The United States Supreme Court heard oral arguments on April 23, 2008 in a case that, depending on its outcome, could dramatically affect the way employers handle health and disability claims handling.

The case, Metropolitan Life Insurance Co. vs. Wanda Glenn, involves a situation where Ms. Glenn had a serious heart condition and was on permanent disability through her employer's disability plan. The claims administrator and insurer are one in the same. At some point, the claims administrator determined she could go back to work on light duty and her disability payments were terminated (even after the Social Security Administration determined she was disabled). She sued her employer in federal court with the Sixth Circuit finding in her favor. In doing so, the Court considered the fact that the claims administrator and the insurer funding the plan were the same. This "conflict of interest" was a factor that could be considered when reviewing the claims administrator's decision. Metropolitan appealed to the United States Supreme Court. In agreeing to hear the case the Supreme Court added its own question to be answered:

If an administrator that both determines and pays claims under an ERISA plan is deemed to be operating under a conflict of interest, how should that conflict be taken into account on judicial review of a discretionary benefit determination?

If the Court decides that such an arrangement is a conflict and is to be considered in any review of a benefits determination, large employer health and disability plans may need to consider independent third-party claims administration. This would add costs to the review process and those costs would be passed on to the employee - or so the insurers argue.