US Supreme Court Rules in MetLife v. Glenn: Major Impact on ERISA Long Term Disability Claims Around Country
The decision all ERISA long term disability attorneys around the country have been waiting for, Metropolitan Life Insurance v. Glenn, 554 U.S. ____ (2008) , finally came down from the U.S. Supreme Court this morning . Click here for the full decision.
The issues in MetLife v Glenn were whether MetLife, as a plan administrator, had a "conflict of interest" by being both the decision-maker and payer of claims, and if a conflict existed, what "standard of judicial review" should be used by the courts when a beneficiary appeals a denial of ERISA long term disability benefits. The Court held:
Often the entity that administers the plan, such as an employer or an insurance company, both determines whether an employee is eligible for benefits and pays benefits out of its own pocket. We here decide that this dual role creates a conflict of interest; that a reviewing court should consider that conflict as a factor in determining whether the plan administrator has abused its discretion in denying benefits; and that the significance of the factor will depend upon the circumstances of the particular case. See Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 115 (1989).
Many claimant ERISA long term disability lawyers had been hoping for a de novo standard or review when a conflict existed. The Court clearly rejected this standard in favor of a quite vague "factor test" in deciding whether a plan administrator "abused its discretion" based upon the facts of a particular case.
While better scholars than myself will surely be able to dissect and analyze this decision in more detail in the coming days and weeks, it seems clear that: 1) this is generally a good decision for ERISA long term disability claimants and 2) ERISA long term disability lawyers and courts will be struggling to apply the Supreme Court's intentionally vague "factor test" for years to come.
Often the entity that administers the plan, such as an employer or an insurance company, both determines whether an employee is eligible for benefits and pays benefits out of its own pocket.
david