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E.D. Wis.: Attempting to take a bite out of the "arbitrary and capricious" standard

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  • E.D. Wis.: Attempting to take a bite out of the "arbitrary and capricious" standard

    In a case from the Eastern District of Wisconsin, the court considers how unambiguous plan exclusions are interpreted under the arbitrary and capricious standard.
    Absent fraud or bad faith, ERISA plans that vest the administrator with discretionary authority to construe the plan’s terms or determine benefit eligibility are reviewed under the arbitrary and capricious standard. Geiger v. Aetna Life Insurance Co., 845 F.3d 357, 362 (7th Cir. 2017.) In interpreting an ERISA plan, federal common law rules of contract interpretation apply. Neuma Inc. v. AMP, Inc., 259 F.3d 864, 873 (7th Cir. 2001). If a document governing an ERISA plan is unambiguous, the court does not look beyond its “four corners” in interpreting its meaning. Id.
    In a rather open and shut case, the court reasons that given the specific and unambiguous exclusion of coverage for dental benefits and implants, the Defendants were entitled to judgement as a matter of law. The case is attached below.
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