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The Wagner Law Group Description 

The Wagner Law Group, A Professional Corporation, is a nationally recognized ERISA & employee benefits, estate planning, employment, labor & human resources practice. 


Established in 1996, The Wagner Law Group has 23 attorneys engaged exclusively in employee benefits, estate planning and employment law. Seven of our attorneys are AV rated by Martindale-Hubbell as having very high to preeminent legal abilities and ethical standards. The firm is among the largest ERISA boutiques in the country. Our practice is national in scope, with clients in more than 40 states and several foreign countries.



Contact Info

The Wagner Law Group


  Integrity | Excellence


Massachusetts Office 

Tel: (617) 357-5200 

Fax: (617) 357-5250 

99 Summer Street 

13th Floor

Boston, MA 02110

Florida Office 

Tel: (561) 293-3590
Fax: (561) 293-3591
7108 Fairway Drive
Suite 125
Palm Beach Gardens, FL 33418


San Francisco Office

Tel: (415) 625-0002

Fax: (415) 358-8300

315 Montgomery Street

Suite 904

San Francisco, CA 94104





August 29, 2013 

 State and Federal Law Alert


First Circuit Holds Clause in Disability Plan Contract Does Not Give Insurer Discretionary Authority


In Gross v. Sun Life Assurance Company of Canada, the First Circuit Court of Appeals held that a so-called "satisfactory to us" clause contained in a plan's long term disability ("LTD") insurance contract was not sufficient to give the plan's insurer the discretionary authority that would justify a deferential judicial review of the insurer's decision to deny benefit payments.


In the First Circuit, the default standard of review for benefit denials in an ERISA-covered plan is a de novo review, which means that a court will independently review a claim and not defer to the plan administrator's, or insurer's, decision. However, if the plan document (or insurance contract) grants discretionary authority to determine benefit entitlement, the court applies a less demanding arbitrary and capricious standard of review, which means that the plan's or insurer's decision will be upheld unless it is determined to be arbitrary and capricious.


An employee was placed on disability leave and proceeded to apply for long term disability benefits. The insurer denied the claim, asserting that it found "insufficient objective evidence to substantiate" that she had a disability.


The First Circuit first ruled that the LTD coverage was part of an ERISA-covered plan, even though the employer did not contribute towards LTD coverage. The court found that the employer had established and maintained the plan to provide multiple types of benefits to its employees, treated its various benefit programs, including LTD coverage, as a "unit," and provided unified benefit communications to employees.


The insurer maintained that it was entitled to the arbitrary and capricious review standard because the insurance contract said that "benefits are payable when [the insurer] receives satisfactory proof of claim." However, the court noted that several other Circuits had ruled that this type of "satisfactory to us" language was insufficient to confer discretion onto the plan or insurer.


Breaking with its prior decisions, the First Circuit first noted that the grant of discretionary authority had to be clearly reflected in the plan documents or contracts. It then ruled that the "satisfactory to us" language was not sufficient for purposes of shifting to the arbitrary and capricious standard because the language lacked sufficient clarity that the plan, and insurer, had discretionary authority.


The First Circuit then remanded the case to the lower court for further consideration consistent with its ruling. 


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