Administrator’s “Discretionary authority” to decide claims


Most disability plans, and other employee benefit plans, give the insurance company “discretionary authority” to determine whether an employee is disabled.  Typically, the plan will say something like:  “The Plan Administrator [i.e. the insurance company] has the sole discretionary authority to determine eligibility, entitlement to benefits, and to construe the terms of the Plan.”

When the plan gives “discretionary authority,” the judge hearing the case has to find the insurance company “abused its discretion” before she can award you benefits.  This is a much tougher burden of proof than the normal “preponderance of the evidence” standard in most civil cases.  For example, even if your doctors all agree that you are disabled, the insurance company can “exercise its discretion” to give more weight to the “board certified” doctors it used during the administrative appeal.

Although the insurance company has the benefit of this tough burden of proof, if the insurance company operated under a conflict of interest, the judge can consider that as a factor in determining whether the insurance company abused its discretion.  In other words, if the insurance company both decides whether to pay a claim, and then pays claims it approves, you might be able to show that this conflict of interest influenced the insurance company’s decision.  This can help you to better prove your case. 

In some cases the Summary Plan Description --- a document that summarizes your benefits that ERISA requires your employer to give you --- doesn’t say the same thing as other plan documents.  In those cases, which don’t arise all that often, you may be able to prevent the abuse of discretion standard from applying.  It is important that your attorney know how to review all the relevant documents to make sure your rights are fully protected.  In his years of being an ERISA and insurance lawyer, Patrick has reviewed numerous Summary Plan Descriptions, so contact him if you have questions about your ERISA claim. 


Erisa plans usually give the insurance company “discretionary authority” to decide claims for benefits --- To Make it easier for them to deny claims

Insurance plans, like long term disability plans, are often long and full of insurance and legal jargon. 

If you have questions about whether your insurance company has “discretionary authority” to review your claim, or if you have other questions about your plan’s language, contact Patrick for help understanding the insurance plan’s language. 

The information on this website is intended to be informational only and does not establish an attorney/client

relationship, nor is it meant to give or be legal advice for a specific matter.  Please do not email or fax information to

Patrick Mause without first speaking or meeting with him because the information will not establish an attorney/client

relationship and may not be kept confidential. Patrick Mause is a lawyer admitted to practice only in Arizona, the Arizona

District Courts, and the Ninth Circuit Court of Appeals.  His office is located at 290 North Meyer, Tucson, Arizona 85701.