In Firestone v. Bruch, the Supreme Court established a de novo standard as the presumed judicial standard of review in benefit denial cases unless the benefit plan gives the administrator or fiduciary discretionary authority to determine the eligibility for benefits or to construe the terms of the plan. De novo review gives no weight to the decision of the administrator. This allows the court to substitute its decision for that of the administrator.
In a recent decision, the U.S. District Court for the District of Columbia held that a clause within a summary plan description (SPD) was insufficient to establish whether a plan administrator's decision denying benefits to a health insurance plan participant was entitled to deference (Zalduondo v. Aetna Life Insurance Co., D.D.C., No. 1:10-cv-01685-RCL, 4/25/13.)
In the Aetna case, a participant filed a lawsuit after Aetna Life Insurance Co. denied the participant's claim seeking coverage for her hip arthroscopy surgery at Aetna's in-network rate. Aetna moved for summary judgment on the basis that its decision denying the in-network benefits to the participant was entitled to deference under the plan's SPD.
In accordance with the Supreme Court's decision in Cigna Corp. v. Amara, the court determined that the SPD's terms did not constitute the terms of the plan. In its decision, the court examined the SPD and determined that the SPD's disclaimer clarified that the plan's terms controlled over the SPD. Although the terms of the SPD provided the plan administrator with the authority to construe plan terms and determine benefit eligibility, there was no indication that the plan also conferred discretion to Aetna. Accordingly, the court held that the language in the SPD was insufficient to give the plan administrator's benefit denial decision deference.
Read the full text of the opinion.