## Facts

- Sears maintained an ERISA-governed long-term disability (LTD) plan that granted Metropolitan Life Insurance Co. (MetLife) discretionary authority to decide benefit claims and required MetLife to pay approved claims.
- Wanda Glenn, a Sears employee, developed a serious heart condition and received an initial 24 months of LTD benefits under the plan’s “own occupation” standard.
- MetLife encouraged Glenn to apply for Social Security disability benefits; the Social Security Administration found her unable to perform any work and awarded benefits.
- The plan allowed MetLife to offset LTD payments by the amount of Social Security benefits, reducing MetLife’s financial exposure.
- To continue LTD benefits beyond 24 months, Glenn had to satisfy a stricter “any gainful occupation” standard.
- MetLife reevaluated the claim, concluded Glenn could perform sedentary work, and denied extended LTD benefits notwithstanding the Social Security disability determination.
- Glenn exhausted internal review and sued under ERISA § 502(a)(1)(B) to recover benefits allegedly due under the plan.

## Issues

1. Whether an ERISA plan administrator that both evaluates claims and pays benefits operates under a conflict of interest when denying benefits.
2. How such a conflict should be considered when reviewing a discretionary benefits denial under Firestone’s abuse-of-discretion standard.

## Decision

- The Supreme Court held that an administrator that both determines eligibility and pays benefits operates under a conflict of interest.
- The Court held that the conflict does not alter the standard of review from deferential to de novo; it is weighed as a factor in deciding whether there was an abuse of discretion.
- The Court affirmed the Sixth Circuit’s judgment setting aside MetLife’s denial, concluding it was permissible to weigh the structural conflict together with other circumstances (including MetLife’s handling of the Social Security award and the record evidence).

## Legal Principles

- Under ERISA, when a plan grants an administrator discretionary authority to determine benefit eligibility, courts generally review benefit denials for abuse of discretion.
- When the same entity both decides claims and pays benefits, the arrangement creates a structural conflict of interest.
- The conflict is not dispositive and does not trigger special procedural rules; it is one factor within a context-specific, combination-of-factors analysis.
- The conflict carries more weight when circumstances indicate a higher likelihood it affected the decision (e.g., indications of biased administration) and less weight when the administrator takes steps to reduce bias (e.g., separating claims personnel from financial incentives).
- An administrator’s inconsistent treatment of evidence—such as encouraging a claimant to pursue Social Security disability benefits yet failing to explain disagreement with the agency’s disability finding—may support a finding of abuse of discretion when considered with the conflict and the record as a whole.

## Conclusion

A plan administrator’s dual role as claims decider and benefit payer creates a conflict of interest that courts must consider as a factor, alongside other case-specific evidence, when applying deferential abuse-of-discretion review to an ERISA benefits denial.


Metropolitan Life Ins. Co. v. Glenn, 554 U.S. 105 (2008)