Adam V. Russo | July 9, 2010

Sandra Chronister was employed as a nurse at Baptist Health in Arkansas. In 1995, she was injured in a car accident, and thereafter sought disability benefits under Baptist Health’s long-term disability plan, which was insured and administered by Unum Life Insurance Co. of America. Unum initially granted her application for disability benefits. At Unum’s urging, Chronister also applied for, and received, social security disability benefits. After twenty-four months, however, Unum informed Chronister that it was terminating her benefits under the “self-reported symptoms” limitation of the plan. Chronister exhausted her administrative remedies and then brought suit. The Eastern District of Arkansas ultimately determined that substantial evidence did not support Unum’s decision to deny Chronister benefits based on the self-reported symptoms limitation. The district court remanded the matter to Unum with directions to reopen the administrative record and make a new determination. (more…)

Category: 8th, Conflict of Interest, MetLife v. Glenn, Standings | No Comments »
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Adam V. Russo | July 9, 2010

In light of the Supreme Court’s decision in Glenn, the Second Circuit has reassessed its standard of review governing cases that challenge an ERISA plan administrator’s decision to deny disability benefits in cases where the administrator has a conflict of interest because it has the discretionary authority to determine the validity of the employee’s claim and pays the benefits under the policy. In McCauley, the Second Circuit abandoned its prior standard of review, which allowed courts to review de novo the administrator’s decision when it is shown that a conflict of interest actually influenced that decision, and adopted the Glenn standard that such a conflict of interest is to be “weighed as a factor in determining whether there was an abuse of discretion.” (more…)

Category: 2nd, Claims Procedures, Claims Review, Conflict of Interest, MetLife v. Glenn | No Comments »
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Adam V. Russo | January 29, 2010

January 22, 2010 (PLANSPONSOR.com) – A federal court has refused to dismiss a claim by a Jersey Construction employee that he was fired for pursuing health benefits for his wife’s chemotherapy.

The U.S. District Court for the District of New Jersey said it found that Christian Pailleret stated sufficient facts to support a prima facie case under § 510 of the Employee Retirement Income Security Act (ERISA). The court said Pailleret had no “smoking gun” evidence of intent, but the fact that almost immediately after he submitted medical claims of tens of thousands of dollars, he was assigned low-level and “degrading” tasks and shortly after that was terminated without notice or explanation was sufficient to show a plausible claim and “to thus unlock the doors of discovery.” (more…)

Category: 3rd, Claims Procedures, Conflict of Interest, Federal Circuits, New Jersey | No Comments »
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Adam V. Russo | August 19, 2009

The number of cases that apply the Supreme Court’s opinion in Metropolitan Life Insurance Company v. Glenn, 128 S. Ct. 2343 (2008) , when reviewing a decision to deny employee benefits by an administrator with a conflict of interest, continue to grow. The most recent example is Raybourne v. Cigna Life Insurance Company of New York, No. 08-2754 (7th Cir. 2009), where the plaintiff was a participant in his employer’s long-term disability benefits plan. (more…)

Category: 7th, Conflict of Interest, ERISA, MetLife v. Glenn | No Comments »
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Adam V. Russo | May 13, 2009

The Ninth Circuit provided significant guidance for the district court to consider regarding a conflict of interest involving self-funded plans in Burke w. Pitney Bowes Inc. Long-Term Disability Plan 544 F.3d 1016 (9th Cir. 2008). While the district court ruled in favor of the plan, it reached its decision prior to the Supreme Court’s decision in Glenn. The Ninth Circuit therefore remanded the matter for the district court to consider the potential conflict of interest in light of Glenn. In doing so, the court rejected the proposition that a structural conflict of interest cannot exist where a plan is self-funded, with benefits paid out of trust. The court held that even when benefits are paid out of a trust, instead of directly by an employer, the employer has a financial incentive to deny claims because every dollar not paid in benefits is a dollar that will not need to be contributed to fund the Trust. The court explained: “although there is no dollar-for-dollar correlation, it still remains true that the more that the Trust pays out in benefits, the more the plan must contribute to maintain the Trust’s solvency.”

Category: 9th, Conflict of Interest | No Comments »
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