An employee in Chicago whose claim for long term disability insurance under an ERISA disability plan is approved during the administrative process is always better off than having to litigate to receive the benefits. Working with a long term disability attorney early in the process can help you avoid the burdens of time and expense with litigation. Though you definitely do not want to end up in litigation, it is best to recognize the possibility and handle the administrative claim and appeal in a way that preserves all rights should you have to sue.
A recent case out of the District Court of Alaska illustrates the unfortunate circumstances that an employee was faced when she failed to submit the administrative appeal of the claim denial within the prescribed time. Dietz-Clark v. HDR, Inc., No. 3:15-CV-00035 JWS, 2015 U.S. Dist. LEXIS 141381 (D. Alaska Oct. 14, 2015). The plaintiff had failed to file an appeal of the insurer’s administrative denial of her claim for benefits within the 180-day deadline. She likely was not working with a long term disability lawyer. Plaintiff alleged she did not file an appeal within the deadline because she hoped to rehabilitate herself. The plaintiff attempted to utilize the state’s notice-prejudice rule to excuse her failure to file a timely appeal on the basis that the insurer had not been prejudiced. The rule had thus far not been extended so far as to cover contractual administrative appeal deadlines, particularly in ERISA health insurance and disability benefit cases where the appeal deadline is required under federal regulation to be no less than 180 days. 29 C.F.R. § 2560.503-1h)(4). The court rejected plaintiff’s argument. Quoting the Ninth Circuit the court explained, “[t]here is no . . . federal case that has applied a notice-prejudice rule outside the initial review context. To extend the notice-prejudice rule to ERISA appeals would extend the rule substantially beyond its previous uses.” Id. at *9–10. Thus, without getting to the merits of the plaintiff’s claim, the court dismissed her case inhibiting her from pursing her benefits any further.
All courts agree that claims for long term disability and other benefits under ERISA § 502(a)(1)(B) are subject to the exhaustion requirement where the plan at issue mandates exhaustion. The law in most jurisdictions is relatively well-settled that a disability claimant under an ERISA plan is foreclosed from suing to enforce rights under the plan when there is a failure to exhaust the administrative remedies available under the plan unless the particular claim falls into a narrow exception to the requirement. Nonetheless, whether it is due to novel facts or an attorney inexperienced in contours of ERISA law, litigation in this area continues to occur. If you are concerned with your ability to meet your deadline to appeal your benefit denial contact an experienced long term disability attorney today.