Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...
Metropolitan Life Insurance Co. didn’t abuse its discretion by denying $431,000 in life insurance benefits to the widower of a Southwest Airlines’ flight attendant ( Crawford v. Metro. Life Ins. Co. , 2017 BL 288634, N.D. Tex., No. 3:16-cv-02402, 8/17/17 ).
MetLife’s decision to deny the widower’s claim for benefits wasn’t arbitrary or capricious because the last valid beneficiary designation on file was for the decedent’s great-nephew, Judge Jane J. Boyle of the U.S. District Court for the Northern District of Texas held Aug. 17.
Boyle rejected the widower’s argument that his wife’s designation of her great-nephew was invalidated because of a change in the plan terms that took effect in 2013. Boyle agreed with MetLife’s interpretation that stating in the summary plan description that paper designation forms would no longer be accepted didn’t mean that previous paper forms were invalid.
The widower argued that MetLife failed to include a provision informing employees that designations made before 2013 would remain valid. If MetLife had included an additional sentence indicating that paper designations before 2013 would remain valid, any ambiguity would be resolved, he said.
Boyle’s decision is significant because it rejects the argument that plan administrators must include specific information in summary plan descriptions to avoid ambiguities. Boyle reasoned that if the widower’s logic was accepted, then any plaintiff could reject an administrator’s interpretation by arguing that the SPD is ambiguous because it lacks a sentence explaining the administrator’s exact interpretation.
Jessica S. Taylor and Kelly Durham & Pittard LLP represent the widower. Estes Okon Thorne & Carr PLLC represents MetLife.
To contact the reporter on this story: Carmen Castro-Pagan in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Jo-el J. Meyer at email@example.com
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)