Insurer's Interpretation of Plan Language Concerning What Constitutes Working as a Full-Time Employee Was Arbitrary and Capricious

In Weber v. GE Group Life Assurance Co., 541 F.3d 1002 (10th Cir. 2008), the Tenth Circuit reversed an insurer’s denial of life insurance benefits holding that it’s interpretation of the plan was arbitrary and capricious. In this case, a full-time employee signed up for life insurance and then was unable to work full time, dying approximately two weeks later.   The insurer denied life insurance benefits concluding that the deceased did not meet the definition of an “eligible employee” because she had not worked at least thirty-hours after signing up for benefits. The plan defined an eligible employee as, among other things, someone who regularly works at least 30 hours per week. Applying the sliding-scale arbitrary and capricious standard of review applicable where the insurer also is the plan administrator, the Court held that since the employee had regularly worked 40 hours prior to signing up for insurance, she met the requirements of regularly working 30 hours.