Conflict of Interest

In Metropolitan Life Ins. Co. v. Glenn, 554 U.S. 105 (2008, the Supreme Court addressed the conflict of interest issue in the context of LTD plans governed by ERISA:

Often the entity that administers the plan, such as an employer or an insurance company, both determines whether an employee is eligible for benefits and pays benefits out of its own pocket. We here decide that this dual role creates a conflict of interest; that a reviewing court should consider that conflict as a factor in determining whether the plan administrator has abused its discretion in denying benefits; and that the significance of the factor will depend upon the circumstances of the particular case.

In Glenn,  the insurer encouraged Glenn to file for Social Security Disability, and even recommended a lawyer to help her in obtaining SSDI benefits.  Glenn was awarded SSDI benefits.  The insurer then collected the majority of her SSDI benefits as an alleged overpayment.  Despite having encouraged Glenn to apply for SSDI benefits, and then having collected an overpayment when her claim was accepted, the insurer denied the LTD claim.  In other words, the insurer disregarded SSA’s finding of disability. The Court found that, in these circumstances, there was nothing improper in concluding that the insurer’s conflict of interest tipped the balance in favor of finding that the denial of benefits was arbitrary and capricious. Glenn, 554 U.S. at 117-118.

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About tngadisabilitylawyer
Disability Lawyer in Tennessee and Georgia.

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