Thuston v. Mutual of Omaha Insurance Company

On February 26, 2026, in the U.S. District Court for the District of Nebraska, Plaintiff Evelyn Thuston filed suit against Mutual of Omaha Insurance Company. Thuston, a former senior data analyst, alleges the insurer wrongfully terminated her long-term disability benefits despite her debilitating fibromyalgia diagnosis and supporting medical evidence from treating physicians. The complaint asserts the insurer relied on a flawed paper-only review by a biased consulting physician who never physically examined her, while ignoring functional capacity evaluations confirming her inability to perform sedentary work. Thuston claims breach of contract and bad faith, contending Mutual of Omaha abused its discretionary authority under an ERISA-governed group policy to prioritize cost containment over a fair assessment of her claim, causing severe financial and emotional distress.

As of June 2026, the case is in active discovery. A June 3, 2026 scheduling order set trial for March 2027. The court denied Mutual of Omaha’s partial motion to dismiss the bad faith claim, ruling the factual allegations of biased claims handling were sufficient to proceed. No final judgment has been entered.

The central dispute is whether Mutual of Omaha arbitrarily and capriciously denied long-term disability benefits by disregarding objective medical evidence of fibromyalgia and relying exclusively on a file review that contradicted treating physicians' findings, thereby violating its fiduciary duty under ERISA and breaching the insurance contract's implied covenant of good faith and fair dealing.

The case has drawn significant attention from disability rights advocates and ERISA practitioners, highlighting the controversial reliance on “paper reviews” over physical examinations in claim denials. It amplifies the ongoing national discourse on insurance industry practices regarding invisible illnesses like fibromyalgia, where subjective symptoms are often minimized. Legal commentators suggest the court’s early rulings could signal a stricter scrutiny of discretionary denials, potentially influencing how insurers evaluate chronic pain claims to avoid bad faith liability.