GETTING
"ABUSE OF DISCRETION
"STANDARD FOR REVIEW
OF HEALTH PLAN DECISIONS UNDER INGRAM V. MARTIN MARIETTA
In Ingram v. Martin Marietta Long Term Disability Income Plan, etc. 01 CDOS 2728 (2001), the Ninth Circuit was asked to review the granting of summary judgment in favor of an ERISA plan in a disability benefits case. To determine whether the Ninth Circuit would review the plan administrator's decision de novo or only for abuse of discretion by the administrator, the Ninth Circuit analyzed that part of the plan language describing whom had authority to make benefit decisions.
Because the use of the abuse of discretion standard required the plan to show that there was unambiguous plan language providing discretionary authority to the plan administrator, the Ninth Circuit held that the plan language before it was ambiguous in that it did not state how benefit determination are made, that the insurer was allocated decision-making authority, and did not state whether the decisions by the insurer was discretionary.
Noting that past Ninth Circuit decisions applied the abuse of discretion standard in reviewing plan administrator decisions where the plan language used the term "discretion" in describing the administrator's authority, the Ninth Circuit indicated that use of the phrase "the plan administrator has discretionary authority to grant or deny benefits under this plan" in the plan would allow courts to review benefit decisions under the abuse of discretion standard. Failure to use this language will invite de novo review instead.
