The rule that the plan documents, not the summary plan description, control usually works to the detriment of long-term disability claimants in disputes with ERISA administrators.
Not this time. The SPD clearly gave Prudential Insurance Company of America the sole discretion to determine eligibility for benefits. But the 4th U.S. Circuit Court of Appeals ruled Wednesday that no such language existed in the plan documents themselves. Worse for Prudential, the SPD language “demonstrates that Prudential knows how to draft language expressly reserving discretionary authority.”
The result in Woods v. Prudential is that the trial judge erred in reviewing the administrator’s denial of benefits under an abuse of discretion standard. The appellate court remanded the case for review de novo, a more favorable standard for the claimant.
By Alan Cooper