The Supreme Court recently issued a decision in Metlife v. Glenn, U.S., No. 06-923 where it considered: (1) whether a plan administrator has a conflict of interest when it both evaluates a claim for benefits and pays that benefit claim; and (2) how that conflict of interest should be taken into account by a court reviewing a discretionary benefit determination.
To answer the first question, the Court relied on its decision in Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989). The Court noted that in Firestone it held that a conflict of interest exists where the administrator “is the employer that both funds the plan and evaluates the claims” because “every dollar provided in benefits is a dollar spent by the employer; and every dollar saved is a dollar in the employer’s pocket.” Continue Reading The Supreme Court Upholds the Sixth Circuit in ERISA Conflict of Interest Case