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In some Social Security cases the same entity that pays the employee’s benefits may determine whether an employee is eligible fto receive benefits. This creates a pretty apparent potential conflict – Why would an organization work against its own monetary interests? How far are the Courts allowed to dig, past the record, if the only red flag is that there is a conflict of interest?

In a recent case, the Supreme Court ruled on this very issue. The Supreme Court did find there to be a conflict of interest. Particularly, the employer encouraged the employee to argue to the Social Security Administration (SSA) that she could do no other work. Her employer was then reimbursed for the benefits paid out (even attorney fees were paid out of past due benefits) and then ignored SSA’s disability finding. The Supreme Court ruled the District Court should consider the employer’s inconsistent positions, both of which were financially advantageous.

This allows courts to look outside the four corners of the administrative record and, further, makes private insurers aware they cannot turn a blind eye to a disability determination by Social Security. For further reading, see Metropolitan Life Insurance Company v. Glenn, 128 S.Ct. 2343 (2008).

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