Don’t miss this Sixth Circuit case–American Council of Life Insurers v. Ross–holding that ERISA does not preempt a Michigan state law which prohibits insurers from including the Firestone discretionary language in insurance policies. The case is particularly noteworthy because the court cites the Glenn case in support of its decision that the state law should not be preempted:

Finally, we observe that Glenn provides further support for holding that Michigan’s law is not preempted by ERISA. There, the Court reiterated that a conflict of interest exists when the same insurer is responsible for examining and paying a benefits claim. Glenn, 128 S. Ct. at 2348. In view of that conflict, Glenn determined that courts, in reviewing a benefits decision by an insurer who has discretion over assessing and paying benefits, may consider that conflict as a factor in deciding whether the plan administrators decision amounts to an abuse of discretion. Id. at 2351. If, as Glenn reaffirms, there is a conflict of interest when the same plan administrator decides the merits of a benefits plan and pays that claim, and if, as Glenn also holds, it is consistent with ERISA to account for that conflict of interest in reviewing a plan administrator’s decision, it is difficult to understand why a State should not be allowed to eliminate the potential for such a conflict of interest by prohibiting discretionary clauses in the first place.

Read about the Glenn case in previous posts which you can access here.