Long Term Care Insurance News

In what is sure to be the most important Supreme Court decision in the area of long term disability claims in decades, the Court has agreed to hear the case of MetLife v. Glenn. The Court will decide whether or not the standard of review should be heightened when an ERISA insurance company is both the decider and payor of a claim. Although ERISA expressly grants federal courts jurisdiction to review the denial of employee benefits by a plan administrator or fiduciary, it does not specify what standard should govern that review. In an earlier case, the Supreme Court held that, if an administrator has been given discretion “to determine eligibility for benefits” under the terms of the benefit plan in question, federal courts can overturn eligibility determinations only if they find that the administrator has abused its discretion. In passing, the Court noted that such deferential abuse-of-discretion review might be more difficult to survive if the plan administrator’s objectivity were called into question: in a case involving “an administrator or fiduciary who is operating under a conflict of interest, that conflict must be weighed as a ‘facto[r] in determining whether there is an abuse of discretion.’”

In MetLife Insurance Co. v. Glenn, the Court will, after nearly twenty years, answer two fundamental questions that flow from Firestone’s brief reference to conflicts of interest: First, what constitutes such a conflict, or, more particularly with regard to the MetLife case, is such a conflict created when the same company both administers and funds a benefit plan? Second, when such a conflict does exist, how is it to be factored into a court’s review of an administrator’s denial of benefits?

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