July 14, 2008
Supreme Court Cites Inherent Conflict of Interest Issues in Self Funded Plans --
Employers Should Consider Reviewing Procedures Immediately
Any employer who sponsors a self funded benefit plan (including medical, disability, or life ) should take note of this recent ruling.
A United States Supreme Court decision issued in June increased the litigation risk for sponsors of self funded plans. On June 19, 2008, the Court announced its holding in Metropolitan Life Insurance Company v. Glenn. The case reinforced the conflict of interest factor that courts will consider in any review of a denied benefit claim.
Self funded plans at risk:
life insurance plans
Based on the recent reemphasis on the conflict of interest issue that will now run through the Courts of Appeals and Federal District Courts, and the possible severe result on plan sponsors of self insured plans, we have examined many clients' claims procedures inside their employee benefit plans. Whether the claims procedures are written by the employer or a third party administrator, we have found that claims procedures are lacking in the specific identification of the fiduciaries making the decisions, as well as other operational shortcomings that could lead to liability.
We have developed strategies to align claims and appeals procedures within the controlling Department of Labor requirements, as well as provide litigation defense to challenges to claims processing based on conflict of interest.
Please contact attorney Christopher P. Siegle, email@example.com, (602) 440-4862 for information that can help you to control risk in employee benefit plan administration.