The U.S. Supreme Court has ruled on the level of scrutiny courts must apply when an employee challenges a denial of benefits and the plan administrator, whether the employer or an insurance company, played the dual role of determining whether the employee was eligible for benefits and paying benefits out of its own pocket.1 The Court decided that the dual role is a conflict of interest under the federal Employee Retirement Income Security Act (ERISA), and a court must consider that conflict—which raises the possibility that financial considerations influenced the benefits decision—in determining whether the administrator abused its discretion when denying the benefits.
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1Metropolitan Life Ins. Co. v. Glenn, U.S. Supreme Court No. 06-923, 2008