The Patient Protection and Affordable Care Act, Discretionary Clauses, and Judicial Review of ERISA Plan Administrator Decisions

Note from the Digital Editor: In order to highlight the high-level of research and scholarship from the authors who have published in the William & Mary Policy Review’s peer-reviewed print journal, we have reproduced the abstracts from Volume 2, Issue 1 along with a link to an electronic copy of the full form of the piece. 

Since the Supreme Court’s Firestone decision, ERISA plan administrators have enjoyed broad discretion and deferential review in benefits claims litigation. Language in Firestone that offered discretion and deference in exchange for a simple discretionary clause led, in time, to attempts by various state insurance commissioners to limit or ban the use of discretionary clauses on the ground that they often lead to unjust outcomes for plan participants. Various state efforts to inject a degree of fairness into the benefits denial review process have been met with preemption challenges, however. This article contrasts the Court‘s consistent support for discretionary clauses with the thus-far unanimous support of the federal courts of appeal for the position that states can ban or limit the use of such clauses without running afoul of ERISA’s broad preemption language. This paper also evaluates the PPACA’s requirement of universal and independent external review and suggests that, at least in the near term, the contested terrain of discretionary clauses will not change significantly.

Find the full version of this article in PDF form here.

Maria O’Brien Hylton is a Professor of Law at Boston University School of Law.