Title: Federal Courts Struggle with Supreme Court Refusal to Promulgate a Bright-Line Rule for Evaluating ERISA Plan Administrators' Conflicts of Interest
Abstract: Federal Courts Struggle with Supreme Court Refusal to Promulgate a Bright-Line Rule for Evaluating ERISA Plan Administrators' Conflicts of Interest- Metropolitan Life Insurance Company v. Glenn.1 - The Employee Retirement Income Security Act of 1974 (ERISA) regulates employer-provided pension and welfare benefit plans to ensure that participants receive their promised benefits.2 Under an ERISA-governed employee benefit plan, a single entity may act in a dual role as both an insurer and payer of benefit claims.3 ERISA requires administrators to a full and fair review of claim denials.4 In event of a benefit denial, beneficiaries may seek judicial review after exhausting their administrative remedies.5 Where ERISA grant[s] administrator or fiduciary discretionary authority to determine eligibility for benefits, courts must review denials deferentially.6 In Metropolitan Life Insurance Company v. Glenn, after being diagnosed with a heart condition, Respondent Wanda Glenn (Glenn) applied for disability benefits from Metropolitan Life Insurance Company (MetLife).7 MetLife served as both administrator and insurer of Glenn's insurance plan under ERISA.8 In 2000, MetLife determined that Glenn qualified for 24 months of disability and in 2002 an Administrative Law Judge determined that she could not perform[] any job[] for which she could qualify existing in significant numbers in national economy.9 Accordingly, Social Security Administration (SSA) awarded Glenn permanent disability payments.10 MetLife, however, denied Glenn's claim for continued benefits under a similar standard requiring Glenn's condition prevent her from both performing her own job and the material duties of any gainful occupation for which she was reasonably qualified [,] finding her capable of performing full time sedentary work.11 Following exhaustion of her administrative remedies, Glenn filed suit in Southern District of Ohio, as permitted under ERISA.12 The federal district court denied Glenn relief.13 However, on appeal Sixth Circuit, under a deferential standard of review as prescribed by ERISA, 14 reversed lower court's holding.15 In finding an abuse of discretion, Sixth Circuit specifically determined that MetLife 's position as both determining eligibility for and providing benefits presented a conflict of interest, but treated it only as a factor.16 The Sixth Circuit also considered following factors: (l) SSA's contradictory conclusion that Glenn could not work; (2) MetLife's focus upon a single physician report which favored their position while ignoring other, more detailed reports; (3) MetLife neglecting to provide their experts with all relevant physician reports; and (4) MetLife's disregard of evidence demonstrating aggravation of Glenn's condition by stress.17 MetLife sought and obtained certiorari regarding existence of conflict of interest for dual-role plan administrators. 18 The United States Supreme Court also considered Solicitor General's request to consider how any such a conflict should be taken into account and affirmed.19 In its holding, Court applied principles from Firestone Tire O Rubber Co. v. Bruch which similarly entailed an entity that both evaluated claim validity and paid benefits.20 Specifically, benefit denials in this context demand a deferential standard of review21 and if a benefit plan gives discretion to an administrator... who is operating under a conflict of interest, that conflict must be weighed as a factor in determining whether there is an abuse of discretion.22 The United States Supreme Court held that a conflict of interest exists when same entity serves as an ERISA plan administrator and payer of benefits.23 However, this conflict of interest serves as only one factor in deferential review of whether denial of claim constituted an abuse of discretion. …
Publication Year: 2010
Publication Date: 2010-01-01
Language: en
Type: article
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