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How Much Deference Should a Court Give an ERISA Plan Administrators Late Claim Decision?

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How Much Deference Should a Court Give an ERISA Plan Administrators Late Claim Decision?

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As a sponsor of an ERISA-covered plan, especially of a self-funded employee welfare benefit plan, an employer wants benefit claim decisions to be afforded the highest degree of deference from the court when those decisions are litigated. In order to obtain such deferential treatment, employers are counseled to ensure – among other things – that claim decisions are made in accordance with ERISA regulations and are based solely on plan terms and in the absence conflicts of interest. In general, courts afford claim decisions the highest degree of deference when • plan documents explicitly reserve full discretion to the administrator, • relevant plan terms are unambiguous, and • the claim administrator has no conflict of interest and has complied with ERISA’s claim processing regulations. But what happens when a claim administrator does not adhere to ERISA’s claim-processing timing rules? To answer this question, it is helpful to consider the standards by which courts review plan administr

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