What the case was about
Former employees sued under ERISA, the federal law that governs most employer-sponsored benefit plans, after their employer refused benefits it said the plan did not provide. The case reached the Supreme Court on one question: how much should a court defer to the plan’s own reading of its terms?
What the Court held
Looking to trust law, the Court held that a denial challenged under ERISA § 502(a)(1)(B) (29 U.S.C. § 1132(a)(1)(B)) is reviewed de novo unless the plan gives the administrator or fiduciary discretionary authority to determine eligibility or construe the plan’s terms. When the plan does grant that authority, a deferential standard applies. And if an administrator with discretion operates under a conflict of interest, the conflict must be weighed as a factor in deciding whether it abused that discretion.
Why it matters for life insurance claims
Most group life and AD&D coverage that comes through a job is part of an ERISA plan. Whether the plan or policy contains a discretionary clause often decides how hard it is to overturn a denial in court. Some states restrict discretionary clauses in insurance policies, so the policy language and the state that regulates it both matter.
Read the opinion
Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989), full text at Cornell’s Legal Information Institute. See also Metropolitan Life v. Glenn, which explained how the conflict factor works.
Not legal advice. This page summarizes general rules and the specific statutes cited. Your policy's wording, the state whose law applies, and whether the coverage came through an employer can all change the result. See the disclaimer and editorial policy.