According to a recent 6-3 decision by the U.S. Supreme Court, insurance companies or employers that both decide claims under employee benefits plans and pay those benefits have a conflict of interest that must be considered by judges in disputes.
In addition, the court said that an apparent conflict of interest is only one of many factors a reviewing judge must consider.
The ruling came in the case of MetLife v. Glenn, in which an Ohio woman diagnosed with a severe heart condition received disability benefits from MetLife for two years, only to have her claims denied in 2003.
The denial was upheld by a federal judge and later reversed by the Sixth U.S. Circuit Court of Appeals.
The Employee Retirement Income Security Act of 1974 (ERISA) authorized insurers to both evaluate and pay claims and authorized employees to file a federal lawsuit should they feel their benefits were unfairly denied. ERISA does not, however, set a clear standard for judges called upon to decide disputes over benefits.
The ruling in MetLife v. Glenn now offers guidance to federal judges presiding over lawsuits challenging medical disability and health insurance determinations in group policies.
