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. The plaintiff had been receiving long-term disability benefits under the plan but the defendant determined that the plaintiff no longer qualified for the benefits since the plaintiff could no longer meet the plan’s definition of disability.

The defendant had the discretionary authority to determine eligibility for benefits. The plaintiff sued the defendant to reinstate the benefits and the question before the Court was the appropriate standard of review under ERISA based on the Glenn decision.

The Court found that due to the defendant’s discretion under the plan to determine benefit eligibility the Court must apply the abuse of discretion standard when reviewing the defendant’s decision to terminate the benefits.

When applying this standard, as required by Glenn, the Court must take into account the structural conflict of interest that exists because the defendant both determines eligibility for benefits and pays any benefits which are awarded. A structural conflict is one factor among many that are relevant in the abuse of discretion analysis, including whether the decision maker overemphasized medical reports that favored its decision and whether it gave its medical examiners all of the relevant evidence.

Glenn emphasizes that a court should give additional weight to a structural conflict where the decision maker has a history of biased claim administration or helped a claimant obtain a social security award it then disregarded. The Court found that the district court had given only cursory treatment of Glenn, and remanded the case back to the district court to consider the impact of the structural conflict of interest on the defendant’s decision to terminate the benefits.

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This entry was posted by Adam V. Russo on Wednesday, August 19th, 2009 at 8:24 am and is filed under 7th, Conflict of Interest, ERISA, MetLife v. Glenn. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.