In a new MetLife lawsuit, an Arkansas man says the insurance company wrongfully denied his claim for disability insurance.

Plaintiff Al B. says in his MetLife lawsuit that he became disabled due to a case of spondylosis.

At that time, he says, he was a beneficiary of an employer-sponsored disability insurance program administered by defendant MetLife.

Al says he made a claim for disability benefits through MetLife.

He alleges MetLife initially granted his claim but then later denied it, all based on the same medical information, according to his MetLife lawsuit.

MetLife denied this claim “unilaterally, arbitrarily and capriciously,” Al claims.

He says this denial violates both the terms of the disability insurance plan and the federal Employee Retirement Income Security Act, or ERISA.

He seeks an award of all benefits due under the plan and an award of attorney’s fees and the costs of this litigation.

Raising ERISA Claims in a MetLife Lawsuit

Because Al’s disability benefits plan is provided by his employer, it’s governed by ERISA. So compared to other plaintiffs whose plans are covered by state laws, Al could be in for an uphill battle.

ERISA generally governs long-term disability insurance plans that employers provide for their employees benefit.

As a federal law, ERISA preempts state laws that would otherwise apply.

These state laws can still apply to non-ERISA governed policies, such as those a person purchases privately without an employer’s assistance.

Though ERISA was ostensibly enacted to protect employees’ retirement and other benefits, critics say it’s evolved to favor insurance companies over claimants.

One significant difference between ERISA and most state laws is the standard of review. The applicable standard of review depends on the terms of the policy.

If the disability insurance plan provides that the insurance company will have discretion in granting or denying claims, ERISA says that a judge reviewing that decision will apply what’s known as an “abuse of discretion” standard of review.

That standard gives the insurance company lots of discretion to deny claims, and it makes it difficult for a plaintiff to succeed in challenging such a denial.

ERISA also forces claimants to exhaust all options with the insurance company before they can bring their appeal to court.

Most policies give the company at least one more opportunity to review the claim before allowing the claimant to sue.

Another disadvantage to suing under ERISA is that it’s generally harder for the prevailing to win attorney’s fees.

Getting reimbursed for attorney’s fees can remove a significant barrier to challenging a wrongful denial, but not if the likelihood of that award is significantly reduced.

And unlike many state laws that apply to other types of policies, ERISA does not provide for punitive damages.

Punitive damages are used to financially punish a company that acts in bad faith – for example, by denying a claim that inarguably shows entitlement to benefits.

While some state laws provide for punitive damages in the case of bad-faith denials, the plaintiff in an ERISA lawsuit may only be able to recover payment for withheld benefits, attorneys’ fees and interest.

Al’s MetLife Lawsuit is Case No. 16-6095, in the U.S. District Court for the Western District of Arkansas.