Two types of potential conflicts can be alleged by a plaintiff, a structural conflict or a procedural conflict. “The structural inquiry focuses on the financial incentives created by the way the plan is organized, whereas the procedural inquiry focuses on how the administrator treated the particular claimant.” Post, 501 F.3d at 162.
A structural conflict arises when an entity “both determines whether an employee is eligible for benefits” and also pays benefits under the plan. Glenn, 128 S.Ct. at 2346. A procedural conflict involves the examination of “the process by which the administrator came to its decision to determine whether there is evidence of bias.” Post, 501 F.3d at 165 (citing Pinto, 214 F.3d at 393).
Kalp v. Life Ins. Co. of N. Am., 2009 U.S. Dist. LEXIS 7957 (W.D. Pa. Feb. 4, 2009)
In this dispute over long term disability benefits, the district court addressed the scope permissible discovery and the proper standard of review. Given the procedural irregularities found in the record, the court permitted rather extensive discovery beyond the administrative record.
In addition, the recent Supreme Court decision in MetLife v. Glenn forced the district court to consider that decision’s effect of Third Circuit’s use of a “sliding scale” of heightened scrutiny where the plan fiduciary operated under a conflict of interest.