ERISA-Fourth Circuit Finds That Plan Does Not Give Plan Administrator Discretion, So De Novo Review Of Benefit Denial Is Required

In Cosey v. The Prudential Insurance Company of America, No. 12-2360 (4th Cir. 2013), the Court considered the question of whether a long-term disability plan, which is subject to ERISA, unambiguously confers discretionary decision-making authority on the plan administrator, who is Prudential, requiring judicial review of the administrator’s decision making authority under the abuse of discretion standard.

The Court said that, upon its review, the plan language at issue is ambiguous and does not clearly confer discretionary decision-making authority on Prudential, the plan administrator. Therefore, it held that Prudential’s eligibility determinations denying benefits to a covered employee are subject to de novo judicial review.

The language at issue? The plan states that benefits only will be paid to a claimant who “submit[s] proof of continuing disability satisfactory to Prudential”.

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