Kevin McCann v. Unum Provident

PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

___________

No. 16-2014

___________

KEVIN M. MCCANN, M.D.,

Appellant

v.

UNUM PROVIDENT; *HARTFORD LIFE &

ACCIDENT INSURANCE COMPANY

*(Dismissed Per Court Order dated October 12, 2017)

_______________________

On Appeal from the United States District Court

for the District of New Jersey

(D.C. Civil Action No. 3-11-cv-03241)

District Judge: Honorable Mary L. Cooper

______________

ARGUED: April 26, 2018

Before: JORDAN, BIBAS, and SCIRICA, Circuit Judges.

(Opinion Filed: October 5, 2018)

Tybe A. Brett [ARGUED]

Feinstein Doyle Payne & Kravec

429 Fourth Avenue

Law & Finance Building, Suite 1300

Pittsburgh, PA 15219

Michael E. Quiat

Uscher, Quiat, Uscher & Russo

433 Hackensack Avenue

2nd Floor

Hackensack, NJ 07601

Counsel for Appellant

Steven P. Del Mauro [ARGUED]

Janet Nagotko

McElroy Deutsch Mulvaney & Carpenter

570 Broad Street

Suite 1500

Newark, NJ 07102

Counsel for Appellee

_________________

OPINION OF THE COURT

_________________

SCIRICA, Circuit Judge.

This appeal addresses two principal issues: First,

whether a group insurance plan is governed by the Employee

2

Retirement Income Security Act of 1974 (ERISA), 29 U.S.C.

§§ 1001, et seq., and second, whether the physician–claimant

was incorrectly denied his disability benefit payments.

Plaintiff–appellant, Dr. Kevin McCann, is a radiologist

certified in the specialty of interventional radiology. The

gravamen of this appeal concerns a supplemental long-term

disability insurance policy Dr. McCann purchased from

defendant, Provident Life and Accident Insurance Company.

After initially issuing payments under the policy, Provident

terminated Dr. McCann’s disability benefits. Central to its

decision was a determination that Dr. McCann was primarily

practicing as a diagnostic radiologist—rather than as an

interventional radiologist—at the time he became disabled.

This suit followed.

As a preliminary matter, the parties dispute whether Dr.

McCann’s claim arises under ERISA. Thus, we first consider

the outer bounds of an employer’s involvement in a group or

group-type insurance plan before deciding whether the plan

may be governed by ERISA. The Department of Labor has

promulgated a safe harbor regulation exempting certain plans

from the definition of an “employee welfare benefit plan.” But

we conclude Dr. McCann’s then-employer sufficiently

endorsed the plan under which his policy was purchased to

render the safe harbor inapplicable. ERISA will supply the

governing framework.

As to the merits, we believe Provident incorrectly

defined Dr. McCann’s occupation in administering his

disability claim and that the claim must be evaluated in the

context of his specialty—interventional radiology. We will

remand for the District Court to consider whether Dr.

3

McCann’s medical conditions prevent him from being able to

perform his “substantial and material duties” as an

interventional radiologist, as required by the terms of the

policy.

I. Factual Background

A. Dr. McCann’s Employment at Henry Ford

Hospital and Supplemental Long-Term

Disability Insurance Policy

After graduating from medical school and obtaining

certification as an interventional radiologist, Dr. McCann was

hired by Henry Ford Hospital to serve in a two-year Graduate

Trainee Physician Program. While there, Dr. McCann worked

in the Hospital’s Department of Diagnostic Radiology until the

completion of his fellowship on June 30, 1991.

To Dr. McCann and other employees, the Hospital

offered a “Base Plan” of non-contributory long-term disability

benefits. The Hospital determined the Base Plan’s eligibility

criteria and set the available maximum monthly benefit. As

relevant here, the Hospital also provided certain groups of

employees with information pertaining to supplemental long-

term disability insurance. Fellows, like Dr. McCann, who

served in the Hospital’s Graduate Trainee Physician Program

were eligible to purchase supplemental insurance under the

Residents’ Supplemental Disability Insurance Plan (RSDP).

The RSDP was funded through the purchase of individual

policies and underwritten by Provident’s predecessor, Unum

Life Insurance Company of America. While participants paid

100% of policy premiums, all policyholders received a fifteen

4

percent discount based solely on their association with the

Hospital.

During Dr. McCann’s employment, Lucasse, Ellis, Inc.

(“Lucasse”) served as the Hospital’s broker for insurance

policies issued under the Base Plan and RSDP. Lucasse sent

Dr. McCann a letter advertising the RSDP in 1991 and

informing him that Provident had been chosen by the Hospital

“to provide supplemental disability insurance to Ford

physicians.” Joint App. at 166. The letter explained that the

RSDP was designed to address the “single greatest concern”

for physicians—that they may be disabled within their

specialty. Joint App. at 168. Specifically, Lucasse’s letter

stated: “Unlike many occupations, a doctor may become

disabled by an injury or illness that would not preclude

working in another occupation,” and that “[y]our program will

state . . . that your occupation is a recognized medical specialty,

with its own specific duties. Thus, it is possible for you to be

disabled within your specialty while you can still be a

physician.” Id.

Thereafter, Dr. McCann spoke with a Lucasse

brokerage agent, David Manes. After discussing with Manes a

long-term disability insurance policy he had purchased earlier

from a different insurer, Dr. McCann applied to Provident for

supplemental insurance coverage in May 1991. Dr. McCann’s

application was approved and his policy took effect on July 1,

1991.1 Particularly relevant are the provisions relating to total

disability, which state:

1

At the time he became disabled, Dr. McCann’s policy

provided a monthly benefit of $15,000.00.

5

Total Disability or totally disabled

means that due to Injuries or

Sickness:

1. [Y]ou are not able to perform

the substantial and material

duties of your occupation; and

2. [Y]ou are receiving care by a

Physician which is appropriate

for the condition causing the

disability. We will waive this

requirement when continued

care would be of no benefit to

you.

Joint App. at 308. The policy also provides the following

definition of occupation:

[Y]our occupation means the

occupation (or occupations, if

more than one) in which you are

regularly engaged at the time you

become disabled. If your

occupation is limited to a

recognized specialty within the

scope of your degree or license, we

will deem your specialty to be your

occupation.

Id.

6

B. Dr. McCann’s Medical Diagnoses

Nearly fifteen years after completing his fellowship at

Henry Ford Hospital, Dr. McCann began employment at

Holzer Clinic in Gallipolis, Ohio. While at Holzer, between

2006 and 2010, Dr. McCann consulted a variety of medical

providers for the evaluation and treatment of obstructive sleep

apnea (OSA)2, a mildly dilated ascending aortic root

aneurysm,3 hypertension, and obesity. These conditions form

the basis of Dr. McCann’s Total Disability claim.

First, in December 2006, Dr. Howard Linder diagnosed

Dr. McCann with OSA. The condition caused Dr. McCann to

experience “excessive daytime sleepiness,” and Dr. Linder

opined that he was “probably unable to stay alert for long

periods” at work. Joint App. at 1328–29. Dr. McCann

underwent a sleep study later that month to evaluate the

severity of his OSA and, based upon the results of the study,

Dr. Linder developed a treatment plan. The plan included using

a continuous positive airway pressure (CPAP) machine at night

to assist with breathing during sleep.

Shortly thereafter, Dr. McCann also began experiencing

shortness of breath and dizziness. On April 16, 2007, an

echocardiogram revealed his “aortic root mildly dilated at 3.71

2

OSA “is a condition in which the flow of air pauses or

significantly decreases during breathing while the individual is

asleep due to a narrowing or blockage of the airway.” Joint

App. at 4054. As a result, OSA can cause interruptions in

breathing patterns and excessive fatigue.

3

“An aneurysm consists of an abnormal enlargement of a

weakened area in the aortic wall.” Joint App. at 4057. The aorta

supplies blood pumped by the heart to the rest of the body.

7

[cm].” Joint App. at 2174. Several months later, Dr. McCann

visited a specialist, Dr. Joseph Coselli, Chair of Cardiothoracic

Surgery at the Texas Heart Institute at Baylor Medical Center,

and was diagnosed with a mildly dilated aortic root aneurysm,

hypertension, and obesity.

Following his diagnoses, Dr. McCann stopped working

at Holzer and sent Provident a notice of claim for benefit

payments in March 2008.4 In support of the claim, Dr. Coselli

submitted an Attending Physician Statement (APS) listing

“restrictions” as “no lifting that ilicits [sic] Valsalva maneuver5

otherwise no restrictions” and “limitations” as “avoid heavy

lifting [and] avoid stress to help keep BP under control to

prevent further dilation of aorta.” Joint App. at 810.6 Dr.

Coselli also wrote a letter to Holzer Clinic in April, in which

he noted Dr. McCann’s hypertension and sleep apnea put him

“into a high risk population for risk of further dilation of his

aorta” and recommended “tight blood pressure control, weight

loss and undertaking an exercise regime in order to improve

[Dr. McCann’s] overall functional capacity.” Joint App. at

1176. Dr. Coselli further stated that “[i]n light of these

restrictions, I feel it would be best if he was classified as fully

disabled permanently, effective March 10, 2008.” Id.

4

Prior to ceasing work completely, Dr. McCann reduced his

workload on two occasions because of OSA-related fatigue.

5 A Valsalva maneuver is a breathing technique that requires a

forceful attempted exhalation against a closed airway.

6

Dr. Linder also submitted an APS to Provident on July 15,

2008, listing Dr. McCann’s diagnoses as “obstructive sleep

apnea causing daytime sleepiness” and “excessive daytime

sleepiness despite CPAP.” Joint App. at 1328.

8

C. Provident’s Initial Payment of Benefits

Provident acknowledged Dr. McCann’s disability claim

on April 4, 2008, and informed him that medical and financial

information would be requested and reviewed to process the

claim. Provident also interviewed Dr. McCann, both in person

and via telephone, on numerous occasions. These interviews

discussed Dr. McCann’s educational and employment

background, his medical conditions, and the impact of the

medical conditions on his medical practice.

Regarding Dr. McCann’s occupational duties,

Provident requested information from Holzer. Dr. Phillip

Long, Vice-Chairman of Radiology, completed a job

description form estimating that Dr. McCann worked an

average of 60 hours per week divided among interventional

radiology (approximately 20 hours), diagnostic radiology

(approximately 28 hours), fluoroscopy7 (approximately 1

hour), night call (approximately 10 hours), and paperwork

(approximately 1–2 hours).

In addition, Provident requested the Current Procedural

Terminology (CPT) codes8 related to Dr. McCann’s practice.

Upon receipt of the codes, Provident employed a vocational

7

Described as “[p]erform[ing] barium studies under

fluoroscopy in standing position wearing lead apron.” Joint

App. at 1014.

8

CPT codes are five-digit, procedure-specific codes

maintained by the American Medical Association used for

reporting medical services and surgical procedures to third-

party payers.

9

rehabilitation specialist to verify the duties of Dr. McCann’s

occupation as an interventional radiologist. To this end, David

Gaughan submitted a report on November 13, 2008. Gaughan

confirmed that Dr. Long’s job description, in combination with

the CPT codes, were sufficient to conclude Dr. McCann

performed duties related to “Diagnostic & Interventional

Radiology prior to disability.” Joint App. at 1514.

Regarding Dr. McCann’s medical conditions, Provident

submitted Dr. McCann’s file to Dr. Joseph Davids, a board-

certified physician in internal medicine and cardiovascular

diseases. Dr. Davids reviewed Dr. Coselli’s and Dr. Linder’s

letters and notes as of July 2008 and concluded that “the

prognosis for functional improvement is poor because it is

difficult to maintain [a] level of tight BP [blood pressure]

control while working in a stressful occupation, such as

interventional radiology. Furthermore, an interventional

radiologist will often perform Valsalva maneuvers during a

procedure, which will lead to a rise in BP.” Joint App. at 1455.

Dr. Davids also opined that evidence of good blood pressure

control might alleviate Dr. McCann’s restrictions and

limitations.

Following this medical review and analysis of Dr.

McCann’s financial and occupational information, Provident

approved Dr. McCann for Total Disability payments on

September 4, 2008.9 Provident initially issued payments with a

Reservation of Rights, but this reservation was later

withdrawn.

9

Provident also paid Residual Disability benefits to Dr.

McCann from April 1, 2007 to March 10, 2008, during which

time Dr. McCann was working reduced hours.

10

D. Provident Reviews its Determination

Provident reexamined Dr. McCann’s Total Disability

status in the summer of 2009. In May, a medical consulting

team consisting of Dr. Davids and a clinical consultant, Patricia

Carroll, reviewed the medical records in Dr. McCann’s file.

Davids and Carroll recommended a 24-hour blood pressure

study, which was scheduled for July 9, 2009. The results of this

study were forwarded to another clinical representative and Dr.

Alfred Parisi, who concluded:

[T]he systolic BP shows good but

not ideal BP control . . . The

[insured’s] occupation as an

interventionalist would involve

some pushing requirements when

putting in a catheter and he would

have some potential problems

doing this. The act of pushing does

tend to increase BP. The [insured]

might also have increased stress

during a difficult procedure. If the

[insured] is an interventional

radiologist it is reasonable that he

would not be able to perform some

of the interventional activities. If

the [insured] does not perform

much interventional radiology

work, he should be able to perform

many of the sedentary

[occupational] requirements.

Joint App. at 2043.

11

Based on Dr. Parisi’s conclusions, Provident

representatives recommended scheduling another field

interview and obtaining updated medical records. This

included the records of Dr. Nabil Fahmy, Dr. McCann’s

primary care physician. Dr. Fahmy’s notes from Dr. McCann’s

most recent visit in July stated that he was “generally doing

okay with no new problems,” that his “[h]ypertension [was]

doing well, BP [was] under good control at home,” and that Dr.

McCann was “[n]on compliant with diet and exercise

schedule,” but taking “medications daily as recommended.”

Joint App. at 2204.

Provident also reviewed the treatment notes from Dr.

McCann’s follow-up visit with Dr. Coselli on August 10, 2009.

Katharine Loring, a nurse practitioner, noted that in response

to Dr. McCann’s request that Dr. Coselli’s office continue

supporting his disability claims, she “discuss[ed] with him that

his aorta is really not a size we would recommend he need

disability and that many people with much larger aortas

continue to work.” Joint App. at 2435. She accordingly

suggested Dr. McCann “do just regular radiology as a way to

continue to work but with less stress.” Id.

Dr. Coselli’s notes similarly observed:

We discussed the terminology of

permanent and total disability and

we agreed to disagree regarding

the sequencing of events. The fact

remains that over the past two

years following him, his aorta has

been essentially stable. Surgery is

not indicated at this time – the size

12

does not dictate intervention and

although there is a 30% chance that

he will need surgery, it may not be

for 5, 10 or 20 years.

Joint App. at 2434. This discussion was memorialized in a

follow-up letter to Dr. McCann dated September 9, 2009, in

which Dr. Coselli explained: “your aortic aneurysm has had

only minimal increase in size since the January 2008 study,

increasing from 4.0 cm to the current 4.3 cm,” but that “[a]s in

the original letters to Holzer Clinic, your disability

classification remains unchanged.” Joint App. at 2433. Dr.

Coselli also informed Dr. McCann that while he was “happy to

monitor [his] aorta studies, [his office was] not a medical

practice, but surgical,” id., and that Dr. McCann should consult

his primary care physician to coordinate his care.

To this end, Dr. McCann chose Dr. David Lombardi, a

board-certified internist, as his local primary care physician.

Following an appointment in October 2009, Dr. Lombardi

submitted an APS to Provident supporting Dr. McCann’s

disability claim and identifying his primary diagnosis as

“thoracic ascending aortic aneurysm” and his secondary

diagnosis as OSA. Regarding job-related restrictions and

limitations, Dr. Lombardi concluded Dr. McCann could not

complete “work of any kind due to [his] cardiac condition.”

Joint App. at 2389.

Around this time, Provident again reviewed Dr.

McCann’s CPT codes for procedures performed from 2005 to

2008. Vocational analyst Christina Lubin compared the

percentage of interventional procedures performed to the

percentage of diagnostic procedures. Using this data, another

13

vocational analyst concluded that “interventional charges

accounted for 11% – 18% of total charges” and

“[i]nterventional units accounted for 6% – 11% of total units.”

Joint App. at 2341. Based on this information, Lubin

concluded Dr. McCann “reasonably spent the majority of his

time reading films and dictating interpretive reports.

Interventional procedures appear to have been performed on an

occasional basis.” Joint App. 2579.

Provident also assembled a second medical review team

to review Dr. McCann’s medical files. The team included a

clinical representative, Beth O’Brien, and Dr. Parisi. After

reviewing all of the files, O’Brien observed that Dr. McCann’s

aortic aneurysm was stable and that Dr. Coselli was no longer

supporting restrictions and limitations from his condition. Dr.

Parisi also reviewed Dr. McCann’s file and concluded that Dr.

McCann should avoid lifting heavy objects (> 50 lbs.), restrict

his work hours to 50 hours per week, and not work night call

or night shift hours. This assessment was based on his finding

that Dr. McCann’s “thoracic aneurysm was not large and

relatively stable, that his hypertension was reasonably

controlled on medication and he was doing well with his CPAP

treatment for sleep apnea.” Joint App. at 2564.

In addition to reviewing Dr. McCann’s files, Dr. Parisi

contacted Dr. Lombardi to “obtain clarification of . . . Dr.

McCann’s functional capacity.” Id. Dr. Lombardi responded

via letter stating:

I have reviewed the most recent

letter from Dr. Coselli’s office

dated September 2009 and prior

letters. I have included them for

14

your review. In these letters, Dr.

Coselli, the cardiothoracic

surgeon, states that Dr. McCann is

fully and permanently disabled

due to his condition. He indicates

that the aneurysm has increased in

size since a prior study. I now

oversee Dr. McCann’s general

medical care. Given the

documentation and

recommendations of the

cardiothoracic surgeon, I,

therefore, agree and support Dr.

McCann’s ongoing disability

application.

Joint App. at 2596.

Nevertheless, Dr. Parisi maintained his conclusion. He

noted “[Dr. McCann’s] hypertension is adequately controlled

as evidenced by the 24 hour ambulatory blood pressure study,”

and that the “[m]ost recent information indicates his sleep

apnea is well controlled,”10 and he again suggested the

limitations described above. Joint App. at 2607.

10

Around this time, Provident requested Dr. McCann’s

medical records from Dr. Linder going back to March 1, 2009.

Dr. Linder provided the records, which were reviewed by a

Provident-employed physician, Dr. Alfred Kaplan. The records

included the results of a March 2009 sleep study. Based on this

study, Dr. Kaplan concluded that Dr. McCann “was tolerating

the CPAP well and was not symptomatic from the sleep

15

In light of this disagreement, Provident forwarded Dr.

McCann’s claim file to Dr. Costas Lambrew, a designated

medical officer, for an independent medical review on

December 22, 2009. Dr. Lambrew’s review also concluded Dr.

McCann was capable of performing a modified work schedule.

This assessment was based on the fact that Dr. McCann’s aorta

was asymptomatic and stable, Dr. Coselli’s most recent

treatment notes, and that Dr. McCann’s “hypertension has been

controlled, as reflected by his recorded home pressures and the

[24-hour blood pressure study].” Joint App. at 2619. He further

concluded Dr. McCann could perform “[s]ustained, full time

light work as a non-interventional Radiologist, with a

restriction of no heavy lifting, and reduction of . . . perceived

stress by working no more than 50 hours.” Id.

E. Provident Terminates Dr. McCann’s Benefit

Payments

After the extensive communications with Dr. McCann

and various medical professionals, noted above, Provident

terminated benefit payments in December 2009. In its letter to

Dr. McCann, Provident supported its decision by pointing to,

among other things: the records from Dr. Coselli in connection

with Dr. McCann’s August 10, 2009 visit; recent sleep studies

from Dr. Linder reporting that Dr. McCann was tolerating the

CPAP machine well; its medical reviews; and the review of Dr.

McCann’s CPT codes.

Based on this information, Provident concluded Dr.

McCann was “able to perform the duties of [his] occupation,

apnea[.] Consequently he was not experiencing impairing

daytime somnolence.” Joint App. at 2559.

16

maintain a regular work schedule of up to 50 hours per week

with no night hours or night call” and therefore was “not

Totally Disabled in accordance with the Policy provisions.”

Joint App. at 125. Provident noted its vocational consultant

“concluded that the majority of [Dr. McCann’s] practice was

diagnostic radiology which involves sitting at a computer to

read films.” Id. Further, the letter stated Dr. McCann was not

eligible for residual disability11 because, “[a]lthough [he]

11

Dr. McCann’s policy defines residual disability as follows:

Residual Disability or residually

disabled, during the Elimination

Period, means that due to Injuries

or Sickness:

1. [Y]ou are not able to do one or

more of your substantial and

material daily business duties

or you are not able to do your

usual daily business duties for

as much time as it would

normally take you to do them;

2. [Y]ou have a Loss of Monthly

Income in your occupation of

at least 20%; and

3. [Y]ou are receiving care by a

Physician which is appropriate

for the condition causing

disability. We will waive this

requirement when continued

care would be of no benefit to

you.

17

indicated that [he] previously worked 60 hours per week, [his]

ability to work 50 hours per week would not be expected to

cause a reduction of [his] monthly income of more than 20%.”

Joint App. at 126.

F. Dr. McCann’s Appeal

Dr. McCann appealed Provident’s decision and,

following the termination of his benefits, visited one new

consulting physician: Dr. Chandra Madala, a board-certified

cardiologist. Dr. Madala addressed a letter to Dr. McCann on

June 14, 2010, stating his agreement with “Dr. Coselli’s letter

to Holzer . . . . that [Dr. McCann was] fully and permanently

disabled.” Joint App. at 2841. Dr. Madala recommended

continued medical management of Dr. McCann’s condition

with blood pressure control and lifestyle modification and

noted that “[o]f particular importance is to avoid stress.” Id. At

Dr. McCann’s request, Dr. Linder also drafted a letter in June,

stating that Dr. McCann’s diagnosis of OSA exacerbated “his

hypertension which is a continuing risk factor for possible

rupturing [of] his aneurysm.” Joint App. at 2836. Dr. Linder

further stated that “[t]reatment with CPAP certainly helps but

does not eliminate the risk factor of contributing to [Dr.

McCann’s] hypertension.” Id.

Provident continued to review Dr. McCann’s file in

connection with his appeal. On August 3, 2010, Provident met

with Dr. Long to discuss Dr. McCann’s occupational duties.

Dr. Long did not dispute Provident’s CPT code analysis, but

when asked whether Dr. McCann was hired as an

interventional radiologist or a diagnostic radiologist, Dr. Long

Joint App. at 313.

18

replied “[b]oth” and explained that interventional radiologists

do both things. Joint App. at 3148. He noted that nine

radiologists perform diagnostic radiology at Holzer, with work

evenly divided among the practicing radiologists, but that only

three also perform interventional radiology, and that Dr.

McCann would not have been hired by Holzer if he did not

perform some interventional radiology. Dr. Long also

explained that in the same amount of time it can take to do an

interventional procedure, e.g., an angioplasty, he can probably

read more than 10 MRIs. Finally, when asked whether Holzer

would consider hiring Dr. McCann again, Dr. Long stated

Holzer might if Dr. McCann “could work as a diagnostic

radiologist who could also perform on-call work.” Joint App.

at 3151.

Provident also conducted another medical review. In

September, Dr. Paul Sweeney, a board-certified internist with

a subspecialty in cardiology, evaluated Dr. McCann’s file. In

his review, Dr. Sweeney observed “[t]he medical record

clearly documents an asymptomatic mildly dilated ascending

aorta,” but that “aggressive efforts and blood pressure control,

lipid management, and weight reduction” were still

appropriate. Joint App. at 3198. Dr. Sweeney also concluded

from Dr. Coselli’s office records that “there is no longer any

valid rationale” which “would prevent Dr. McCann from

resuming on a full-time basis his previous occupation as an

interventional and diagnostic radiologist.” Id. Specifically, Dr.

Sweeney found “no restrictions on standing, sitting, or

walking. Dr. McCann can occasionally climb and operate

heavy machinery. He can frequently twist and reach above

shoulder level. He can continuously lift up to 10 pounds,

frequently lift 11–20 pounds, and occasionally lift 21–100

pounds.” Joint App. at 3199.

19

G. Provident’s Final Determination

Following Dr. Sweeney’s review, Provident upheld its

decision in a letter to Dr. McCann’s counsel dated September

20, 2010. Again emphasizing review of Dr. McCann’s CPT

codes, and the August 10, 2009 follow-up visit with Dr.

Coselli, Provident explained that “Dr. Coselli released Dr.

McCann to ‘regular radiology’, which is primarily what Dr.

McCann was doing prior to his claim for disability, as

evidenced by the CPT code review.” Joint App. at 152. While

based on Dr. Sweeney’s conclusions, Provident concluded Dr.

McCann could perform both the diagnostic and interventional

components of his occupation, Provident also noted that even

if Dr. McCann could not perform his interventional duties,

because interventional duties accounted for a small part of his

practice, he would not qualify for Residual Disability.

In addition, Provident explained its initial payments of

Total Disability were based on an “incorrect understanding of

[Dr. McCann’s] occupation.” Joint App. at 155. “[D]espite the

fact that Dr. McCann was hired by and listed by Holzer Clinic

as an Interventional Radiologist,” the letter stated, “his CPT

codes clearly reflect that, in the years prior to disability, Dr.

McCann was practicing primarily as a Diagnostic

Radiologist.” Joint App. at 153. Because the restrictions and

limitations described by physicians (i.e., lesser work load and

no night work) “would not prevent Dr. McCann from

performing the substantial and material duties of his

occupation, which were primarily diagnostic in nature,” id.,

Provident maintained its decision to terminate Dr. McCann’s

Total Disability payments.

20

II. Procedural History

Dr. McCann brought suit under ERISA in federal court

seeking payment for all past due benefits and reinstatement of

his monthly Total Disability payments. Despite citing ERISA

as the basis for federal jurisdiction, Dr. McCann contested

ERISA’s applicability before the District Court, arguing the

policy was not part of the RSDP nor a separate employee

welfare benefit plan. Alternatively, Dr. McCann argued a safe

harbor regulation promulgated by the Department of Labor

removed the policy from ERISA’s purview.

Concluding the RSDP was an employee welfare benefit

plan within the meaning of ERISA, and that the safe harbor

criteria were not satisfied, the District Court asserted

jurisdiction under 29 U.S.C. § 1132(e)(1) and 28 U.S.C. §

1331. The District Court further found that ERISA preempted

Dr. McCann’s breach-of-contract claim, but that Dr. McCann’s

claim could reasonably be construed as a claim under ERISA

§ 502(a), 29 U.S.C. § 1132(a), which provides a cause of

action for plan participants who are denied benefits.

The parties subsequently filed cross-motions for

summary judgment as to the merits of Dr. McCann’s claim to

benefits. Reviewing Provident’s denial of benefits de novo, the

District Court found Dr. McCann had failed to meet his burden

of demonstrating Provident’s determination was incorrect. The

court reasoned Provident had not incorrectly administered its

medical review because Dr. McCann failed to provide

objective evidence of job-related restrictions and limitations,

and that Provident’s determination with respect to Dr.

McCann’s occupation was not incorrect. Furthermore, the

court agreed with Provident that any claim for Residual

21

Disability benefits under the policy was untimely because Dr.

McCann did not submit a claim for residual benefits before

Provident’s final determination.

This timely appeal followed.

III. ERISA’s Applicability

As a threshold matter, we address whether Dr.

McCann’s policy is governed by ERISA. This question is not

only one of jurisdiction,12 but also of practical import. “[T]he

substitution of ERISA principles . . . for state-law principles

can make a pronounced difference.” Johnson v. Watts

Regulator Co., 63 F.3d 1129, 1131 (1st Cir. 1995). ERISA

preempts parallel state law remedies—here, the breach-of-

contract claim Dr. McCann has raised against Provident. See,

e.g., Wirth v. Aetna U.S. Healthcare, 469 F.3d 305, 309 (3d

Cir. 2006). But beyond this, ERISA’s applicability also

determines such entitlements as those to a jury trial, see Cox v.

Keystone Carbon Co., 894 F.2d 647, 650 (3d Cir. 1990), and

punitive damages, see Pane v. RCA Corp., 868 F.2d 631, 635

(3d Cir. 1989).

12

Dr. McCann renews his challenge to ERISA’s applicability

on appeal but this challenge does not implicate our subject-

matter jurisdiction. The parties are diverse and the amount in

controversy exceeds $75,000. See 28 U.S.C. § 1332. We

therefore have jurisdiction under 28 U.S.C. § 1291 whether or

not ERISA governs. But if we were to conclude jurisdiction

derives from the parties’ diversity, state substantive law would

govern the interpretation of Dr. McCann’s policy.

22

By its terms, ERISA applies to insurance policies

obtained through (1) a plan, fund, or program (2) that is

established or maintained (3) by an employer (4) for the

purpose of providing benefits (5) to its participants or

beneficiaries. See 29 U.S.C. § 1002(1); Donovan v.

Dillingham, 688 F.2d 1367, 1371 (11th Cir. 1982) (en banc).

This appeal concerns the second requirement that a plan, fund,

or program be “established or maintained” by the employer.13

We must interpret the U.S. Department of Labor’s safe harbor

regulation describing when, and to what extent, an employer

may be involved with an employee welfare benefit plan

without establishing or maintaining it. See 29 U.S.C. § 1135

13

On appeal, Dr. McCann challenges only the District Court’s

determination as to the regulatory safe harbor. “Whether a plan

exists within the meaning of ERISA is a question of fact, to be

answered in light of all the surrounding facts and

circumstances from the point of view of a reasonable person.”

Deibler v. United Food & Commercial Workers’ Local Union

23, 973 F.2d 206, 209 (3d Cir. 1992) (internal quotation marks

and citation omitted). But the interpretation of a regulation also

presents a legal question, thus, this issue presents a mixed

question of law and fact. We review de novo the District

Court’s interpretation of the safe harbor criteria but will reverse

factual findings made in connection with the criteria only if

clearly erroneous. See Johnson, 63 F.3d at 1132 (explaining

that the safe harbor’s applicability “may require factfinding,

and if it does, that factfinding is reviewed only for clear error”);

Thompson v. Am. Home Assur. Co., 95 F.3d 429, 434–5 (6th

Cir. 1996) (describing application of the safe harbor as a

“factual inquiry”); Pacificare Inc. v. Martin, 34 F.3d 834, 837

(9th Cir. 1994) (applying the clearly erroneous standard to

factual findings in this context).

23

(authorizing the Secretary to promulgate interpretive

regulations).

In relevant part, the safe harbor provides that an

“employee welfare benefit plan” or “welfare plan” is not

covered by ERISA when:

(1) No contributions are made

by an employer or employee

organization;

(2) Participation [in] the

program is completely

voluntary for employees or

members;

(3) The sole functions of the

employer or employee

organization with respect to

the program are, without

endorsing the program, to

permit the insurer to

publicize the program to

employees or members, to

collect premiums through

payroll deductions or dues

checkoffs and to remit them

to the insurer; and

(4) The employer or employee

organization receives no

consideration in the form of

cash or otherwise in

connection with the program,

other than reasonable

24

compensation, excluding any

profit, for administrative

services actually rendered in

connection with payroll

deductions or dues

checkoffs.

29 C.F.R. § 2510.3-1(j). All four of the safe harbor’s criteria

must be established for an otherwise qualified plan, fund, or

program to be exempt from ERISA’s coverage, see Menkes v.

Prudential Ins. Co. of Am., 762 F.3d 285, 293 (3d. Cir. 2014),

and that burden rests with the party asserting the exception. But

a program that fails to satisfy any one criterion is not

necessarily “established or maintained” by the employer. See,

e.g., Johnson, 63 F.3d at 1133; Anderson v. UNUM Provident

Corp., 369 F.3d 1257, 1263 n.2 (11th Cir. 2004); Gaylor v.

John Hancock Mut. Life Ins. Co., 112 F.3d 460, 463 (10th Cir.

1997); Hansen v. Continental Ins. Co., 940 F.2d 971, 976 (5th

Cir. 1991), abrogated on other grounds by CIGNA Corp. v.

Amara, 563 U.S. 421 (2011).

In the present appeal, Dr. McCann is the party who

asserts that the safe harbor exempts his policy from ERISA’s

requirements. Thus, he bears the burden of proof that the policy

fulfills the safe harbor’s four criteria. Provident does not

dispute that the RSDP was completely voluntary and that

Henry Ford Hospital received no compensation in connection

with the program, establishing the second and fourth criteria.14

14

Provident asserts, however, our statement in Menkes that “no

authority. . . suggest[s] that . . . closely related components of

an overarching welfare benefit plan ought to be unbundled,”

762 F.3d at 291, is fatal to Dr. McCann’s safe harbor argument.

25

We therefore consider whether Dr. McCann has established the

remaining criteria—whether Henry Ford made “contributions”

to or endorsed the RSDP—but find the question of

endorsement to be the dispositive one.

A. Background

ERISA was enacted “to protect . . . the interests of

participants in employee benefit plans and their beneficiaries.”

29 U.S.C. § 1001; see also Nachman Corp. v. Pension Ben.

Guar. Corp., 446 U.S. 359, 362 (1980) (discussing ERISA’s

enactment and purpose). This goal manifests itself in the

statutory text, including, for example, the fiduciary duties

applicable to the management of both pension and non-pension

benefits. See 29 U.S.C. §§ 1101–1114.

See also Gross v. Sun Life Assur. Co. of Canada, 734 F.3d 1,

10 (1st Cir. 2013) (“[The insured’s] argument that the safe

harbor exception applies depends on her assumption that the

LTD policy may be examined independently from the rest of

Pinnacle’s insurance benefits plan.”). But in Menkes, we

emphasized that “[a]ll of the characteristics of the Basic

Policies and Supplemental Coverage indicate that they are not

two separate sources of coverage, but two parts of one broader

benefits plan,” because all policies were governed by a single

group contract between the company and the insurer and

because all of the information regarding benefit terms, rules,

exclusions, and claim procedures for the policies were the

same and contained in the same documents. 762 F.3d at 291.

Provident points to no facts in the record which would resolve

this factually intensive inquiry and so we will examine the

RSDP independently from Henry Ford Hospital’s Base Plan of

non-contributory benefits, as did the District Court.

26

Mindful of this purpose, the Department of Labor’s safe

harbor regulation “operates on the premise that the absence of

employer involvement vitiates the necessity for ERISA

safeguards.” Johnson, 63 F.3d at 1133. This is clear from the

proposed rule’s preamble, in which the Department of Labor

explains the safe harbor applies where “[t]he involvement of

the employer or employee organization in such programs is so

minimal that the program cannot be said to be ‘established and

maintained by an employer.’” 40 Fed. Reg. 24642, 24643 (June

9, 1975).

As we interpret the Department’s safe harbor, we

recognize that “[t]he basic tenets of statutory construction hold

true for the interpretation of a regulation.” Burns v. Barnhart,

312 F.3d 113, 125 (3d Cir. 2002). Where the language of a

regulation is plain and unambiguous, we need not inquire

further. See id. But this is not such a case and we will,

therefore, consider the ordinary and natural meaning of the

regulatory language within its context and the safe harbor’s

overreaching purpose. In this case, the record is more

developed on the issue of endorsement. Because we find Henry

Ford Hospital’s actions sufficient to fall within the meaning of

endorsement, we leave for another day the meaning of

contribution.

B. Whether Henry Ford Hospital Endorsed the

RSDP

The third criterion for establishing eligibility for the

ERISA safe harbor requires that “[t]he sole functions of the

employer . . . are, without endorsing the program, to permit the

insurer to publicize the program to employees or members

27

[and] to collect premiums through payroll deductions or dues

checkoffs and to remit them to the insurer.” 29 C.F.R. §

2510.3-1(j). This case concerns the contours of endorsement.

Beginning with the ordinary meaning of “endorse,” to

endorse something is generally to indicate approval or support.

See, e.g., Oxford English Dictionary 162–63 (Compact ed.

1987) (defining “endorse” as to “vouch for” and

“endorsement” as “approving testimony”); Webster’s Third

New International Dictionary 749 (1964) (similarly defining

“endorse” as “to vouch for” and “to express definite approval

or acceptance of”). This aligns well with the final rule’s

preamble, which conceptualized the third criterion as a

“requirement of employer neutrality”—“the key to the

rationale for not treating such a program as an employee

benefit program.” 40 Fed. Reg. 34526, 34527 (Aug. 15, 1975).

In view of this, we conclude the key inquiry for

endorsement is whether an employer has strayed from the

equilibrium of neutrality. “If an employer offers no welfare

benefit plan to its employees but leaves each employee free to

shop around,” Brundage-Peterson v. Compcare Health Servs.

Ins. Corp., 877 F.2d 509, 510 (7th Cir. 1989), neutrality is

apparent. Where the employer takes one step further, merely

permitting an insurer to publicize the program and performing

only ministerial tasks, the visage of neutrality remains. See,

e.g., Butero v. Royal Maccabees Life Ins. Co., 174 F.3d 1207,

1213 (11th Cir. 1999) (explaining the safe harbor “explicitly

obliges the employer” to “refrain from any functions other than

permitting the insurer to publicize the program and collecting

premiums”); Johnson, 63 F.3d at 1137 (noting “the safe harbor

may be accessible” where “it reasonably clear that the program

is a third party’s offering”). But at some point, an employer’s

28

actions sufficiently compromise neutrality to an extent that

triggers ERISA’s “uniform regulatory regime.” Menkes, 762

F.3d at 293 (quoting Aetna Health Inc. v. Davila, 542 U.S. 200,

208 (2004)). In identifying this point, we are aided by the

decisions of our sister circuits.

At the outset, however, we emphasize that endorsement

may take many forms. Our inquiry is not a checklist but a

holistic assessment of the employer’s “involvement with the

administration of the plan.” Anderson, 369 F.3d at 1263

(quoting Hansen, 940 F.2d at 978); see also Gaylor, 112 F.3d

at 464 (looking to the “degree of participation by the

employer”). While objective, this inquiry should also consider

the viewpoint of the employee. See Thompson, 95 F.3d at 436–

37; Johnson, 63 F.3d at 1134 (finding “a communication to

employees indicating that an employer has arranged for a

group or group-type insurance program would constitute an

endorsement” if it leads a reasonable employee to believe the

program is established or maintained by the employer).15

So when does an employer stray from neutrality? We

conclude endorsement exists where there is some showing of

material employer involvement in the creation or

administration of a plan. As might be conveyed by the most

natural understanding of the term, this involvement may

manifest as an expression of encouragement. In Hansen v.

15

We note this is consistent with the Department of Labor’s

interpretation that endorsement exists if the employer “engages

in activities that would lead a member reasonably to conclude

that the program is part of a benefit arrangement established or

maintained by the employee organization.” Dep’t of Labor Op.

No. 94–26A (1994).

29

Continental Insurance Company, for example, the Fifth Circuit

emphasized that the employer had provided employees a

booklet with its name and logo that “encouraged the employees

to consider carefully participating in the group accidental death

and dismemberment plan, as it would be ‘a valuable

supplement to your existing coverages.’” 940 F.2d at 978; cf.

Johnson, 63 F.3d at 1139–41 (finding no endorsement where

the employer’s communication to employees stated the

decision was “entirely an individual one”).16

Material involvement may also constitute determining

an insurance program’s eligibility criteria and selecting the

insurance company. “The requirements for a safe harbor

exception under 29 C.F.R. § 2510.3–1(j) are strict,” Moorman

v. UnumProvident Corp., 464 F.3d 1260, 1267 (11th Cir.

2006), and the employer need only play a limited role in the

creation of the insurance program for neutrality to be

compromised.17 Where an employer selects the insurer,

16

The Department of Labor likewise considers an employer to

have endorsed a program where it “expresses to its members

any positive, normative judgment regarding the program.”

Dep’t of Labor Op. No. 94–26A (1994).

17

This mirrors the showing courts have required outside of the

safe harbor context for a plan, fund, or program to be

“established or maintained” by the employer, and thereby

subject to ERISA’s coverage. See, e.g., Gruber v. Hubbard

Bert Karle Weber, Inc., 159 F.3d 780, 789 (3d Cir. 1998)

(noting that an employer “can establish an ERISA plan rather

easily” (quoting Credit Managers Ass’n of S. California v.

Kennesaw Life & Acc. Ins. Co., 809 F.2d 617, 625 (9th Cir.

1987))); Int’l Res., Inc. v. New York Life Ins. Co., 950 F.2d 294,

297 (6th Cir. 1991) (same). Unless the employer “is a mere

30

particularly as the sole provider, and limits eligibility criteria,

these facts make the plan “a benefit closely tied to the

employer-employee relationship.” Anderson, 369 F.3d at 1265

(making this observation where an employer selected an

insurer as the sole long term disability plan offered and limited

eligibility to hourly employees); see also Butero, 174 F.3d at

1213–14 (finding endorsement where the employer picked the

insurer and deemed certain employees ineligible to

participate); Moorman, 464 F.3d at 1268 (finding endorsement

where the employer decided on at least one of the eligibility

terms and identified the plan in its employee handbook as part

of the company’s employee benefits). Thus, in Thompson, the

Sixth Circuit found sufficient employer involvement “where

the employer plays an active role in either determining which

employees will be eligible for coverage or in negotiating the

terms of the policy or the benefits provided thereunder.” 95

F.3d at 436.

This conclusion echoes across other circuits as well. See

Custer v. Pan American Life Ins. Co., 12 F.3d 410, 417 (4th

Cir. 1993) (ERISA plan existed where employer determined

benefits, negotiated terms of coverage, and paid premiums);

Gross v. Sun Life Assur. Co. of Canada, 734 F.3d 1, 10 (1st

Cir. 2013) (emphasizing that eligibility for a policy was not

only tied to employment at the company, but the company also

“determined which employees had access to that benefit.

Consequently, both in outward appearance and internally, [the

employer] played more than a bystander’s role”); Brundage-

advertiser who makes no contributions on behalf of its

employees,” the establishment requirement will be satisfied.

Gruber, 159 F.3d at 789 (quoting Credit Managers Ass’n, 809

F.2d at 625).

31

Peterson, 877 F.2d at 511 (“An employer who creates by

contract with an insurance company a group insurance plan and

designates which employees are eligible to enroll in it is

outside the safe harbor created by the Department of Labor

regulation.”). In Johnson, the First Circuit found endorsement

lacking only where the employer “had no hand in drafting the

plan, working out its structural components, determining

eligibility for coverage, interpreting policy language,

investigating, allowing and disallowing claims, handling

litigation, or negotiating settlements.” 63 F.3d at 1136

(emphasis added).

Turning to the case at hand, the question of endorsement

is close. Lucasse’s letter to Dr. McCann regarding the RSDP

states, “[Provident] understand[s] your ability to participate in

this plan is limited by the fact that disposable income is

probably pretty tight. We have been able to mitigate this

problem by achieving a plan design and pricing structure

expressly for residents, which makes the premium affordable.”

Joint App. at 166. This suggests Henry Ford Hospital had no

involvement in determining the substance of Dr. McCann’s

supplemental insurance policy or in the RSDP’s

administration. Nonetheless, Dr. McCann has failed to

demonstrate that a reasonable employee would view the plan

merely as a third-party offering, and it appears that sufficient

indicia of endorsement are present to preclude application of

the safe harbor.

Several facts are of particular importance. First,

residents were not presented with a menu of options or free to

select any insurer. To the contrary, Henry Ford Hospital

selected Provident as the sole provider of supplemental

disability insurance for the RSDP. See McCann v. Unum

32

Provident, 921 F. Supp. 2d 353, 368 (D.N.J. 2013). The

Hospital also acted to encourage enrollment in the RSDP and

expressed some judgment about the plan because its broker

explained Provident “is the industry’s leader in individual

disability coverage for physicians” and was “chosen by the

Henry Ford Medical Group to provide supplemental disability

insurance to Ford physicians.” Joint App. at 166. A reasonable

employee could conclude the Hospital was endorsing the plan

from this language.

Furthermore, the District Court found that the Hospital

determined eligibility for the RSDP.18 See McCann, 921 F.

Supp. 2d at 360. As noted, this is sufficient to compromise the

appearance of neutrality because the Hospital played a material

role in creating the RSDP. The District Court also found a

perception of endorsement “would rise from and be fostered by

the agreements repeatedly executed by [Dr.] McCann and the

Hospital, wherein the Hospital agreed to provide disability

insurance as part of its standard benefits package.” Id. at 368.

This finding goes to the core of endorsement’s purpose—that

the plan not be perceived as a benefit of employment.

18

At oral argument, Dr. McCann’s counsel contested the

origins of Dr. McCann’s policy and its relation to the RSDP.

See Transcript of Oral Argument at 6, 10–11, McCann v. Unum

Provident (No. 16-2014) (3d Cir. April 26, 2018); see also

Appellant’s Reply Br. at 26 (“The Policy was not part of a

program of benefits available to current Hospital employees or

of the RSDP.”). But counsel fails to point to any evidence in

the record which would suggest the District Court’s finding

that Dr. McCann was a participant in and a beneficiary of the

RSDP, see McCann, 921 F. Supp. 2d at 370, is clearly

erroneous.

33

For these reasons, Dr. McCann fails to establish the safe

harbor’s third criterion and ERISA shall provide the governing

framework.

IV. Dr. McCann’s Claim for Total Disability

We now turn to the substance of Dr. McCann’s claim

for Total Disability. While ERISA governs Dr. McCann’s

supplemental coverage, both parties agree that Provident’s

decision to terminate Dr. McCann’s benefits must be reviewed

de novo. Where a plan administrator is vested with the

discretionary authority to construe the terms of a plan or

determine benefit eligibility, we review its decisions under an

arbitrary and capricious standard. See Firestone Tire & Rubber

Co. v. Bruch, 489 U.S. 101, 115, (1989). But where, as here,

such discretionary authority is lacking, our review is plenary.

Id.

In exercising this plenary review, our role “is to

determine whether the administrator . . . made a correct

decision.” Viera v. Life Ins. Co. of N. Am., 642 F.3d 407, 413

(3d Cir. 2011) (quoting Hoover v. Provident Life & Accident

Ins. Co., 290 F.3d 801, 808–09 (6th Cir. 2002)). Our review is

not colored by a presumption of correctness and we determine

whether the insured was entitled to benefits under the plain

terms of their policy. Id. at 414. As noted, Dr. McCann’s policy

defines “Total Disability” as being unable to perform “the

substantial and material duties of your occupation.” Joint App.

at 308. Dr. McCann’s claim for disability benefits accordingly

raises three questions: What was Dr. McCann’s “occupation”

at the time he became disabled? What were the “substantial and

material duties” of that occupation? And do Dr. McCann’s

34

medical conditions prevent him from performing those duties?

We address these questions in turn.

A. Defining Dr. McCann’s Occupation

Beginning with the question of Dr. McCann’s

occupation, the relevant policy language states:

[Y]our occupation means the

occupation (or occupations, if

more than one) in which you are

regularly engaged at the time you

become disabled. If your

occupation is limited to a

recognized specialty within the

scope of your degree or license, we

will deem your specialty to be your

occupation.

Joint App. at 308.

In terminating Dr. McCann’s benefits, Provident

explained its initial payments were based on an incorrect

understanding of Dr. McCann’s occupation and that while “Dr.

McCann was hired by and listed by Holzer Clinic as an

Interventional Radiologist, his CPT codes clearly reflect[ed]

that, in the years prior to disability, Dr. McCann was practicing

primarily as a Diagnostic Radiologist.” Joint App. at 153. The

District Court agreed with this analysis, see McCann v. Unum

Provident, No. CV 11-3241 (MLC), 2016 WL 1161261, at *34

(D.N.J. Mar. 23, 2016), but Dr. McCann maintains the record

undisputedly shows his “‘recognized specialty’ is

interventional radiology, involving stressful, intrusive medical

procedures and weekend and night call.” Appellant’s Br. at 48.

35

We therefore consider, in light of the policy’s definition,

whether Dr. McCann’s occupation is interventional radiology

or diagnostic radiology for purposes of evaluating his disability

claim.

As an initial matter, we address Provident’s contention

that our decision in Lasser v. Reliance Standard Life Insurance

Company, 344 F.3d 381 (3d Cir. 2003) should guide this

analysis. There, we considered the meaning of “regular

occupation” in an orthopedic surgeon’s disability insurance

policy and concluded “‘regular occupation’ is the usual work

that the insured is actually performing immediately before the

onset of disability.” Id. at 386. But this statement was

addressing the insurer’s decision to interpret “regular

occupation” based on a typical work setting for any employer

in the general economy. Id. at 385. We held that “[b]oth the

purpose of disability insurance and the modifier ‘his/her’

before ‘regular occupation’” made clear the analysis had to be

conducted based on the insured’s own occupation. Id. at 386.

No one disputes Dr. McCann’s own occupation is the relevant

scope of analysis. We are also mindful that Lasser, and other

cases cited by the parties, turn on the policy language specific

to those cases and are therefore of no application to Dr.

McCann’s specialty-specific policy.19

Turning to the policy language at issue here, we agree

that particularly the first part of the definition—defining

occupation as that “in which you are regularly engaged at the

19

For example, Lasser discusses the meaning of “regular

occupation” because the insured’s policy classified a claimant

as totally disabled when he was “[in]capable of performing the

material duties of his/her regular occupation.” 344 F.3d at 383.

36

time you become disabled”—supports a practical assessment

of Dr. McCann’s pre-disability activities, similar to that in

Lasser. But importantly, this language precedes, and is

therefore qualified by, the concept that “your occupation [can

be] limited to a recognized specialty.” Joint App. at 308.

Because the record demonstrates diagnostic radiology was a

component of Dr. McCann’s responsibilities as an

interventional radiologist, we conclude Provident’s final

determination regarding Dr. McCann’s occupation was

incorrect.

First, from a formalistic perspective, it is undisputed

that Dr. McCann possesses the qualifications of an

interventional radiologist. He is certified in that specialty.20 Dr.

McCann was also hired by Holzer Clinic as one of three

interventional radiologists, and, in fact, would not have been

hired but for his ability to perform some interventional work.

Functionally, it is also clear from Dr. Long’s job

description, detailing Dr. McCann’s duties and

responsibilities, that Dr. McCann performed at least some

amount of interventional radiology, estimated at as much as 20

hours per week. The District Court focused its analysis on the

fact that “the diagnostic duties associated with his occupation

accounted for 91% of the procedures he performed each week

during the three and a half year period preceding [Dr.

20

Specifically, Dr. McCann’s Statement of Material Facts

describes his education as the “completion of a surgical

internship, four years of study as a diagnostic radiologist, and

board-certification as a diagnostic radiologist, followed by a

one-year interventional radiology fellowship program.” Joint

App. at 4053.

37

McCann’s] application for disability leave.” McCann, 2016

WL 1161261, at *34 (internal quotations omitted). But we note

that a purely mechanical comparison of the number of

interventional procedures and diagnostic tasks fails to account

for the time dedicated to each type of work. Dr. Long explained

during Provident’s field visit that in the same amount of time

it can take to do an interventional procedure, e.g., an

angioplasty, he can probably read more than 10 MRIs.

Even accepting that diagnostic work accounted for the

bulk of Dr. McCann’s billing, the record makes clear that

interventional radiologists perform diagnostic radiology.

When asked whether Dr. McCann was hired as an

interventional radiologist or a diagnostic radiologist, Dr. Long

replied “[b]oth” and explained that interventional radiologists

do both things. Joint App. at 3148. The first CPT review

conducted by Provident produced a similar percentage ratio

between interventional procedures and diagnostic readings,

and these same percentages were used to support a conclusion

that Dr. McCann performed duties related to “Diagnostic &

Interventional Radiology prior to disability.” Joint App. at

1514. We also note the American Board of Radiology

recognizes a specialty in “Interventional Radiology and

Diagnostic Radiology” distinct from a specialty in “Diagnostic

Radiology.” See ABMS Guide to Medical Specialties 66–67

(2018), https://www.abms.org/media/176512/abms-guide-to-

medical-specialties-2018.pdf.

Thus, the interventional aspects of Dr. McCann’s

practice cannot be cast aside from the definition of his

occupation merely by focusing exclusively on the number of

“units” of work Dr. McCann billed. The policy explicitly

cabins the definition of “occupation” to an insured’s

38

recognized medical specialty, and, in fact, this was a primary

selling point in Lucasse’s marketing materials.21 The letter

21

Specifically, Lucasse’s letter stated:

[T]he definitions written in

disability policies are of utmost

importance, and may vary greatly.

We want to assure you that

Provident has achieved its position

by providing the best possible

definitions, and continually

updating to the industry’s highest

standards . . . .

The single greatest concern for a

physician is the definition of

disability. Unlike many

occupations, a doctor may become

disabled by an injury or illness that

would not preclude working in

another occupation. Your program

will state that you are disabled if

“you can not do the duties of your

occupation” without regard to your

ability to do any other. It further

states that your occupation is a

recognized medical specialty, with

its own specific duties. Thus, it is

possible for you to be disabled

within your specialty while you

can still be a physician.

This explanation of benefits is

offered to assure you that all of the

39

represented that “your occupation is a recognized medical

specialty, with its own specific duties,” and explains “it is

possible for you to be disabled within your specialty while you

can still be a physician.” Joint App. at 168 (emphasis added).

The record reflects Dr. McCann was performing at least some

interventional procedures—procedures a diagnostic radiologist

would not be able to perform. Accordingly, we hold Dr.

McCann’s occupation to be an interventional radiologist for

purposes of assessing the merits of his claim.

B. Dr. McCann’s “Substantial and Material

Duties”

We next turn to Dr. McCann’s “substantial and material

duties,” having defined Dr. McCann’s occupation as his

specialty: interventional radiology. Provident again relies on

our decision in Lasser to argue that materiality is necessarily

derivative of the income earned from and the amount of time

spent performing a duty. Once again, we decline to apply

Lasser out-of-context to Dr. McCann’s specialty-specific

policy.

Furthermore, in Lasser we considered whether night

call and emergency surgeries were “material” to an orthopedic

surgeon’s occupation. We concluded yes, finding the district

court’s reasoning supported by comparing the insured’s pre-

disability earnings with his post-disability earnings from a

reduced schedule. See 344 F.3d at 387–88. But we also

considered the materiality question in the abstract and

elements of planning have been

addressed.

Joint App. at 166–168 (emphasis added).

40

concluded those duties were material based, in part, on a labor

market survey the insurer had conducted. Id. Even if Lasser

were helpful to our analysis, therefore, it in no way suggests an

analysis of pre-and post-disability earnings is the only measure

of materiality.

On the record before us, we think Dr. McCann’s

“substantial and material duties” are established and include

both his ability to perform interventional procedures and his

ability to do so on nights and weekends.22 As noted, Dr.

McCann “would not have been hired by Holzer Clinic if he did

not perform some interventional radiology.” Joint App. at

3148. Dr. Long also explained during Provident’s field visit

that diagnostic radiology was evenly divided among the

practicing radiologists at Holzer and Dr. McCann’s

interventional responsibilities were “on top of” his “even

share” of diagnostic duties. Joint App. at 3149. As one of three

interventional radiologists, Dr. McCann was responsible for

performing all interventional procedures every third week.

Regarding on-call work, Dr. Long confirmed that

Holzer requires radiologists to perform on-call duty for

weekends, holidays, and emergency cases and “has never hired

a radiologist who has been unable to perform on-call work.”

Joint App. at 3152. When asked whether Holzer would

consider hiring Dr. McCann again, Dr. Long stated that Holzer

might, hypothetically, if he “could work as a diagnostic

22

Indeed, Provident’s counsel agreed at oral argument that

working night shifts and weekends is a substantial and material

duty of Dr. McCann’s occupation. See Transcript of Oral

Argument at 35, McCann v. Unum Provident (No. 16-2014)

(3d Cir. April 26, 2018).

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radiologist who could also perform on-call work.” Joint App.

at 3151 (emphasis added).

Provident and the District Court place significant

emphasis on Dr. McCann’s CPT codes and the fact that over

82% to 90% of his income was generated from performing

diagnostic radiology. Again, we note that Dr. McCann’s CPT

codes do not take into account that a single interventional

procedure can take significantly longer to perform than a

diagnostic procedure. And to the extent Dr. McCann’s income

was predominantly derived from his diagnostic work, dollar

value of billings is only one measure of “substantial and

material”—it does not eclipse all other aspects of Dr.

McCann’s occupation, particularly when Dr. McCann’s policy

defines his occupation as limited to his specialty. The record

makes clear that diagnostic radiology is one component of an

interventional radiologist’s specialty, but not the only

component. We will not define Dr. McCann’s occupation and

its “substantial and material duties” solely by counting up

billing units.

C. Dr. McCann’s Ability to Perform his

“Substantial and Material Duties”

One question remains: whether Dr. McCann’s medical

conditions prevented him from being able to perform the

substantial and material duties of his specialty, either by

rendering him physically unable or by so limiting his

availability that he was precluded from continuing his practice

as an interventional radiologist. On this question we find a

dispute of material fact, which we remand for the District Court

to consider.

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The record demonstrates some level of consensus on

this question. Dr. Davids concluded “the prognosis for

functional improvement is poor because it is difficult to

maintain [a] level of tight BP control while working in a

stressful occupation, such as interventional radiology.” Joint

App. at 1455. Dr. Parisi concluded “[i]f [Dr. McCann] is an

interventional radiologist it is reasonable that he would not be

able to perform some of the interventional activities.” Joint

App. at 2043. Dr. Lambrew similarly concluded McCann could

perform “[s]ustained, full time light work as a non-

interventional Radiologist,” Joint App. at 2619, and nurse

practitioner Loring’s notes suggest McCann “try to do just

regular radiology,” Joint App. at 2435.

But Dr. Sweeney’s most recent report concluded

“[t]here are no limitations on function supported” which

“would prevent Dr. McCann from resuming on a full-time

basis his previous occupation as an interventional and

diagnostic radiologist.” Joint App. at 3198-99. This raises

enough of a factual issue to warrant remand.

V. Dr. McCann’s Claim for Residual Disability

We also remand for the District Court to consider Dr.

McCann’s claim for Residual Disability. The court found this

argument untimely because the claim was filed after

Provident’s final determination and emphasized that to

consider Residual Disability in the first instance would “thwart

ERISA’s underlying objective to promote the exhaustion of

administrative remedies.” McCann, 2016 WL 1161261, at *35.

While the doctrine of exhaustion undoubtedly furthers

numerous sound policies, we think Dr. McCann’s failure to

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exhaust the Residual Disability claim can be excused in this

instance.

Exhaustion, in the ERISA context, is not a rule of

jurisdiction. See Metro. Life Ins. Co. v. Price, 501 F.3d 271,

279 (3d Cir. 2007). Rather, exhaustion is “a judicially-crafted

doctrine” placing “no limits on a court’s adjudicatory power.”

Id. While traditionally the exhaustion requirement is strictly

enforced, we have recognized an exception where “resort to the

administrative process would be futile.” Berger v. Edgewater

Steel Co., 911 F.2d 911, 916 (3d Cir. 1990); see also Price, 501

F.3d at 279 (“[T]he failure to exhaust will be excused in cases

where a fact-sensitive balancing of factors reveals that

exhaustion would be futile.”).

The principle of futility lends itself to this case.

Provident addressed Residual Disability in its December 2009

letter terminating benefits and in its September 2010 letter

denying Dr. McCann’s appeal. The 2009 letter states, for

example: “Based on our review of you [sic] medical conditions

we have determined that you are no longer Totally Disabled or

Residually Disabled in accordance with the terms of your

policy.” Joint App. at 124. Provident also explained:

Although you indicated that you

previously worked 60 hours per

week, your ability to work 50

hours per week would not be

expected to cause a reduction of

your monthly income of more than

20% as required by the terms of

Residual Disability. As such, you

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are not Residually Disabled in

accordance with the policy terms.

Joint App. at 126. In the 2010 letter, Provident continues to say

“it was determined [Dr. McCann] can perform the duties of his

occupation, and therefore, was not Totally or Residually

Disabled.” Joint App. at 149. Based on this language, Dr.

McCann could reasonably have been under the impression that

Provident was considering both types of disability claims in its

review or that raising a Residual Disability claim would be

futile.

Regarding ERISA’s underlying objectives, we have

recognized that exhaustion helps to reduce frivolous lawsuits,

promote consistent treatment of claims, and to minimize the

costs of settlement. See Prince, 501 F.3d at 279. Exhaustion

also “has the salutary effect of refining and defining the

problem for final judicial resolution.” Id. (internal quotation

marks and citation omitted). These objectives are important,

but Dr. McCann’s claim for Residual Disability is based on a

medical condition Provident has already considered and

approved for Total Disability and, as such, the traditional

purposes of exhaustion are less compelling here. Particularly

in light of Provident’s consideration of Residual Disability,

both in its initial determination and in response to Dr.

McCann’s appeal, we conclude the doctrine should not be

applied without regard to the particular facts of this case.

VI. Conclusion

For the foregoing reasons, we will affirm the District

Court’s January 31, 2013 determination as to ERISA’s

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applicability but will vacate its March 23, 2016 grant of

summary judgment for defendant-appellee and remand for

further proceedings consistent with this opinion.

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