not pay a required contribution. You request an increase to your coverage from Option 1 to Option 2. An evidence of insurability form can be obtained from us. How Do You Enroll For Coverage? You must enroll on a form or through a process approved by Prudential and agree to pay the required contributions. When Will Changes to Your Coverage Take Effect? Once your coverage begins, any increased or additional coverage will take effect on the latest of: 1. the effective date of the change, if you are: in active employment; on leave of absence; or working reduced hours, for reasons other than disability. 2. the date Prudential approves your application, if evidence of insurability is required; or Case 2:16-cv-05763-MMB Document 4-2 Filed 02/09/17 Page 11 of 36 83500 CGP-1014 (50662-13) 8 3. the date you return to active employment, if you are not in active employment. An increase in your long term disability coverage may be subject to a pre-existing condition limitation as described in the plan. Any decrease in coverage will take effect immediately upon the effective date of the change. Neither an increase nor a decrease in coverage will affect a payable claim that occurs prior to the increase or decrease. Reduced hours means you are working less than the number of hours required to be considered in active employment. Payable claim means a claim for which Prudential is liable under the terms of the Group Contract. Once Your Coverage Begins, What Happens If You Are On A Leave of Absence? If you are on a leave of absence, other than an approved FML leave of absence, your coverage is suspended until you are in active employment. Leave of absence means you are temporarily absent from active employment, including absence due to a strike, under your Employer’s leave of absence policy. Your normal vacation time or any period of disability is not considered a leave of absence. When Does Your Coverage End? Your coverage under the Group Contract or a plan ends on the earliest of: the date the Group Contract or a plan is canceled; the date you are no longer a member of a covered class; the date your covered class is no longer covered; the last day of the period for which you made any required contributions; the last day you are in active employment except as provided under the Once Your Coverage Begins, What Happens If You Are On A Leave of Absence? section; or the date you are no longer in active employment due to a disability that is not covered under the plan. The disabilities that are not covered are shown in the What Disabilities Are Not Covered Under Your Plan? section of the Long Term Disability Coverage Benefit Information pages. Does the Coverage under a Plan Replace or Affect any Workers’ Compensation or State Disability Insurance? The coverage under a plan does not replace or affect the requirements for coverage by workers’ compensation or state disability insurance. Case 2:16-cv-05763-MMB Document 4-2 Filed 02/09/17 Page 12 of 36 83500 CGP-1014 (50662-13) 9 Does Your Employer Act as Prudential’s Agent? For purposes of the Group Contract, your Employer acts on its own behalf. Under no circumstances will your Employer be deemed the agent of Prudential. Does This Certificate Address Any Rights to Other Benefits or Affect Your Employment with Your Employer? This certificate sets forth only the terms and conditions for coverage and receipt of benefits for Long Term Disability. It does not address and does not confer any rights, or take away any rights, if any, to other benefits or employment with your Employer. Your rights, if any, to other benefits or employment are solely determined by your Employer. Prudential plays no role in determining, interpreting, or applying any such rights that may or may not exist. How Can Statements Made in Your Application for this Coverage be Used? Prudential considers any statements you or your Employer make in a signed application for coverage a representation and not a warranty. If any of the statements you or your Employer make are not complete and/or not true at the time they are made, we can: reduce or deny any claim; or cancel your coverage from the original effective date. If a statement is used in a contest, a copy of that statement will be furnished to you or, in the event of your death or incapacity, to your eligible survivor or personal representative. A statement will not be contested after the amount of insurance has been in force, before the contest, for at least two years during your lifetime. We will use only statements made in a signed application as a basis for doing this. If the Employer gives us information about you that is incorrect, we will: use the facts to decide whether you have coverage under the plan and in what amounts; and make a fair adjustment of the premium. Case 2:16-cv-05763-MMB Document 4-2 Filed 02/09/17 Page 13 of 36 83500 CBI-LTD-1168 (50662-13) 10 Long Term Disability Coverage BENEFIT INFORMATION How Does Prudential Define Disability? You are disabled when Prudential determines that: you are unable to perform the material and substantial duties of your regular occupation due to your sickness or injury; and you are under the regular care of a doctor; and you have a 20% or more loss in your monthly earnings due to that sickness or injury. After 18 months of payments, you are disabled when Prudential determines that due to the same sickness or injury: you are unable to perform the duties of any gainful occupation for which you are reasonably fitted by education, training or experience; and you are under the regular care of a doctor. The loss of a professional or occupational license or certification does not, in itself, constitute disability. Prudential will assess your ability to work and the extent to which you are able to work by considering the facts and opinions from: your doctors; and doctors, other medical practitioners or vocational experts of our choice. When we may require you to be examined by doctors, other medical practitioners or vocational experts of our choice, Prudential will pay for these examinations. We can require examinations as often as it is reasonable to do so. We may also require you to be interviewed by an authorized Prudential Representative. Refusal to be examined or interviewed may result in denial or termination of your claim. Material and substantial duties means duties that: are normally required for the performance of your regular occupation; and cannot be reasonably omitted or modified, except that if you are required to work on average in excess of 40 hours per week, Prudential will consider you able to perform that requirement if you are working or have the capacity to work 40 hours per week. Regular occupation means the occupation you are routinely performing when your disability begins. Prudential will look at your occupation as it is normally performed instead of how the work tasks are performed for a specific employer or at a specific location. Case 2:16-cv-05763-MMB Document 4-2 Filed 02/09/17 Page 14 of 36 83500 CBI-LTD-1168 (50662-13) 11 Sickness means any disorder of your body or mind, but not an injury; pregnancy including abortion, miscarriage or childbirth. Disability must begin while you are covered under the plan. Injury means a bodily injury that: is the direct result of an accident; is not related to any cause other than the accident; and results in immediate disability. Disability must begin while you are covered under the plan. Regular care means: you personally visit a doctor as frequently as is medically required, according to generally accepted medical standards, to effectively manage and treat your disabling condition(s); and you are receiving the most appropriate treatment and care, which conforms with generally accepted medical standards, for your disabling condition(s) by a doctor whose specialty or experience is the most appropriate for your disabling condition(s), according to generally accepted medical standards. Doctor means a person who is performing tasks that are within the limits of his or her medical license; and is licensed to practice medicine and prescribe and administer drugs or to perform surgery; or has a doctoral degree in Psychology (Ph.D. or Psy.D.) whose primary practice is treating patients; or is a legally qualified medical practitioner according to the laws and regulations of the governing jurisdiction. Prudential will not recognize any relative including, but not limited to, you, your spouse, or a child, brother, sister, or parent of you or your spouse as a doctor for a claim that you send to us. Monthly earnings For CBA 135 Union Local - CWA 1301-1301 Sales Monthly earnings means your gross average monthly income from your Employer at the end of the month prior to your date of disability. Monthly earnings includes the average daily incentive (ADI) and; average commissions and short term incentives (STI) received per month during the shorter of: (i) the 12 month period just prior to your date of disability; or (ii) your period of employment. Monthly earnings does not include income received from bonuses, overtime pay, any other extra compensation, any other income from your Employer, or income received from sources other than your Employer. Case 2:16-cv-05763-MMB Document 4-2 Filed 02/09/17 Page 15 of 36 83500 CBI-LTD-1168 (50662-13) 12 For all other Employees Monthly earnings means your gross average monthly income from your Employer at the end of the month prior to your date of disability. Monthly earnings includes the average commissions and short term incentives (STI) received per month during the shorter of: (i) the 12 month period just prior to your date of disability; or (ii) your period of employment. Monthly earnings does not include income received from bonuses, overtime pay, any other extra compensation, any other income from your Employer, or income received from sources other than your Employer. Gainful occupation means an occupation, including self employment, that is or can be expected to provide you with an income within 12 months of your return to work, that exceeds 60% of your indexed monthly earnings. Indexed monthly earnings means your monthly earnings as adjusted on each July 1 provided you were disabled for all of the 12 months before that date. Your monthly earnings will be adjusted on that date by the lesser of 10% or the current annual percentage increase in the Consumer Price Index. Your indexed monthly earnings may increase or remain the same, but will never decrease. The Consumer Price Index (CPI-W) is published by the U.S. Department of Labor. Prudential reserves the right to use some other similar measurement if the Department of Labor changes or stops publishing the CPI-W. Indexing is only used to determine your percentage of lost earnings while you are disabled and working. How Long Must You Be Disabled Before Your Benefits Begin? You must be continuously disabled through your elimination period. Prudential will treat your disability as continuous if your disability stops for 30 consecutive days or less during the elimination period. The days that you are not disabled will not count toward your elimination period. Your elimination period is the longer of 26 weeks and the length of time it takes you to exhaust your Short Term Disability Benefits. Elimination period means a period of continuous disability which must be satisfied before you are eligible to receive benefits from Prudential. If you become covered under a group long term disability plan that replaces this plan during your elimination period, your elimination period under this plan will not be met. Can You Satisfy Your Elimination Period If You Are Working? Yes, provided you meet the definition of disability. When Will You Begin to Receive Disability Payments? You will begin to receive payments when we approve your claim, providing the elimination period has been met. We will send you a payment each month for any period for which Prudential is liable. Case 2:16-cv-05763-MMB Document 4-2 Filed 02/09/17 Page 16 of 36 83500 CBI-LTD-1168 (50662-13) 13 How Much Will Prudential Pay If You Are Disabled and Not Working? We will follow this process to figure out your monthly payment: 1. If you are enrolled for Option 1, multiply your monthly earnings by 50%. If you are enrolled for Option 2, multiply your monthly earnings by 66 2/3%. 2. If you are enrolled for Option 1, the maximum monthly benefit is $9,583.00. If you are enrolled for Option 2, the maximum monthly benefit is $12,778.00. 3. Compare the answer in item 1 with the maximum monthly benefit in item 2. The lesser of these two amounts is your gross disability payment. 4. Subtract from your gross disability payment any deductible sources of income. The greater of the amount figured in item 4 and the minimum monthly benefit is your monthly payment. After the elimination period, if you are disabled for less than 1 month, we will send you 1/30th of your payment for each day of disability. Monthly payment means your payment after any deductible sources of income have been subtracted from your gross disability payment. Maximum monthly benefit means the maximum benefit amount for which you are insured under this plan. Gross disability payment means the benefit amount before Prudential subtracts deductible sources of income and disability earnings. Deductible sources of income means income from deductible sources listed in the plan that you receive or are entitled to receive while you are disabled. This income will be subtracted from your gross disability payment. How Much Will Prudential Pay If You Work While You Are Disabled? We will send you the monthly payment if you are disabled and your monthly disability earnings, if any, are less than 20% of your indexed monthly earnings due to the same sickness or injury. If you are disabled and your monthly disability earnings are 20% or more of your indexed monthly earnings, due to the same sickness or injury, Prudential will figure your payment as follows: While working, you will receive payments based on the percentage of income you are losing due to your disability. 1. Subtract your disability earnings from your indexed monthly earnings. 2. Divide the answer in item 1 by your indexed monthly earnings. This is your percentage of lost earnings. 3. Multiply your monthly payment by the answer in item 2. This is the amount Prudential will pay you each month. Case 2:16-cv-05763-MMB Document 4-2 Filed 02/09/17 Page 17 of 36 83500 CBI-LTD-1168 (50662-13) 14 During the first 18 months of disability payments, if your monthly disability earnings exceed 80% of your indexed monthly earnings, Prudential will stop sending you payments and your claim will end. Beyond 18 months of disability payments, if your monthly disability earnings exceed 60% of your indexed monthly earnings, Prudential will stop sending you payments and your claim will end. Prudential may require you to send proof of your monthly disability earnings on a monthly basis. We will adjust your payment based on your monthly disability earnings. As part of your proof of disability earnings, we can require that you send us appropriate financial records, including copies of your IRS federal income tax return, W-2’s and 1099’s, which we believe are necessary to substantiate your income. Disability earnings means the earnings which you receive while you are disabled and working, plus the earnings you could receive if you were working to your greatest extent possible. This would be, based on your restrictions and limitations: During the first 18 months of disability payments, the greatest extent of work you are able to do in your regular occupation, that is reasonably available. Beyond 18 months of disability payments, the greatest extent of work you are able to do in any occupation, that is reasonably available, for which you are reasonably fitted by education, training or experience. Salary continuance paid to supplement your disability earnings will not be considered payment for work performed. What Happens If Your Disability Earnings Fluctuate? If your disability earnings are expected to fluctuate widely from month to month, Prudential may average your disability earnings over the most recent 3 months to determine if your claim should continue subject to all other terms and conditions in the plan. If Prudential averages your disability earnings, we will terminate your claim if: During the first 18 months of disability payments, the average of your disability earnings from the last 3 months exceeds 80% of indexed monthly earnings; or Beyond 18 months of disability payments, the average of your disability earnings from the last 3 months exceeds 60% of indexed monthly earnings. We will not pay you for any month during which disability earnings exceed the above amounts. What Are Deductible Sources of Income? Prudential will deduct from your gross disability payment the following deductible sources of income: 1. The amount that you receive as loss of time benefits under: (a) a workers’ compensation law; Case 2:16-cv-05763-MMB Document 4-2 Filed 02/09/17 Page 18 of 36 83500 CBI-LTD-1168 (50662-13) 15 (b) an occupational disease law; or (c) any other act or law with similar intent. 2. The amount that you receive or are entitled to receive as loss of time disability income payments under any: (a) state compulsory benefit act or law. (b) insurance or a health or welfare plan or other group insurance plan where the Employer, directly or indirectly, has paid all or part of the cost. (c) governmental retirement system as the result of your job with your Employer. 3. The gross amount that you, your spouse and children receive or are entitled to receive as loss of time disability payments because of your disability under: (a) the United States Social Security Act; (b) the Railroad Retirement Act; (c) the Canada Pension Plan; (d) the Quebec Pension Plan; or (e) any similar plan or act. Amounts paid to your former spouse or to your children living with such spouse will not be included. 4. The gross amount that you receive as retirement payments or the gross amount your spouse and children receive as retirement payments because you are receiving payments under: (a) the United States Social Security Act; (b) the Railroad Retirement Act; (c) the Canada Pension Plan; (d) the Quebec Pension Plan; or (e) any similar plan or act. Benefits paid to your former spouse or to your children living with such spouse will not be included. 5. The amount that you: (a) receive as disability payments under your Employer’s retirement plan; or (b) receive as retirement payments when you reach normal retirement age, as defined in your Employer’s retirement plan. Case 2:16-cv-05763-MMB Document 4-2 Filed 02/09/17 Page 19 of 36 83500 CBI-LTD-1168 (50662-13) 16 Disability payments under a retirement plan will be those benefits which are paid due to disability and do not reduce the retirement benefits which would have been paid if the disability had not occurred. Retirement payments will be those benefits which are based on your Employer’s contribution to the retirement plan. Disability benefits which reduce the retirement benefits under the plan will also be considered as a retirement benefit. Amounts received do not include amounts rolled over or transferred to any eligible retirement plan. Prudential will use the definition of eligible retirement plan as defined in Section 402 of the Internal Revenue Code including any future amendments which affect the definition. 6. The amount you receive under the maritime doctrine of maintenance, wages and cure. This includes only the “wages” part of such benefits. 7. The amount that you receive, due to your disability, from a third party (after subtracting attorney’s fees) by judgment, settlement or otherwise. 8. The amount of loss of time benefits that you receive or are entitled to receive under any salary continuation or accumulated sick leave to the extent that your monthly payment and deductible sources of income, including any other group disability benefits, exceed or would exceed 100% of your monthly earnings. 9. The amount that you receive from a partnership, proprietorship or any similar draws. 10. The amount that you receive or are entitled to receive under any unemployment income act or law due to the end of employment with your Employer. With the exception of retirement payments, or amounts that you receive from a partnership, proprietorship or any similar draws, Prudential will only subtract deductible sources of income which are payable as a result of the same disability. We will not reduce your payment by your Social Security retirement payments if your disability begins after age 65 and you were already receiving Social Security retirement payments. Law, plan or act means the original enactment of the law, plan or act and all amendments. Retirement plan means a defined contribution plan or defined benefit plan. These are plans which provide retirement benefits to employees and are not funded entirely by employee contributions. Salary continuation or accumulated sick leave means continued payments to you by your Employer of all or part of your monthly earnings, after you become disabled as defined by the Group Contract. This continued payment must be part of an established plan maintained by your Employer for the benefit of an employee covered under the Group Contract. Salary continuation or accumulated sick leave does not include compensation paid to you by your Employer for work you actually perform after your disability begins. Such compensation is considered disability earnings, and would be taken into account as such, in calculating your monthly payment. Case 2:16-cv-05763-MMB Document 4-2 Filed 02/09/17 Page 20 of 36 83500 CBI-LTD-1168 (50662-13) 17 What Are Not Deductible Sources of Income? Prudential will not deduct from your gross disability payment income you receive from, but not limited to, the following sources: 401(k) plans; profit sharing plans; thrift plans; tax sheltered annuities; stock ownership plans; non-qualified plans of deferred compensation; pension plans for partners; military pension and disability income plans; credit disability insurance; franchise disability income plans; no-fault motor vehicle insurance; a retirement plan from another Employer; individual retirement accounts (IRA). What If Subtracting Deductible Sources of Income Results in a Zero Benefit? (Minimum Benefit) The minimum monthly payment is the greater of (a) 10% of the gross disability payment otherwise payable and (b) $100. Prudential may apply this amount toward an outstanding overpayment. What Happens When You Receive a Cost of Living Increase from Deductible Sources of Income? Once Prudential has subtracted any deductible source of income from your gross disability payment, Prudential will not further reduce your payment due to a cost of living increase from that source. What If Prudential Determines that You May Qualify for Deductible Income Benefits? If we determine that you may qualify for benefits under item 1, 2, or 3 in the deductible sources of income section, we will estimate your entitlement to these benefits. We can reduce your payment by the estimated amount if such benefits have not been awarded. Case 2:16-cv-05763-MMB Document 4-2 Filed 02/09/17 Page 21 of 36 83500 CBI-LTD-1168 (50662-13) 18 However, we will NOT reduce your payment by the estimated amount under item 1, 2, or 3 in the deductible sources of income section if you: apply for the benefits; appeal any denial to all administrative levels Prudential feels are necessary; and sign Prudential’s Reimbursement Agreement form. This form states that you promise to pay us any overpayment caused by an award. If your payment has been reduced by an estimated amount, your payment will be adjusted when we receive proof: of the amount awarded; or that benefits have been denied and all appeals Prudential feels are necessary have been completed. In this case, a lump sum refund of the estimated amount will be made to you. If we determine that you may qualify for benefits under item 8 or 10 in the deductible sources of income section, we will estimate your entitlement to these benefits. We can reduce your payment by the estimated amount if such benefits have not been received. If your payment has been reduced by an estimated amount, your payment will be adjusted when we receive proof: of the amount received; or that benefits have been denied. In this case, a lump sum refund of the estimated amount will be made to you. What Happens If You Receive a Lump Sum Payment? If you receive a lump sum payment from any deductible source of income, the lump sum will be pro-rated on a monthly basis over the time period for which the sum was given. If no time period is stated, we will use a reasonable one. How Long Will Prudential Continue to Send You Payments? Prudential will send you a payment each month up to the maximum period of payment. Your maximum period of payment is: Your Age on Date Your Maximum Period Disability Begins of Benefits Under age 60 To age 65 Age 60 60 months Age 61 48 months Age 62 42 months Age 63 36 months Age 64 30 months Age 65 24 months Age 66 21 months Age 67 18 months Case 2:16-cv-05763-MMB Document 4-2 Filed 02/09/17 Page 22 of 36 83500 CBI-LTD-1168 (50662-13) 19 Age 68 15 months Age 69 and over 12 months We will stop sending you payments while you are incarcerated as a result of a conviction. We will stop sending you payments and your claim will end on the earliest of the following: 1. During the first 18 months of payments, when you are able to work in your regular occupation on a part-time basis but you choose not to; after 18 months of payments, when you are able to work in any gainful occupation on a part-time basis but you choose not to. 2. The end of the maximum period of payment. 3. The date you are no longer disabled under the terms of the plan. 4. The date you fail to submit proof of continuing disability satisfactory to Prudential. 5. The date your disability earnings exceed the amount allowable under the plan. 6. The date you die. 7. The date you decline to participate in a rehabilitation program that Prudential considers appropriate for your situation and that is approved by an independent doctor. Maximum period of payment means the longest period of time Prudential will make payments to you for any one period of disability. Part-time basis means the ability to work and earn 20% or more of your indexed monthly earnings. What Disabilities Have a Limited Pay Period Under Your Plan? Disabilities due to a sickness or injury which, as determined by Prudential, are primarily based on self-reported symptoms, mental illness or substance related disorders have a limited pay period during your lifetime. The limited pay period for self-reported symptoms is 12 months during your lifetime. The limited pay period for mental illness is 12 months during your lifetime. The limited pay period for substance related disorders is 12 months during your lifetime. Prudential will continue to send you payments for disabilities due in whole or part to mental illness beyond the 12 month period if you meet one or both of these conditions: 1. If you are confined to a hospital or institution at the end of the 12 month period, Prudential will continue to send you payments during your confinement. If you are still disabled when you are discharged, Prudential will send you payments for a recovery period of up to 90 days. If you become reconfined at any time during the recovery period and remain confined for at least 14 days in a row, Prudential will send payments during that additional confinement and for one additional recovery period up to 90 more days. Case 2:16-cv-05763-MMB Document 4-2 Filed 02/09/17 Page 23 of 36 83500 CBI-LTD-1168 (50662-13) 20 2. In addition to item 1, if, after the 12 month period for which you have received payments, you continue to be disabled and subsequently become confined to a hospital or institution for at least 14 days in a row, Prudential will send payments during the length of the confinement. Prudential will not pay beyond the limited pay period as indicated above, or the maximum period of payment, whichever occurs first. Prudential will not apply the mental illness limitation to dementia if it is a result of: stroke; trauma; viral infection; Alzheimer’s disease; or other conditions not listed which are not usually treated by a mental health provider or other qualified provider using psychotherapy, psychotropic drugs, or other similar methods of treatment as standardly accepted in the practice of medicine. Self-reported symptoms means the manifestations of your condition, which you tell your doctor, that are not verifiable using tests, procedures and clinical examinations standardly accepted in the practice of medicine. Examples of self-reported symptoms include, but are not limited to headache, pain, fatigue, stiffness, soreness, ringing in ears, dizziness, numbness and loss of energy. Mental illness means a psychiatric or psychological condition regardless of cause. Mental illness includes but is not limited to schizophrenia, depression, manic depressive or bipolar illness, anxiety, somatization, adjustment disorders or other conditions. These conditions are usually treated by a mental health provider or other qualified provider using psychotherapy, psychotropic drugs, or other similar methods of treatment as standardly accepted in the practice of medicine. Mental illness does not include substance abuse related disorders. Substance related disorders means alcoholism or the non-medical use of narcotics, sedatives, stimulants, hallucinogens or any other such substance. Confined or confinement for this section means a hospital stay of at least 8 hours per day. Hospital or institution means an accredited facility licensed to provide care and treatment for the condition causing your disability. What Disabilities Are Not Covered Under Your Plan? Your plan does not cover any disabilities caused by, contributed to by, or resulting from your: intentionally self-inflicted injuries; active participation in a riot; or commission of a crime for which you have been convicted under state or federal law. Your plan does not cover a disability due to a pre-existing condition. Case 2:16-cv-05763-MMB Document 4-2 Filed 02/09/17 Page 24 of 36 83500 CBI-LTD-1168 (50662-13) 21 Your plan does not cover a disability due to war, declared or undeclared, or any act of war. What Is a Pre-Existing Condition? You have a pre-existing condition if both 1. and 2. are true: 1. You received medical treatment, consultation, care or services, including diagnostic measures, or took prescribed drugs or medicines, or followed treatment recommendation in the 3 months just prior to your effective date of coverage or the date an increase in benefits would otherwise be available. 2. Your disability begins within 12 months of the date your coverage under the plan becomes effective. How Does a Pre-Existing Condition Affect an Increase in Your Benefits? If there is an increase in your benefits due to an amendment of the plan or your enrollment in another plan option, a benefit limit will apply if your disability is due to a pre-existing condition. You will be limited to the benefits you had on the day before the increase. The increase will not take effect until your disability ends. How Do the Pre-Existing Condition Provisions Work If You Were Covered Under Your Employer’s Prior Plan? Special rules apply to pre-existing conditions, if this long term disability plan replaces your Employer’s prior plan and: you were covered by that plan on the day before this plan became effective; and you became covered under this plan within thirty-one days of its effective date. The special rules are: 1. If the Employer’s prior plan did not have a pre-existing condition exclusion or limitation, then a pre-existing condition will not be excluded or limited under this plan. 2. If the Employer’s prior plan did have a pre-existing condition exclusion or limitation, then the limited time does not end after the first 12 months of coverage. Instead it will end on the date any equivalent limit would have ended under the Employer’s prior plan. 3. If the change from your Employer’s prior plan to this plan of coverage would result in an increase in your amount of benefits, the benefits for your disability that is due to a pre- existing sickness or injury will not increase. Instead the benefits are limited to the amount you had on the day before the plan change. This applies whether or not the Employer’s prior plan had a pre-existing condition exclusion or limitation. Case 2:16-cv-05763-MMB Document 4-2 Filed 02/09/17 Page 25 of 36 83500 CBI-LTD-1168 (50662-13) 22 What Happens If You Return to Work Full Time and Your Disability Occurs Again? If you have a recurrent disability, as determined by Prudential, we will treat your disability as part of your prior claim and you will not have to complete another elimination period if: you were continuously insured under this plan for the period between your prior claim and your current disability; and your recurrent disability occurs within 6 months of the end of your prior claim. Your recurrent disability will be subject to the same terms of the plan as your prior claim. Any disability which occurs after 6 months from the date your prior claim ended will be treated as a new claim. The new claim will be subject to all of the plan provisions. If you become covered under any other group long term disability plan, you will not be eligible for payments under the Prudential plan. Recurrent disability means a disability which is: caused by a worsening in your condition; and due to the same cause(s) as your prior disability for which Prudential made a Long Term Disability payment. Case 2:16-cv-05763-MMB Document 4-2 Filed 02/09/17 Page 26 of 36 83500 COTS-LTD-1009 (50662-13) 23 Long Term Disability Coverage OTHER SERVICES How Can Prudential Help Your Employer Identify and Provide Worksite Modification? A worksite modification might be what is needed to allow you to perform the material and substantial duties of your regular occupation with your Employer. One of our designated professionals will assist you and your Employer to identify a modification we agree is likely to help you remain at work or return to work. This agreement will be in writing and must be signed by you, your Employer and Prudential. When this occurs, Prudential will reimburse your Employer for the cost of the modification up to the greater of: $1000; or the equivalent of two months of your gross disability payment. This benefit is available to you on a one time only basis. How Can Prudential’s Social Security Claimant Assistance Program Help You With Obtaining Social Security Disability Benefits? Prudential can arrange for expert advice regarding your Social Security disability benefits claim and assist you with your application or appeal, if you are disabled under the plan. Receiving Social Security disability benefits may enable: you to receive Medicare after 24 months of disability payments; you to protect your retirement benefits; and your family to be eligible for Social Security benefits. We can assist you in obtaining Social Security disability benefits by: helping you find appropriate legal representation; obtaining medical and vocational evidence; and reimbursing pre-approved case management expenses. Case 2:16-cv-05763-MMB Document 4-2 Filed 02/09/17 Page 27 of 36 83500 CRS-LTD-1001 (50662-13) 24 Long Term Disability Coverage REHABILITATION SERVICES How Can Prudential’s Rehabilitation Program Help You Return to Work? Prudential has a rehabilitation program available. As your file is reviewed, medical and vocational information will be analyzed to determine if rehabilitation services might help you return to work. Once the initial review is completed by our rehabilitation program specialists working along with your doctor and other appropriate specialists, Prudential may elect to offer you and pay for a rehabilitation program. If the rehabilitation program is not developed by Prudential’s rehabilitation program specialists, you must receive written approval from Prudential for the program before it begins. The rehabilitation program may include, but is not limited to, the following services: coordination with your Employer to assist you to return to work; evaluation of adaptive equipment to allow you to work; vocational evaluation to determine how your disability may impact your employment options; job placement services; resume preparation; job seeking skills training; retraining for a new occupation; or assistance with relocation that may be part of an approved rehabilitation program. If at any time, you decline to take part in or cooperate in a rehabilitation evaluation/assessment or program that Prudential feels is appropriate for your disability and that has been approved by your Doctor, we will cease paying your monthly benefit. Rehabilitation program means a program designed to assist you to return to work. Case 2:16-cv-05763-MMB Document 4-2 Filed 02/09/17 Page 28 of 36 83500 CCLM-1002 (50662-13) 25 Long Term Disability Coverage CLAIM INFORMATION When Do You Notify Prudential of a Claim? We encourage you to notify us of your claim as soon as possible, so that a claim decision can be made in a timely manner. Written notice of a claim should be sent within 30 days after the date your disability begins. However, you must send Prudential written proof of your claim no later than 90 days after your elimination period ends. If it is not possible to give proof within 90 days, it must be given no later than 1 year after the time proof is otherwise required except in the absence of legal capacity. The claim form is available from your Employer, or you can request a claim form from us. If you do not receive the form from Prudential within 15 days of your request, send Prudential written proof of claim without waiting for the form. You must notify us immediately when you return to work in any capacity. How Do You File a Claim? You and your Employer must fill out your own section of the claim form and then give it to your attending doctor. Your doctor should fill out his or her section of the form and send it directly to Prudential. What Information Is Needed as Proof of Your Claim? Your proof of claim, provided at your expense, must show: That you are under the regular care of a doctor. Appropriate documentation of your monthly earnings. Appropriate documentation that you are not working at any job during the elimination period for your Long Term Disability claim. The date your disability began. Appropriate documentation of the disabling disorder. The extent of your disability, including restrictions and limitations preventing you from performing your regular occupation or any gainful occupation. The name and address of any hospital or institution where you received treatment, including all attending doctors. The name and address of any doctor you have seen. Case 2:16-cv-05763-MMB Document 4-2 Filed 02/09/17 Page 29 of 36 83500 CCLM-1002 (50662-13) 26 For your Long Term Disability claim, we may request that you send proof of continuing disability, satisfactory to Prudential, indicating that you are under the regular care of a doctor. In some cases, you will be required to give Prudential authorization to obtain additional medical information, and to provide non-medical information (e.g., copies of your IRS federal income tax return, W-2’s and 1099’s) as part of your proof of claim, or proof of continuing disability. This proof, provided at your expense, must be received within 30 days of a request by us. Prudential will deny your claim or stop sending you payments if the appropriate information is not submitted. Regular care means: you personally visit a doctor as frequently as is medically required, according to generally accepted medical standards, to effectively manage and treat your disabling condition(s); and you are receiving the most appropriate treatment and care, which conforms with generally accepted medical standards, for your disabling condition(s) by a doctor whose specialty or experience is the most appropriate for your disabling condition(s), according to generally accepted medical standards. Doctor means a person who is performing tasks that are within the limits of his or her medical license; and is licensed to practice medicine and prescribe and administer drugs or to perform surgery; or has a doctoral degree in Psychology (Ph.D. or Psy.D.) whose primary practice is treating patients; or is a legally qualified medical practitioner according to the laws and regulations of the governing jurisdiction. Prudential will not recognize any relative including, but not limited to, you, your spouse, or a child, brother, sister, or parent of you or your spouse as a doctor for a claim that you send to us. Hospital or institution means an accredited facility licensed to provide care and treatment for the condition causing your disability. Who Will Prudential Make Payments To? Prudential will make payments to you. What Happens If Prudential Overpays Your Claim? Prudential has the right to recover any overpayments due to: fraud; any error Prudential makes in processing a claim; and your receipt of deductible sources of income. Case 2:16-cv-05763-MMB Document 4-2 Filed 02/09/17 Page 30 of 36 83500 CCLM-1002 (50662-13) 27 You must reimburse us in full. We will determine the method by which the repayment is to be made. Prudential will not recover more money than the amount we paid you. What Are the Time Limits for Legal Proceedings? You can start legal action regarding your claim 60 days after proof of claim has been given and up to 3 years from the time proof of claim is required, unless otherwise provided under federal law. How Will Prudential Handle Insurance Fraud? Prudential wants to ensure you and your Employer do not incur additional insurance costs as a result of the undermining effects of insurance fraud. Prudential promises to focus on all means necessary to support fraud detection, investigation and prosecution. In some jurisdictions, if you knowingly and with intent to defraud Prudential, file an application or a statement of claim containing any materially false information or conceal for the purpose of misleading, information concerning any fact material thereto, you commit a fraudulent insurance act, which is a crime and subjects you to criminal and civil penalties. These actions will result in denial or termination of your claim, and, where such laws apply, are subject to prosecution and punishment to the full extent under any applicable law. Prudential will pursue all appropriate legal remedies in the event of insurance fraud. Case 2:16-cv-05763-MMB Document 4-2 Filed 02/09/17 Page 31 of 36 Claims and Appeals (50662-13) The Claims and Appeals section is not part of the Group Insurance Certificate. Case 2:16-cv-05763-MMB Document 4-2 Filed 02/09/17 Page 32 of 36 Claims and Appeals (50662-13) CLAIMS AND APPEALS Plan Benefits Provided by The Prudential Insurance Company of America 751 Broad Street Newark, New Jersey 07102 This Group Contract underwritten by The Prudential Insurance Company of America provides insured benefits. For all purposes of this Group Contract, the Employer/Policyholder acts on its own behalf or as an agent of its employees. Under no circumstances will the Employer/Policyholder be deemed the agent of The Prudential Insurance Company of America, absent a written authorization of such status executed between the Employer/Policyholder and The Prudential Insurance Company of America. Nothing in these documents shall, of themselves, be deemed to be such written execution. Claim Procedures 1. Determination of Benefits Prudential shall notify you of the claim determination within 45 days of the receipt of your claim. This period may be extended by 30 days if such an extension is necessary due to matters beyond the control of the plan. A written notice of the extension, the reason for the extension and the date by which the plan expects to decide your claim, shall be furnished to you within the initial 45-day period. This period may be extended for an additional 30 days beyond the original 30-day extension if necessary due to matters beyond the control of the plan. A written notice of the additional extension, the reason for the additional extension and the date by which the plan expects to decide on your claim, shall be furnished to you within the first 30-day extension period if an additional extension of time is needed. However, if a period of time is extended due to your failure to submit information necessary to decide the claim, the period for making the benefit determination by Prudential will be tolled (i.e., suspended) from the date on which the notification of the extension is sent to you until the date on which you respond to the request for additional information. If your claim for benefits is denied, in whole or in part, you or your authorized representative will receive a written notice from Prudential of your denial. The notice will be written in a manner calculated to be understood by you and shall include: (a) the specific reason(s) for the denial, (b) references to the specific plan provisions on which the benefit determination was based, (c) a description of any additional material or information necessary for you to perfect a claim and an explanation of why such information is necessary, (d) a description of Prudential’s appeals procedures and applicable time limits, and (e) if an adverse benefit determination is based on a medical necessity or experimental treatment or similar exclusion or limit, an explanation of the scientific or clinical judgment for the determination will be provided free of charge upon request. Case 2:16-cv-05763-MMB Document 4-2 Filed 02/09/17 Page 33 of 36 Claims and Appeals (50662-13) 2. Appeals of Adverse Determination If your claim for benefits is denied or if you do not receive a response to your claim within the appropriate time frame (in which case the claim for benefits is deemed to have been denied), you or your representative may appeal your denied claim in writing to Prudential within 180 days of the receipt of the written notice of denial or 180 days from the date such claim is deemed denied. You may submit with your appeal any written comments, documents, records and any other information relating to your claim. Upon your request, you will also have access to, and the right to obtain copies of, all documents, records and information relevant to your claim free of charge. A full review of the information in the claim file and any new information submitted to support the appeal will be conducted by Prudential, utilizing individuals not involved in the initial benefit determination. This review will not afford any deference to the initial benefit determination. Prudential shall make a determination on your claim appeal within 45 days of the receipt of your appeal request. This period may be extended by up to an additional 45 days if Prudential determines that special circumstances require an extension of time. A written notice of the extension, the reason for the extension and the date that Prudential expects to render a decision shall be furnished to you within the initial 45-day period. However, if the period of time is extended due to your failure to submit information necessary to decide the appeal, the period for making the benefit determination will be tolled (i.e., suspended) from the date on which the notification of the extension is sent to you until the date on which you respond to the request for additional information. If the claim on appeal is denied in whole or in part, you will receive a written notification from Prudential of the denial. The notice will be written in a manner calculated to be understood by the applicant and shall include: (a) the specific reason(s) for the adverse determination, (b) references to the specific plan provisions on which the determination was based, (c) a statement that you are entitled to receive upon request and free of charge reasonable access to, and make copies of, all records, documents and other information relevant to your benefit claim upon request, (d) a description of Prudential’s review procedures and applicable time limits, (e) a statement that you have the right to obtain upon request and free of charge, a copy of internal rules or guidelines relied upon in making this determination, and (f) a statement describing any appeals procedures offered by the plan. If a decision on appeal is not furnished to you within the time frames mentioned above, the claim shall be deemed denied on appeal. If the appeal of your benefit claim is denied or if you do not receive a response to your appeal within the appropriate time frame (in which case the appeal is deemed to have been denied), you or your representative may make a second, voluntary appeal of your denial in writing to Prudential within 180 days of the receipt of the written notice of denial or 180 days from the date such claim is deemed denied. You may submit with your second appeal any written comments, documents, records and any other information relating to your claim. Case 2:16-cv-05763-MMB Document 4-2 Filed 02/09/17 Page 34 of 36 Claims and Appeals (50662-13) Upon your request, you will also have access to, and the right to obtain copies of, all documents, records and information relevant to your claim free of charge. Prudential shall make a determination on your second claim appeal within 45 days of the receipt of your appeal request. This period may be extended by up to an additional 45 days if Prudential determines that special circumstances require an extension of time. A written notice of the extension, the reason for the extension and the date by which Prudential expects to render a decision shall be furnished to you within the initial 45-day period. However, if the period of time is extended due to your failure to submit information necessary to decide the appeal, the period for making the benefit determination will be tolled from the date on which the notification of the extension is sent to you until the date on which you respond to the request for additional information. Your decision to submit a benefit dispute to this voluntary second level of appeal has no effect on your right to any other benefits under this plan. If you elect to initiate a lawsuit without submitting to a second level of appeal, the plan waives any right to assert that you failed to exhaust administrative remedies. If you elect to submit the dispute to the second level of appeal, the plan agrees that any statute of limitations or other defense based on timeliness is tolled during the time that the appeal is pending. If the claim on appeal is denied in whole or in part for a second time, you will receive a written notification from Prudential of the denial. The notice will be written in a manner calculated to be understood by the applicant and shall include the same information that was included in the first adverse determination letter. If a decision on appeal is not furnished to you within the time frames mentioned above, the claim shall be deemed denied on appeal. Case 2:16-cv-05763-MMB Document 4-2 Filed 02/09/17 Page 35 of 36 50662, LTD, All Bargained for employees 26 wk, Ed 4-2012, 13 Case 2:16-cv-05763-MMB Document 4-2 Filed 02/09/17 Page 36 of 36 -= - ..... ~ill ~"' ~· ... ,., ..• ; ' ... .,. .... "'"'""~ ..... ·• ' ,,,. ::.'·: ' .. ,., ~· €f&:i U!;;:::;. MAR-25-2016 15:49 '' M7 Social Securicy Administration Retirement, Survivors, and Disability Insurance Notice of Award office of Central Operations l'SOO Woodla\\.>n !>rive -· Saltimorei r4aryland 21241-1500 Date: March 2~ 2016 . Claim Number: ilillliilil--9652 HA JILL M MULDOON 5498 MALLARD DR B~~SALEM PA 19020-3943 We are writing to let you know ehat you are entitled to monthly disability benefits from Social Security beginning July 2013. Your representative has informed us that a third party is paying your representative's fee. Under our rules, we do not need to authorize your r~presentative's fee when a third partY entity will pay the fee and neither you nor your auxiliary beneficiaries, if any are liable for paying any fees or expenses. Your Benefits ~ 0c·· The following chart shows your benefit amount(s) before any ded.u~ti.on$ or rounding. ':the amount you actually receive may Oi£fer £rom your full benefit amount. When we figure how much to pay you, we mUst 4educt cereain amounts, such as Medicare premiums and worker's compensation offset. We must .~lso ro~nd down to the nearest dollar. Beginning Date July 2013 $ Benefit Amount 2,1Sl,70 Reason ,, Entitlement began December 2013 January :2014 December 2014 $ $ $ 2,214.40 2,220.50 2,259,20 Cost of living adjustment Creait for additional.earnin9~ Cost of living adjustment What We Will Pay • Your first payment is for $71,408.80. , , • This is the money you are due through March 201~.- • After that, you will receive $2,136.00 on or abo~t the second Wednesday of each month. SEE NEXT PAGE '· :: P.002/006 I I < I Case 2:16-cv-05763-MMB Document 4-3 Filed 02/09/17 Page 1 of 5 '. ' ;;,·'-r;: MAR-25-2016 15:49 ?.003/006 )"H''·'- .-·: •· "" :.~f -'.!~ ,, ;.:..:.,.., ~-~ o., . . ...... .. ., .. -, .. ,,.;; . ~~;T{.: '·'" .... o; .• ·' '"• ~;~ l : .. : ~"-.. ·•· ~)j;·.j >- ".i i '' ... _' ..,, ... .. ~.~· :=-.... ' o·.·'. ':;.~ . ., ' .. "' ,j,. ,.~, :r;: "'" report. Be sure to read the parts of the pamphlet which h: explain what to do if you go to work or if your health improves. Things To Remember The doctors and other trained personnel who decided that yoU are disabled expect your health to improve. Therefore, we will review your case in February 2018. We will send you1a letter before we start the revi~~. Based on that review, your benefits will contirtue if you are: still disabled, but t-rill end if you are no longer disabled, Do You Think We Are Wrong? If you do not agree with this decision, you have the; right p&~: appeal. We will review your case and look at any new facts ~u have. A person who did not make the fi:t:ISt de<::ision.'!fill•·f:iecida your case. We will review the parts of the decisionjtha~ you think are wrong and correct any mistakes~ We may alSo ~~o/i~W 't-he parts of cur decision that you think are right .. , We will .. make a decision that may or may not be in your favo~ .· S!S NSXT PAGE -' , . .... , . . - ' ' '· ., ·. Case 2:16-cv-05763-MMB Document 4-3 Filed 02/09/17 Page 3 of 5 MAR-25-2016 15:49 P.005/006 --9652 HA Page 4 • You have 60 days to ask for &n appeal. • The 60 days start the day after you receive this let:;·er_;.;· We assume you re~eived. this letter 5 days after the d;ite·-on it ~nless you show us that you did not rece~ve it wiihin the 5-day period. • YOu must have a good reason if you wait more than 60 days to ask for an appeal. • You can file an appeal with any Soeial Security office.· You must ask for an appea~ in writing. Please use our "Request for Reeonsiderat:.i.on'' form, SSA-S5l-U2. You may go to our website at www.socialsecurity.gov/online/ to find the form. You can also call, write, or visit us to request the form. If you need help to fill out the form, we can help you by phone or in person* If Y.jt.'~~ 'four local social Security office has a list of groups that .~<:::an help you. with your appeal. If you -get someone to help you, you should let us know, If you hire someone, we must approve the fee before he or she c:an collec~ it. ~~d if you hire a representative who is eligi~le for direct pay, we will witr.~ltol
