Recently I was working with a client who had an appeal from an individual seeking to get additional benefits under a health plan. In a nutshell, the issue was an annual limit on visits and the participant wanted the plan to pay for extra visits to a therapist. The client was stuck between applying the plan language and wanting to grant the exception. For plan administrators and sponsors, this type of situation is all too common and can cause real problems.
First, plans should always be administered in accordance with the plan terms. A limit is a limit and, absent a plan amendment that changes the limit, it should be followed to the letter. But applying plan provisions necessarily requires application of plan terms which requires interpretation which is within the discretion of the plan administrator. By its nature, interpretation has a certain component of subjectivity that allows for the plan administrator to grant appeals based on its interpretation of plan language. However, this does not give the administrator the ability to disregard the terms and apply anything other than their plain meaning. In other words, the plan says what it says. If you want to have exceptions, consider a plan amendment.
