Toward the “Vanishing Point”: First Circuit Clarifies Minimal Weight for Structural Conflicts When Administrators Mitigate Bias and Provide Reasoned Explanations under ERISA — Commentary on Bernitz v. USAble Life

Introduction

In Bernitz v. USAble Life, the First Circuit affirmed a district court’s grant of summary judgment upholding the termination of long-term disability (LTD) benefits under an ERISA-governed plan. The case centers on plaintiff-appellant Steven Bernitz, a senior executive who ceased working in 2014 due to chronic back pain and received LTD benefits for roughly five years before defendant-appellee USAble Life terminated benefits in 2019. The termination followed evidence of significant weight loss, increased physical activity, extensive travel, and surveillance depicting functional capabilities inconsistent with continued disability.

On appeal, Bernitz argued that: (1) USAble’s structural conflict of interest (as both claim adjudicator and payor) tainted the process; (2) USAble failed to apply and explain the plan’s “narrow” disability definition and its disagreements with treating physicians; and (3) the administrative record conclusively proved disability. The First Circuit rejected these arguments, providing a detailed roadmap for how courts should weigh structural conflicts post-Glenn, how administrators should apply plan definitions grounded in vocational evidence, and what constitutes a sufficient explanation when disagreeing with treating providers’ disability opinions.

The decision refines, rather than revolutionizes, ERISA review. Its precedential significance lies in two clarifications:

When an administrator meaningfully mitigates bias (e.g., independent physician reviews through third-party vendors, a segregated appeals unit, and good-faith benefit payments during appeal), Glenn’s structural conflict factor may be afforded little weight—approaching the “vanishing point.”
Substantial evidence grounded in common-sense functional capacity and vocationally relevant tasks—alongside reasoned letters explaining disagreements with treating providers—will support termination, even amid conflicting evidence.

Summary of the Judgment

The First Circuit affirmed the district court’s summary judgment for USAble Life. Applying ERISA’s deferential standard due to the plan’s grant of discretionary authority, the court held that USAble’s termination decision was reasoned and supported by substantial evidence. The court:

Acknowledged a structural conflict of interest but gave it little weight because USAble employed bias-reducing measures (independent reviewers via third-party vendors, separate appeals unit, continued payments under reservation during review) and there was no record of biased claims history or procedural unreasonableness.
Found that USAble identified and applied the plan’s own-occupation definition—“prevents you from performing at least one of the material duties” (including the ability to work full-time)—using a vocational assessment of physical demands (sitting, keyboarding, reaching, standing, walking, light lifting, occasional travel).
Held that USAble adequately explained why it disagreed with treating physicians’ permanent-disability opinions, as required by the plan and consistent with Department of Labor claims-procedure regulations, by citing documented functional improvements, surveillance, and analytical critiques of a claimant-sponsored Functional Capacity Evaluation (FCE).
Concluded that, despite contrary evidence, the totality of the record (weight loss, regular exercise with a trainer, routine walking, ability to drive and travel—including international safari travel, and surveillance of gym activities) provided substantial evidence supporting a finding that the claimant could perform the material duties of his regular occupation.

Analysis

Precedents Cited and Their Influence

Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989): Established the framework that when a plan confers discretionary authority to an administrator, courts review benefit determinations under an abuse-of-discretion (arbitrary and capricious) standard. The First Circuit reiterates that “arbitrary and capricious” and “abuse of discretion” are functionally equivalent in ERISA benefits cases.
Metropolitan Life Ins. Co. v. Glenn, 554 U.S. 105 (2008): Instructs courts to weigh case-specific factors, including an administrator’s structural conflict (adjudicator-payor role). Glenn teaches that the weight of this factor varies: it can be significant where the conflict probably skewed the decision, but can recede “to the vanishing point” where the administrator takes steps that reduce bias and promote accuracy. The First Circuit applies this sliding-scale approach and finds USAble’s mitigation efforts persuasive.
Lavery v. Restoration Hardware Long Term Disability Benefits Plan, 937 F.3d 71 (1st Cir. 2019): Emphasizes the “true fiduciary” lens—asking whether the administrator tried to fairly decide the claim, “letting the chips fall as they may.” It also cautions against procedural unreasonableness and inconsistent termination rationales. The First Circuit invokes Lavery to cabin the structural-conflict inquiry to truly structural or procedural concerns rather than mere disagreements with evidence.
Denmark v. Liberty Life Assurance Co., 566 F.3d 1 (1st Cir. 2009): Requires courts to inquire into what steps an administrator took to insulate decision-making from financial influence. The court credits USAble’s segregation of functions and use of independent reviewers selected via a vendor.
Dutkewych v. Standard Ins. Co., 781 F.3d 623 (1st Cir. 2015); Colby v. Union Sec. Ins. Co., 705 F.3d 58 (1st Cir. 2013): Reinforce that the dispositive question is whether the decision is “reasoned and supported by substantial evidence.” The First Circuit frames all of its analysis through this lens.
Wright v. R.R. Donnelley & Sons Co., 402 F.3d 67 (1st Cir. 2005): Conflicting evidence does not render a decision unreasonable if substantial evidence supports the administrator’s determination. This principle directly undergirds the court’s deference amid an 8,000-page record containing contrary opinions and assessments.
Leahy v. Raytheon Co., 315 F.3d 11 (1st Cir. 2002): Addresses the “discongruence” between summary judgment standards and deferential ERISA review and cautions against reweighing the administrative record de novo. The court applies Leahy to stay within the deferential posture.
Santana-Díaz v. Metropolitan Life Ins. Co., 919 F.3d 691 (1st Cir. 2019); O’Shea v. UPS Retirement Plan, 837 F.3d 67 (1st Cir. 2016); Stamp v. Metropolitan Life Ins. Co., 531 F.3d 84 (1st Cir. 2008); Heimeshoff v. Hartford Life & Accident Ins. Co., 571 U.S. 99 (2013): These decisions collectively stress adherence to plan terms as written and the limited judicial role: courts need not adopt the “best” reading of the plan, only assess whether the administrator’s interpretation and application were reasonable and supported by the record.
Black & Decker Disability Plan v. Nord, 538 U.S. 822 (2003): Rejects a Social Security–style “treating physician rule” in ERISA cases. The First Circuit clarifies that Nord did not preclude explanation requirements and notes that USAble’s plan—and Department of Labor regulations—required explanations when disagreeing with treating providers. USAble met that obligation.

The Court’s Legal Reasoning

1) Standard of Review and the Court’s Posture

The appellate court reviews summary judgment de novo but reviews the underlying ERISA decision deferentially because the plan grants USAble “sole discretionary authority” to resolve eligibility and interpret the policy. The operative inquiry is not whether the court would have reached the same conclusion, but whether USAble’s decision was reasoned and supported by substantial evidence.

2) Structural Conflict of Interest — Weight Depends on Mitigation and Case-Specific Indicators

The court acknowledges the inherent conflict when an insurer both decides claims and pays benefits. Following Glenn, it evaluates case-specific factors to decide how heavily to weigh that conflict. It finds:

USAble meaningfully insulated the process by using vendor-selected independent physicians, routing appeals to a separate unit, and continuing benefit payments under reservation while reviewing new evidence.
No evidence showed a history of biased claims administration, inconsistent termination rationales, or meaningful procedural defects.

Result: the conflict factor receives little weight. The court also distinguishes between true “case-specific factors” relevant to conflict (e.g., procedural irregularities, inconsistent reasons) and arguments that simply recharacterize contested evidence. The latter do not increase the weight accorded to conflict.

3) Applying Plan Terms — “Material Duties” of the Regular Occupation and Reasonable Accommodations

The plan defines disability as the inability, under regular physician care, to perform at least one of the material duties of the regular occupation with reasonable accommodations. One material duty is the ability to work full-time. USAble performed a vocational assessment detailing physical demands for Bernitz’s executive role: frequent sitting/keyboard use/reaching/light lifting/pushing-pulling; occasional standing/walking/handling/crouching and up to 20 lbs lifting/pushing-pulling; occasional travel.

The court concludes USAble actually used this framework. It shared the plan standard with reviewers and assessed whether the record supported performance of the listed tasks. The administrator’s determination relied on:

Documented weight loss of approximately 70 pounds with improved pain and function.
Consistent exercise with a trainer, treadmill use, and resistance training.
Walking six days per week for up to an hour, driving, traveling domestically and internationally (including a two-week African safari).
Surveillance showing normal gait, entering/exiting/driving a vehicle, and performing gym activities (treadmill, barbells, machines).

These are common-sense, vocationally relevant indicators of an ability to sit, stand, walk, keyboard, lift within light limits, and travel occasionally. Although the record included contrary views (e.g., earlier opinions describing permanent impairment), the administrator was entitled to credit the totality of more recent and objective indicators of functional improvement.

The court also rejects the claim that USAble applied a Social Security standard. USAble expressly applied the plan definition; any reference to Social Security proceedings did not control the analysis and had no bearing on the conflict-of-interest factor.

4) Explaining Disagreement with Treating Physicians and Claimant-Sponsored Evaluations

USAble’s plan and the Department of Labor’s claims-procedure rules require that denial letters explain disagreements with treating and vocational professionals. The court finds USAble’s determination letters satisfied this requirement by:

Engaging with Dr. Patel’s statements (e.g., “permanent and irreversible” condition; “never” able to return to work) and explaining why those views were inconsistent with contemporaneous medical notes and observed functional capacity.
Detailing why the claimant’s Functional Capacity Evaluation had analytical flaws, as identified by independent reviewers (e.g., inconsistencies and omissions), and why additional testing did not alter the conclusion.
Addressing neuropsychological evidence and the competing expert dialogue during the voluntary supplemental review without changing the adverse determination.

Importantly, the court clarifies that Nord doesn’t bar explanation requirements; it simply rejects a special deference to treating physicians. Here, explanation was required—and provided.

5) Substantial Evidence and the Limits of Reweighing

The court underscores that the existence of contrary evidence (including opinions that the condition was permanent) does not render the decision arbitrary where substantial evidence points the other way. With an extensive record documenting sustained functional improvements and corroborating surveillance, the administrator’s rationale met the “reasoned and supported” standard. The court declined to reweigh the evidence or substitute its judgment for the administrator’s.

Impact and Implications

1) Weight of Structural Conflicts after Glenn

This decision operationalizes Glenn’s sliding scale. When plan administrators:

engage independent physicians via third-party vendors,
segregate appeals from claims adjudication, and
make good-faith payments during ongoing review (e.g., under a reservation of rights),

courts in the First Circuit may afford minimal weight to structural conflicts—potentially approaching Glenn’s “vanishing point,” absent other red flags (e.g., inconsistent rationales, procedural irregularities, or a history of biased administration).

2) Substantial Evidence Can Be “Common-Sense” and Vocationally Grounded

The case affirms that evidence of a claimant’s real-world activities—consistent and sustained exercise, travel, driving, and observed functionality—can provide substantial evidence that the claimant can perform the material duties of the occupation, especially where a vocational analysis has translated those duties into concrete physical demands. Administrators should explicitly map activities and observations to each duty (sitting, standing, keyboarding, lifting within limits, occasional travel).

3) Treating Providers’ Conclusions Require Engagement, Not Deference

Administrators need not defer to treating physicians but must explain disagreements. Thoughtful, detailed denial letters that synthesize the record and address claimant-sponsored assessments (e.g., FCEs, neuropsychological tests) will carry significant weight on review. Claimants, conversely, should ensure that their providers’ opinions are consistent with the day-to-day record (office notes, therapy notes, travel consults) and contemporaneous function.

4) Social Security Determinations and ERISA

While Social Security decisions can be informative, they are neither controlling nor especially probative of an insurer’s structural conflict. Administrators should focus on plan terms and vocationally relevant evidence; courts will do likewise.

5) Practical Guidance

For administrators: Document bias-mitigation steps; commission vocational assessments; tie evidence to each material duty; address all significant contrary evidence; and write detailed, iterative letters explaining medical disagreements.
For claimants and counsel: Provide objective testing that directly addresses specific material duties; reconcile provider opinions with daily activities and travel; respond timely to reviewer critiques; and, where possible, contextualize surveillance snapshots with medical explanations and functional variability.

Complex Concepts Simplified

Structural conflict of interest: Exists when the entity that decides claims also pays benefits. Under Glenn, it is a factor whose weight depends on how well the administrator has insulated decision-making from financial influence and on case-specific signs of bias or fairness.
Abuse of discretion / Arbitrary and capricious: A highly deferential standard of review. The question is whether the decision was reasoned and supported by substantial evidence—not whether a court would have decided differently.
Substantial evidence: More than a mere scintilla; relevant evidence that a reasonable mind might accept as adequate to support a conclusion. It can include medical records, surveillance, and real-world functional activities.
Vocational assessment: A study transforming a job title (e.g., senior executive) into concrete functional tasks (sitting, keyboarding, standing, walking, lifting limits, travel). Disability is then assessed against these tasks.
Treating physician rule (Nord): ERISA does not require special deference to treating physicians. Administrators must consider those opinions but may rely on other credible evidence. Current DOL rules and many plans nonetheless require administrators to explain disagreements with treating providers.
Reservation of rights payments: An insurer may continue paying benefits while reserving the right to recoup or terminate based on ongoing review. Doing so can indicate good-faith processing and reduce the weight of any conflict-of-interest factor.
Social Security vs. ERISA: Social Security uses its own legal standards and administrative procedures; ERISA plans are governed by plan terms and deferential judicial review when discretion is granted. One does not control the other.

Conclusion

Bernitz v. USAble Life strengthens and clarifies ERISA’s deferential review in the First Circuit in three ways. First, it concretizes Glenn’s teaching that structural conflict may carry minimal weight when an administrator demonstrates robust bias mitigation and fair process. Second, it confirms that administrators may rely on common-sense, vocationally connected evidence—documented functional improvements, travel, exercise, and surveillance—to support a finding that a claimant can perform the material duties of the regular occupation. Third, it reinforces that while treating physicians’ opinions must be addressed, they are not dispositive; well-reasoned letters that engage with and explain disagreements will suffice.

The upshot is a practical compliance roadmap: plan administrators who separate financial and adjudicative functions, engage independent reviewers, apply plan definitions tethered to vocational demands, and provide detailed explanations are well-positioned to withstand judicial scrutiny. Claimants, in turn, should ensure that medical opinions are consistent with daily functioning and directly linked to the job’s material duties. In the First Circuit, when these conditions are met, the structural conflict factor is likely to recede—sometimes nearly to Glenn’s “vanishing point”—and substantial-evidence deference will carry the day.