ERISA Remand for a Full and Fair Review Is Not A Final Decision

A district court’s order remanding an employee benefits case to plan administrator to conduct a full and fair review is not a final decision. The Tenth Circuit held in an ERISA case, Metzger v. Unum Life Insurance Co., 476 F.3d 1161 (10th Cir. 2007), that under the facts of this case, the district court’s order remanding a case to a plan administrator to conduct a “full and fair review” was not final because the district court had not issued a final judgment disposing of all issues in the case or certified its order granting partial summary judgment as a final order. The Tenth Circuit noted in a footnote that the Circuit Courts are split on whether an order remanding a matter to an ERISA plan administrator is final. 

ERISA Documents Relied on for Benefit Determination - When They Must Be Provided

During an administrative appeal of a denial of plan benefits, a plan administrator must provide to claimant documents relied upon during the initial benefit determination but is not required to provide any additional documents considered during the appeal if the documents do not contain new factual information. The Tenth Circuit in Metzger v. Unum Life Insurance Co., 476 F.3d 1161 (10th Cir. 2007), based its decision on the court’s interpretation of 29 C.F.R. § 2560.503-1(h)(2)(iii). The court stated that subsection (h)(2)(iii) requires a plan administrator to produce only those documents relied upon during the initial benefit determination and not the documents generated during the appeal process. If, however, the documents generated during that appeal contain new factual information, they must be provided to the plaintiff. The court reasoned that any other interpretation of subsection (h)(2)(iii) would permit the claimant to submit additional rebuttal documents during the appeal, which was not the intent of the regulations where no new facts were considered during the appeal. The court noted that its conclusion was consistent with the regulations because, in cases where a medical judgment is involved, subsection (h)(3)(iii) requires the plan administrator to consult with a health care profession. If the plan administrator were required to produce these documents prior to reaching a final decision on the appeal, the plaintiff would then be permitted to submit rebuttal expert reports, thereby creating an unnecessary cycle of submission, review, re-submission and re-review.

ERISA Sliding Scale Standard of Review When Insurer Also Is Plan Administrator

When an ERISA defendant is both the insurer and plan administrator, the court will apply a less deferential standard of review to a plan administrators’ decision.  Due to the conflict of interest, courts apply a sliding scale decreased level of deference to the arbitrary and capricious standard. In Loughray v. Hartford Group Life Ins., No. 05-CV-01450-CBS-BNB (D. Colo. Apr. 2, 2007), Magistrate Judge Shaffer carefully and thoroughly analyzed the standard of review to be applied to an administrator’s denial of benefits and provides a detailed review of how to apply the standard. The court held that the standard of review to be applied to the conflicted defendant insurance company’s denial of benefits would be the “sliding scale” approach employing the arbitrary and capricious standard of review with a decreased level of deference given to the administrator’s decision in proportion to the seriousness of the conflict. The court found that the insurance company, Hartford, was conflicted because it served as both an insurer and plan administrator. Under the sliding scale approach, the court shifted the burden to Hartford “to establish that its interpretation of the terms of the plan is reasonable and its application of the terms of the plan is supported by substantial evidence.” The court defined substantial evidence as “such evidence that a reasonable mind might accept as adequate to support the” conclusion reached by the decision maker. The court noted that a lack of substantial evidence often indicates that the decision was arbitrary and capricious. After carefully reviewing the record, the court found that Hartford’s denial of benefits was not arbitrary and capricious. This decision provides an excellent analysis of how to apply the standard of review.