Over the last few weeks, we've discussed “the good of ERISA.” However, now it's time to tackle all of the unfairness of ERISA, and there exists a lot of unfairness with ERISA.
The third unfair aspect of ERISA is the standard of review used in ERISA cases. In other types of cases, if a person is able to prove that they are right, then they win. However, with ERISA, if discretion is reserved in the plan, just proving you're right is not enough.
When discretion is reserved in the plan, that means that a court has to give deference to any factual determinations made as well as any plan interpretation issues that might arise. Giving deference means that the court does not overturn the decision of the insurance company or the plan administration unless that decision is both wrong AND it has no reasonable basis to it. In other words, the court finds that the decision is arbitrary. They call it the arbitrary and capricious standard of review, meaning that it is a decision without any logical or reasonable basis.
If you need assistance after your ERISA long term disability, short term disability, pension, retirement, or life insurance claim has been denied, contact an experienced ERISA disability attorney today at 800-284-9309.