Employee Retirement Income Security Act

The Employee Retirement Income Security Act, otherwise known as ERISA provides for insurance benefits that are vital to claimants and their families.  An ERISA claim denial means that the claimant did not receive the medical treatment, disability income, life insurance or retirement benefits that the claimant expected under the plan.  A medical benefit denial can mean the difference between life and death as was seen in the case styled, Conway v. Louisiana Health Service & Indemnity Co. d/b/a Blue Cross Blue Shield.

The Federal Courts give deference to the decisions of the plan administrators in insurance plans governed by ERISA.  The Fifth Circuit Court of Appeals recently described the power of ERISA judicial deference this way:

As any sports fan dismayed that instant replay did not overturn a blown call learns, it is difficult to overcome a deferential standard of review.  The deferential standard
of review our court applies to ERISA decisions often determines the outcome of disputes that are far more important than a sporting event: decisions made by
retirement and health plans during some of life’s most difficult times, as this case
involving a teenager with a serious eating disorder demonstrates.
For Texans and others living within the jurisdiction of the Fifth Circuit, there are two factors that determine whether or not a final denial on an ERISA claim is entitled to judicial deference: 1) when the plan terms grant discretion to the claims decision maker, deference is required when the claim denial hinges upon interpretation, and 2) the 1991, Fifth Circuit opinion, Pierre v. Connecticut General Life Insurance Company / Life Insurance Company of North America, providing that factual determinations by ERISA fiduciaries must always be afforded judicial deference.
Since other federal circuits have not followed the reasoning of Pierre, instead holding that factual determinations by fiduciaries should not automatically receive deference, the Fifth Circuit is now questioning whether Pierre should be modified or gotten rid of.  In a rare mood of uncertainty, the Fifth Circuit notes that there is ow “robust case law” that indicates that its decision in Pierre was wrong.
The next few posts here will focus on what the courts may do going forward.


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