Certiorari Granted
The Supreme Court will be granting certiorari to MetLife, et al., v. Wanda Glenn. While MetLife v. Glenn reinforces a third party administrator’s (”TPA”) right to make administrative decisions and interpret the terms of benefit plans when it is not the party funding the plan, this case asks whether a Plan Administrator faces a conflict of interest if it not only determines whether a claim is payable, but also pays the claim with its own funds.
Wanda Glenn filed for disability benefits with her health benefits Plan, funded and administered by MetLife, as a result of a severe heart condition. About two years later, an administrative law judge found that Glenn was disabled and was also entitled to Social Security (”SSDB”) benefits. Glenn was re-evaluated by her health insurance carrier, MetLife, which determined that her condition was stable and she was able to perform full time sedentary work. MetLife then ceased payment of benefits. Wanda Glenn appealed.
On June 8, 2005, The United States District Court for the Southern District of Ohio enforced MetLife’s decision to terminate Glenn’s benefits. Because MetLife reserved for itself in writing discretionary authority to interpret the terms of the plan and administer the plan, the court applied a deferential standard of review. The court could only reverse MetLife’s decision if the decision was arbitrary or capricious. Thus, so long as there was some evidence supporting MetLife’s decision, evidence contrary to that decision would be ignored.
On September 1, 2006, Glenn’s physician notes, which were overlooked in the initial ruling, were presented to the United Stated Court of Appeals for the Sixth Circuit. The notes provided evidence that stress from occupational duties could factor into worsening Glenn’s condition. The court determined that MetLife, as both administrator of the plan and payer of claims, faced a conflict of interest. As such, the proper standard of review to be applied to its decision was one of de novo review, where the court balances the evidence for itself. The court thereby reversed the initial decision, ruled against MetLife, and reinstated Glenn’s benefits.
The Supreme Court will now decide (1) whether an administrator that both evaluates and pays claims under a plan governed by the Employee Retirement Income Security Act (ERISA) is operating under a conflict of interest that must be weighed on judicial review of a benefit determination, and (2) whether an ERISA plan administrator must consider in its written benefit determination a decision of a Social Security Administration administrative law judge granting disability benefits. To read the entire appellate ruling CLICK HERE
