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Court clarifies standards for denial of disability benefits

In a ruling Thursday, it guides federal judges to weigh conflicts of interest by insurance companies.

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Judges must approach medical disability and health insurance disputes with a skeptical eye when they involve insurance companies that both evaluate and pay employee claims.

In a 6 to 3 decision announced Thursday, the US Supreme Court ruled that benefit denials by such companies must be examined with caution when circumstances suggest a high likelihood that financial considerations affected a benefits decision.

The court added that an apparent conflict of interest is only one of many factors that a reviewing judge must consider.

The ruling is important because it offers guidance to federal judges presiding over lawsuits challenging medical disability and health insurance determinations in group policies.

"When judges review the lawfulness of benefit denials, they will often take account of several different considerations of which a conflict of interest is one," writes Justice Stephen Breyer in the majority opinion.

The decision, in Metlife v. Glenn, comes in the case of an Ohio woman diagnosed with a severe heart condition, who had her disability benefits withdrawn by the Metropolitan Life Insurance Co.

A federal judge upheld the denial of benefits, but the Sixth US Circuit Court of Appeals reversed that finding, ruling that the judge had not fully considered the impact of MetLife's potential conflict of interest in both administering the plan and deciding which claims to pay and which to deny.

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