A recent Supreme Court decision will likely lead to more approvals of health insurance claims submitted by employees and more litigation over those claims that are denied, a legal scholar concludes in a Health Affairs web exclusive published today.
In its June 2008 decision Metropolitan Life Insurance (MetLife) v. Glenn, the Supreme Court recognized the conflict of interest that often faces plan administrators of the Employee Retirement Income Security Act (ERISA): Under ERISA, the plan administrator often both evaluates the claims made by employees and pays the claims it decides to approve. In MetLife, the Supreme Court made it easier for this conflict to be invoked in court by employees who sue the plan administrator to reverse denied claims. The case involved the denial of a disability claim by MetLife, the plan administrator for the disability benefits ERISA plan offered to Sears employees, but the rules announced by the court in its opinion apply to lawsuits over denials of claims for health benefits as well.
The MetLife decision “clarifies issues that have divided the lower federal courts,” writes Tim Jost, the Robert Willet Family Professor in the Washington and Lee University School of Law. “Insured and self-insured ERISA plans are indeed conflicted, and although their determinations are not to be retried by the federal courts [from scratch], the lower courts should not uphold determinations simply because they are not ‘off the wall.’” Read the abstract.
