Montana Auditor Files Brief for Consumers

Montana State Auditor John Morrison recently filed a “friend of the court” brief in a United States Supreme Court case involving worker rights under group health and disability insurance. The brief was filed on behalf of the National Association of Insurance Commissioners at Morrison’s request.

The Supreme Court agreed to hear the case -- Met Life v. Wanda Glen -- to address a question that has divided the U.S. courts of appeal: whether insurance companies that deny group health or disability insurance claims should be given deference by courts reviewing the claim denial, or whether such insurers are operating under a "conflict of interest" that precludes deference. The issue involves interpretation of the expansive and complicated federal law known as ERISA.

"Our position is that insurance companies evaluating claims that they will have to pay always have a conflict of interest," Morrison said. "Their denials definitely should not be given more weight than the evidence of workers and their employers that claims should be paid."

Glenn was an injured worker who filed for benefits under her employer-sponsored disability income insurance plan. The plan contained a "discretionary clause" that has been construed as creating a presumption that the insurer's claim denial was correct.

The case raises questions related closely to the discretionary clause issues decided by U.S. District Judge Donald Molloy recently in Standard Insurance v. Morrison. The Standard case involved the authority of the insurance commissioner to remove the discretionary clauses that create the presumption in favor of an insurer that denies a claim. The Met Life case asks whether, when the discretionary clause has not been removed by an insurance commissioner, the presumption should still be given at all to insurance companies that have a conflict of interest because they are both deciding and paying claims.

ERISA law professor Mark Debofsky of Chicago said the insurance commissioner brief should be given great weight by the high Court. "I think the Court will be very interested in what the nation's insurance regulators say on this issue," he said. "It's a strong brief that addresses an issue that affects millions of Americans."

Briefing in the case should be completed soon and the case may be argued this year.