The opinion analyzes how the Commissioner's ban qualifies under both prongs of ERISA's savings clause test outlined by the Supreme Court in Kentucky Ass'n of Health Plans v. Miller, 538 U.S. 329 (2003). It concurs with the conclusion of the Sixth Circuit in American Council of Life Insurers v. Ross, 558 F.3d 600 (6th Cir. 2009), where that court upheld a Michigan state ban on discretionary authority clauses. In Morrison the Ninth Circuit spends time discussing and rejecting the insurer's argument that to allow states to ban discretionary authority clauses sets up an alternative remedy that conflicts with ERISA's exclusive scheme for redressing improper denial of benefits. The Ninth Circuit rightly swats that away. First, banning discretionary authority clause grants no additional remedy to insureds. And second, prior Supreme Court precedent makes clear that plan sponsors and administrators are not automatically entitled to deferential review of their decisions under ERISA. They dearly want that privilege. But the language of the statute provides no reason to think Congress intended that ERISA plan sponsors and administrators are automatically granted such a significant advantage in dealing with plan participants and beneficiaries.
I don't think there is much questionable analysis in either Morrison or ACLI v. Ross. I expect that few, if any, courts in the future will find that state bans of discretionary authority clauses are preempted by ERISA.
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