Regulating ERISA Claims Procedures: New Rules for Handling Benefit Claims

The chances of defeating most ERISA lawsuits can be greatly enhanced by effective use of the plan’s ERISA-required claims procedures. Effective utilization means

• Making sure that the plan invokes the abuse of discretion standard of review to the fullest possible extent by explicitly giving the fiduciaries deciding claims the discretion to interpret the plan, the facts, and applicable law (recognizing, of course, that courts may limit that discretion only to plan interpretations), and by stating that claim decisions are to be reviewed only under the abuse of discretion standard.
• Following the plan’s claims procedure, so as to avoid procedural impropriety disputes that might undercut the finality of the claims decision or preclude it from being afforded deference.