Under The Employee Retirement Income Security Act (ERISA), employees who have wrongly been denied benefits or who have other benefit-related claims can file lawsuits in court. However, they must do so within the particular plan’s limitations period. In 2013, the U.S. Supreme Court issued a ruling in Heimeshoff v. Hartford Life & Acc. Ins. Co., stating that these time limits were enforceable as long as they were not unreasonably short and another law did not prevent the limitations provision from going into effect.
This ruling involved a woman whose original claim for long-term disability benefits began in 2005 and whose employer’s policy stated that she had three years from the date that proof of loss was submitted to file a lawsuit. After failing to submit a satisfactory proof of loss form, the plaintiff’s claim for benefits was denied. In October of the following year, the plaintiff submitted her claim again, this time with a proof of loss form. The company, however, retained an independent medical professional to review the claim and determined, in November of 2006 that the plaintiff was not eligible for benefits.
The plaintiff subsequently appealed the decision, after which the employer hired two additional doctors to review the appeal. At this point, the company issued a final denial letter in November of 2007. In 2010, the plaintiff filed a federal lawsuit, which the court dismissed because it was not brought within three years as required by the company’s policy.
On appeal, the Supreme Court held that each plan’s contractual limitations provision must be enforced because ERISA plans are essentially contractual agreements and contractual limitations are almost always enforced as they are written. The Court also explained that focusing on the written terms of a plan would cut down on administrative costs and litigation expenses, which would in turn encourage more employers to offer ERISA-qualifying plans. Furthermore, ERISA only authorizes plan participants to file a claim in order to recover benefits or enforce their rights under the terms of the plan. According to the Court, altering a plan’s limitations provision would be tantamount to changing the plan, which is outside the scope of authority granted to the judicial system, who are only directed to enforce a plan’s terms.
However, the Court also stated that most ERISA claims should be resolved within one year. As a result, anything shorter than this could be considered unreasonably brief. Finally, the Court stated that its decision did not apply to breach of fiduciary duty claims, which have a six year statute of limitations.
ERISA guarantees that covered employees can file a claim for denied benefits as long as certain procedural hurdles are met. In addition, the claim must be filed in a timely manner, although the deadline by which claims must be filed depends on the specifics of each plan. If you were recently denied benefits or have another ERISA-related claim, please contact Michael Bartolic, LLC by calling us at (312) 635-1600 or by completing and submitting one of our brief contact forms.