ERISA - Statute of Limitations Archives - Page 2 of 2

The McKennon Law Group PC periodically publishes articles on its Insurance Litigation and Disability Insurance News blogs that deal with frequently asked questions in insurance bad faith, life insurance, long term disability insurance, annuities, accidental death insurance, ERISA and other areas of law. To speak with a highly skilled Los Angeles long-term disability insurance lawyer at the McKennon Law Group PC, call (949)387-9595 for a free consultation or go to our website at www.mckennonlawgroup.com and complete our free consultation form today.

Disability insurance may be the most important type of insurance you can buy. Why? Because it protects your income earning ability if you become disabled. It can provide you with a substitute income when, due to injury or illness, you become disabled and can no longer earn a living. Under most policies and under California law, you are considered “disabled” when you can no longer perform the substantial and material duties of your “own occupation” in the usual and customary manner and with reasonable continuity. If the long-term disability insurance plan is employer-sponsored, it is likely governed by the Employment Retirement Income Security Act of 1974 (“ERISA”). Under ERISA governed plans, you can ensure that you put your best claim forward by providing strong support to your insurance claims administrator. This blog article briefly outlines the support you can provide, which may prevent your long-term disability claim from being denied. That support includes strong medical evidence in support of your disability, sufficient evidence of your occupational responsibilities and consistent behavior reflected in your daily activities and on social media.

Obtain the Necessary Disability Forms and Complete Them Accurately

Your first step after deciding to file a long-term disability insurance claim is to obtain the necessary forms from your insurer and/or your employer. Make sure you carefully complete these forms making sure they are honest, accurate and not overstated.

Strong Medical Evidence for Your Disability

While the specific type of medical evidence you need depends on the circumstances of your physical or psychiatric disability, your claims administrator will need to see that you are under the care of a doctor or mental health provider for your condition who has the requisite expertise in your disabling medical condition(s). Additionally, to the extent you can, you should support your claim with “objective” medical evidence, in the form of X-rays, MRIs, CTs and blood work where possible. While you do need to support your claim with sufficient medical evidence, this can also come in the form of medication and medical records, physician completed forms provided by the insurer, diagnostic records and letters from your physicians. Frequently overlooked, medication records can work to provide additional medical support for your claim in two ways. First, medications, such as those for pain management, can provide additional direct evidence in support of your disability (such as ongoing pain). Second, such medications often have side effects, such as impaired concentration, that can also inhibit your ability to perform your occupation.

In addition to direct evidence of your ongoing, regular treatment, you should request statements from your regular treating physicians in support of your disability. Your physicians should provide detailed statements as to your physical limitations, which will support your claim by explaining how your medical condition(s) cause your restrictions and limitations that prevent you from performing your occupation. Additionally, your doctors should continue to support your disability throughout the claim investigation process. For example, some administrators request a “peer review” of your records by a doctor or nurse hired to review your claim. In this peer review, another medical professional reviews your medical records and other supporting evidence in your claim file, usually on paper although sometimes they can request an in-person medical examination. As part of the peer reviewer’s assessment of your claim, he or she may contact your primary treating physician and ask him or her additional questions about your disability. If this happens, you want to be sure that you have a treating doctor that strongly supports your claim.

Sufficient Evidence of Your Occupational Responsibilities

Although you need to check your specific plan’s definition of disability, it often relies on your inability to perform your “own occupation” or, after a certain period of time, “any occupation” for which you are qualified by education, training, or experience. Often, the claims administrator fails to take into account the specific requirements of your particular occupation, given your level of education, training and experience. Although often overlooked, you can easily request and provide your job description from your employer. Then, there can be no mistaking the requirements of your position. You should buttress your employer’s job description as necessary to assist you in asserting your disability.

Line Up Your Evidence in Support

Determine what other evidence you have to support your disability claim. Do you have witnesses who can support it? If so, get letters or statements from them. Do you have a disability placard from the Department of Motor Vehicles? If so, that may be relevant and you should submit it. Do you have photographs of your home or apartment that show devices you have installed to assist you with your disability? If so, you should submit them. You should think about what evidence exists that will support your disability claim and if it will support your claim, submit it to the insurer.

Surveillance and Social Media Consistent with Your Restrictions?

When you file a “proof of claim,” your insurer begins gathering information, typically referred to as an “investigation” pursuant to its duty to fully investigate all insurance claims. The information your insurer collects will include some of the information discussed above, such as medical records, pharmacy records and even a job description. However, to further investigate the sufficiency of your claim, some insurers may request surveillance or may review your social media. Surveillance may include more traditional “Sherlockian” investigations, such as undercover video surveillance (i.e., an undercover video recording of the insured’s daily activities for a certain period of time). Also, given the rise in the use of social media, it may also include a review of your social media activities. You should, if possible, discontinue or greatly reduce your use of social media.

Given the likelihood of surveillance, it is important that you conduct yourself in a way that is consistent with your restrictions. While some disabilities allow for intermittent periods of activity that may otherwise seem inconsistent, it is important for you to at least be mindful of the potential for such surveillance. As to social media surveillance, the same general principle applies, but please see our detailed article providing best practices in social media for those currently in evaluation for a long-term disability claim.

In addition to the detailed support you can provide, it is also important that you be mindful of the strict deadlines that apply to employer-sponsored ERISA long-term disability claims. Overall, providing the insurance claims administrator with sufficient and timely evidence to support your disability is integral to the success of your claim and having an experienced disability, health and life insurance attorney can make all the difference.

Consult an Experienced Attorney

If your claim is complicated, you may wish to consult an experienced lawyer how handles disability insurance claims and litigation, like the attorneys of the McKennon Law Group PC. We provide consultation services before and during your claim submission to make sure you are putting your best claim forward.

If you wish to consult us regarding the filing of your claim for health, life, short-term disability or long-term disability insurance or if your claim has been denied, you can call (949)387-9595 for a free consultation with the attorneys of the McKennon Law Group PC, several of whom previously represented insurance companies and are exceptionally experienced in handling ERISA and Non-ERISA insurance claims.

The McKennon Law Group PC periodically publishes articles on its California Insurance Litigation Blog that deal with frequently asked questions in the insurance bad faith, life insurance, long term disability insurance, annuities, accidental death insurance, ERISA and other areas of the law. To speak with a highly skilled Los Angeles long-term disability insurance lawyer at the McKennon Law Group PC, call (949) 387-9595 for a free consultation or go to our website at www.mckennonlawgroup.comand complete the free consultation form.

Disability insurance provides you with income in the unfortunate circumstance that your earnings are halted by disability. Employers often offer disability insurance in the benefits packages they provide to their employees, but many employees fail to take advantage of the benefit. The Employment Retirement Income Security Act of 1974, otherwise known as ERISA, governs most employer-sponsored benefit plans, including disability insurance plans. The legislature enacted ERISA to protect employees from abuse of their employer-sponsored benefits. As such, ERISA requires that the plan administrator, which is usually the insurance company, employer, or both, adhere to a strict standards and deadlines. This blog post demystifies the general timeline of a disability insurance claim under ERISA. First, we briefly explain the basics of a disability benefits plan and when a disability benefits plan will be governed by ERISA. Next, we cover the life of a disability insurance claim under ERISA, including some of the important deadlines that apply.

What is a disability insurance plan and when is it governed by ERISA?

First, what is a disability insurance plan? Generally, long-term disability insurance covers a portion of your income when a disability permanently halts your ability to work. Long-term disability insurance pays a portion of your previous monthly salary, subject to certain offsets for state and federal disability benefits. Before the provider pays the benefits, disabled employees must satisfy certain eligibility requirements. For many disabled employees, the following requirements typically apply:

a minimum length of service;
a minimum waiting period before benefits begin; and,
qualifies under the plan’s definition of total disability.

The next question to address is whether the disability insurance plan is governed by ERISA? When making a disability claim, you will first want to determine whether ERISA applies to your claim. Just like health insurance, employers often provide disability insurance as part of an employee’s benefits package. Unlike purchasing an individual plan directly from the insurance company, ERISA usually governs such employer-sponsored benefit plans. However, it is important to keep in mind that ERISA does not apply to some employers, such as government entities or a churches.

Some of the Important Dates and Deadlines in an ERISA Case.

If ERISA applies to your long-term disability or short-term disability insurance plan, the following timeline is generally applicable after you file your initial claim.

The Initial Claim

Within forty-five days of receipt, a claim should be approved or denied. 29 C.F.R. § 2560.503-1 (f)(3).
But, the plan may extend the forty-five-day time frame by up to thirty days. The insurer must inform the insured of its request for an extension within the initial forty-five-day period. That request for an extension must also explain why the insurer needs additional time, what additional time or information is necessary, whether there are unresolved matters, and when a final decision will be made. 29 C.F.R. § 2560.503-1 (f)(3).
If the insurer requests new or additional information, the insured has forty-five days to respond to the request. 29 C.F.R. § 2560.503-1 (f)(3).
Once the insured has provided the requested information, the claim should be decided no later than thirty days or as required by the plan, whichever date comes first. See 29 C.F.R. § 2560.503-1 (f)(3).

Appeal of the Initial Claim

If the insurer rejects your request for disability benefits, you have 180 days following receipt of a notification of an adverse benefit determination to file an appeal. 29 C.F.R. § 2560.503-1 (h)(3)(i). If you fail to adhere to this time limit, you may have no avenue to further pursue your claim.
An appeal should be decided within forty-five days of receipt by the insurer. 29 C.F.R. § 2560.503-1 (i)(3).
In special cases, review of the appeal request may require additional time. The plan may request up to an additional forty-five days, but must provide an explanation of the circumstances and an expected date when the decision will be rendered. 29 C.F.R.§ 2560.503-1 (i)(3). Additionally, some plans may allow for a second appeal.

The Statute of Limitations to File Suit

If your appeal is denied and once you have exhausted all available administrative remedies, you may file suit in court. However, your ability to file suit is also subject to a separate time limit that is important to keep in mind. If you fail to adhere to this time limit, you may have no avenue to pursue your claim.

Prior to the Supreme Court’s decision in Heimeshoff v. Hartford Life & Accident Insurance Co., 134 S. Ct. 604 (2013), California ERISA lawsuits could be brought up to four years after the denial on appeal. After the Supreme Court’s ruling, an ERISA plan may impose a shorter time frame on an ERISA claim so long as the time frame is reasonable and no controlling statute prevents the limitations period from taking effect. For disability insurance claims in California, it is likely that California Insurance Code Section 10350.11’s three-year time limit will apply and override any shorter limitations period. Section 10350.11 applies a statute of limitations of three years after you are required to provide written proof of loss to the insurer.

How the Department of Labor’s New Regulations may affect the timeline

The Department of Labor (the “Department”) regulates disability and health insurance claims subject to ERISA. Recently, the Department finalized new regulations codified at 29 C.F.R. § 2560.503-1 and discussed at 81 Fed. Reg. 92316. The regulations hope to reduce the potential for a conflict of interest in managing an ERISA plan and better inform the insured as to why their disability benefits were denied. As far as the timeline goes, the following four points are important to remember.

The regulations only apply to claims for disability benefits filed on or after January 1, 2018.
Per the new regulations, the insured may file suit when a claim is “deemed denied” even if the administrative remedies have not been exhausted. The regulations outline that a claim is “deemed denied” once the plan fails to comply with the appropriate regulations.
The regulations also outline the insured’s ability to request the administrator’s written rationale for the alleged violation. The administrator must respond to such a request within ten days, including a written explanation addressing the alleged violation.
Finally, the new regulations require that the final denial adequately describe any applicable contractual limitations period, including the specific date that the statute of limitations to file ends.

For a full discussion of the Department’s new regulations, see our article in the Daily Journal, available at https://mslawllp.com/robert-mckennon-and-scott-calvert-publish-article-in-the-los-angeles-daily-journal-new-regulations-will-benefit-claimants-in-disability-insurance-cases/.

One hundred days is not a reasonable amount of time to give a plan participant to file a lawsuit under the Employee Retirement Income Security Act of 1974 (“ERISA”). This was the conclusion reached by the United States District Court Southern District of California in its recent decision in Nelson v. Standard Insurance Company, 2014 U.S. Dist. LEXIS 119179 (S.D. Cal. Aug. 26, 2014), which held that a contractual limitation contained in an ERISA-governed group long-term disability policy’s limitation period is unreasonable and unenforceable because the time period may have ran prior to the end of the administrative review process and because it provided the plan participant only one hundred days to file an action in federal court. The holding in Nelson was one of the first in the Ninth Circuit to determine, in the wake of the Supreme Court’s decision in Heimeshoff v. Hartford Life & Accident Insurance Co., 134 S. Ct. 604 (2013), that a plan’s contractual limitation on filing a lawsuit is unreasonably short. While numerous questions still remain as to what constitutes an unreasonable plan limitations period, the Nelson decision makes it clear that, at the very least, providing a plan participant only one hundred days within which to file a complaint in federal court is not reasonable.

Last year, in its highly anticipated decision in Heimeshoff, the Supreme Court unanimously held that an ERISA governed plan’s limitation period, requiring a claimant to bring an action within three years of when proof of claim was due, was enforceable. The Court found that this contractual time limitation on filing a claim in federal court was valid despite the fact that it was shorter than the applicable statute of limitations. Although the Court held that a plan’s contractual limitation periods should ordinarily be enforced, it also stated that such provisions may not be enforced where the period provided is “unreasonably short.” The Heimeshoff Court explained that a limitations provision is unreasonably short if it “leav[es] [a] claimant[] with little chance of bringing a claim not barred.” The Heimeshoff decision left open the issue of just how short a plan’s contractual limitation must be in order to be considered unreasonable. The Southern District’s decision in Nelson now provides some guidance on this question.

In Nelson, the Plaintiff, a plan participant, brought an ERISA action against her Group Long-Term Disability Plan (“Defendant”) and the plan administrator, Standard Insurance Company (“Standard”). After initially accepting and paying the Plaintiff’s disability benefits in July 2008, Standard terminated her benefits in January 2010 based on a finding that she was no longer disabled. In June 2010, Plaintiff appealed the decision and a final denial was issued in October 2011. In January 2013, Plaintiff filed her action against Standard and Defendant in the Southern District. The plan contained a provision entitled, “Time Limits on Legal Actions”, which states that a plan participant must bring a legal action within three years after the earlier of either (1) the date the administrator received proof of loss or (2) the time within which Proof of Loss was due to the administrator. On the basis of this contractual limitations provision, Defendant filed a motion for judgment on the pleadings under the Federal Rules of Civil Procedure 12(c), arguing that because the Plaintiff provided her Proof of Loss in May 2008 and the contractual time limit had already expired in May 2011, she was barred from suit.

The court in Nelson first stated that it could not determine the date upon which the contractual limitations period began to run because the term, “proof of loss” was never used in Plaintiff’s first amended complaint and she had submitted documentation supporting her disability status on several different dates. Plaintiff argued that her cause of action did not accrue as of the May 30, 2011 date that Defendant contended the limitation period expired. However, Defendant asserted that Plaintiff’s cause of action accrued on February 16, 2011, one hundred days before the contractual time limit expired. The court held that, even accepting Defendant’s argument that the limitation period concluded on May 30, 2011 and that the Plaintiff’s cause of action accrued one hundred days earlier on February 16, Defendant cited to no legal authority finding that a period of one hundred days is a reasonable period for a Plaintiff to file a lawsuit. The court found that this time limitation was especially unreasonable in the Plaintiff’s situation because a final decision had not even been reached on the claim prior to the expiration of the contractual limitation period. Indeed, the court concluded that a contractual limitation period may be rendered unreasonable as a result of undue delay in reviewing a claim. Based on these findings, the court denied Defendant’s motion for judgment on the pleadings because the contractual limitations period in the plan was unreasonably short.

The decision in Nelson demonstrates that, even after Heimeshoff, a plan’s contractual limitation period that may run prior to the completion of administrative review process is a good candidate to be found to be unreasonable and unenforceable. Moreover, at least in the situation presented in Nelson, providing a plan participant with only one hundred days to file an action is patently unreasonable. It is important to note that the Nelson court also specifically stated that, even where a limitation period is found to be reasonable, the doctrine of equitable estoppel may still prevent enforcement of the contractual limitations provision. The decision in Nelson should remind plan participants to be mindful of both statutory and contractual time limitations on their ability to file a lawsuit to protect their benefits.

At times, decisions that appear favorable to insurers can also have unexpectedly positive take-aways for policy holders. Gordon v. Deloitte & Touche, __ F.3d ___, 2014 U.S. App. LEXIS 6688 (9th Cir. April 11, 2014) is just such a case. Although, the Ninth Circuit in Gordon ruled in favor of the insurer in finding that the insured’s ERISA action was barred by the California four-year statute of limitations, the Court also reaffirmed and clarified the standards for evoking waiver and estoppel arguments to prevent insurance companies from raising a statute of limitations or contractual limitations defense.

The plaintiff in Gordon was an insured under a long-term disability plan (the “Plan”) governed by ERISA. The plan was insured and administered by MetLife. The insured sought disability benefits under the Plan due to depression. After initially paying benefits to the insured, MetLife terminated benefits. The insured subsequently filed two appeals. In 2004, MetLife denied the insured’s second appeal, but indicated in the denial letter that she had 180 days to appeal the decision. The insured did not file an appeal and took no action for more than four years. Then, in 2009, after receiving a request from the California Department of Insurance to reevaluate the claim, MetLife reopened her claim. However, MetLife upheld its original decision to terminate benefits. MetLife’s denial letter advised the insured that she had 180 days to appeal and, that if the appeal was denied, she would have the right to bring a civil action under ERISA section 502(a).

In January 2011, the insured filed a complaint in federal district court. The district court granted the Plan’s motion for summary judgment, finding that the insured’s action was barred by the applicable four-year statute of limitation and the Plan’s three-year contractual limitation. The insured appealed arguing that MetLife’s limitation defense does not bar her action because: (1) reopening the claim file reset the statute of limitation; (2) the insurer waived its limitation defense; and (3) the insurer was estopped from asserting a limitation defense. All three arguments were ultimately rejected by the Ninth Circuit who affirmed the district court’s decision. However, in reaching this decision, the Court provided valuable edification of the limits placed on the use of time bars as a defense to claim brought under ERISA. As an initial matter, given the nearly seven years that had passed between the filing of the complaint and when the 180 day period to file an appeal expired, the court found that the statute of limitations had clearly ran and did not consider whether the three-year contractual limitation period applied.

The Court then addressed the insured’s argument that reconsideration of her claim in 2009 revived the statute of limitations pursuant to California law regarding creation of a new cause of action resulting from acknowledgment of debt. However, the Court reiterated that federal law governs determination of the accrual of an ERISA action and the Court found that reopening the claim file by itself is not sufficient to revive the statute of limitations. Next, the Court considered the insured’s estoppel argument. Significantly, the Court definitively acknowledged that, as a general rule, an insurance carrier will be estopped from relying on a statute of limitations defense when its own prior representations or conduct have caused the plaintiff to run afoul of the statute and equity justifies holding the defendant responsible for the outcome. However, the Court found that in this particular case, the statute of limitations had already run when MetLife informed the insured in its 2009 denial letter that she could bring an ERISA action.

Finally, the Ninth Circuit addressed for the first time in this case, whether a waiver argument can be used by insureds to prevent insurers from raising a limitation defense in ERISA cases. Turning to California law for guidance, the Court concluded that, based on a review of California decisions, an insurance company cannot waive the statute of limitations after it has run. Nevertheless, adopting the position taken by the Seventh Circuit, the Court found that even if waiver or estoppel were available in this case, the insured would have to show either detrimental reliance or some misconduct by the insured. Here, the Court held the insured had simply not shown any detrimental reliance or unfair conduct by MetLife. However, it is important to note that the Court in Gordon did not address the United States Supreme Court’s recent decision in Heimeshoff. In that decision, which was discussed in our prior blog article, the Supreme Court explicitly reserved for their use traditional equitable remedies including equitable tolling, waiver and estoppel. Given, the Supreme Court’s clear position on this issue, the Ninth Circuit will likely be more inclined to allow waiver arguments to be used to prevent insurers from raising a limitation defense in the future.

The Gordon decision highlights many of the potential pitfalls for insureds in dealing with navigating often complex rules regarding statute of limitations and contractual limitations. More importantly, it reaffirmed that estoppel can still prevent insurers from raising a limitations defense. The decision leaves open whether waiver may be used as well to prevent insurance companies from using contractual limitation periods as a defense if the insured can show detrimental reliance or self-serving misconduct by the insurer. However, given the Supreme Court’s affirmation of the applicability of traditional equitable remedies in ERISA cases in Heimeshoff v. Hartford Life & Accident Insurance Co. and Wal-mart Stores, Inc., 134 S. Ct. 604 (Dec. 16, 2013) courts in the Ninth Circuit will likely allow insureds to use waiver and estoppel to overcome statute of limitation defenses in certain limited situations. The Gordon decision should serve as a reminder to insureds to act immediately if their claims are denied and to contact an attorney to ensure that they do not forfeit their right to file a lawsuit. This is especially true in dealing with disability LTD insurance, health insurance and life insurance matters.

In a highly anticipated decision, a unanimous United States Supreme Court held that insureds with employer-sponsored plans are contractually bound by the limitations periods set forth in their plan documents. These limitations periods, which specify when insureds must file any legal actions under the Employee Retirement Income Security Act of 1974 (“ERISA”), are enforceable so long as they are not unreasonably short. The Court held in Heimeshoff v. Hartford Life & Accident Insurance Co. and Wal-mart Stores, Inc., __ U.S. __ , 2013 U.S. LEXIS 9026 (Dec. 16, 2013), that the Plan’s contractual limitations period governs when a participant/beneficiary may file a legal action. The Court concluded that the Plan’s contractual statute of limitations period was enforceable and that the time spent in the administrative claims process did not toll the running of the statute.

Heimeshoff involved plaintiff Julie Heimeshoff (“Heimeshoff”), a Senior Public Relations Manager for Wal-Mart, who sought long-term disability benefits from her employer-sponsored plan issued by Respondent Hartford Life & Accident Insurance Co (“Hartford”) to Wal-Mart employees. The Plan imposed a three-year statute of limitations from the date proof of claim is due for legal action brought against the Plan, which commenced on the date proof of loss was to be submitted. Hartford required Heimeshoff’s proof of loss by December 2005, but she failed to submit the requisite documents and Hartford denied her claim. Hartford issued its second denial in November 2006, and denied her final appeal in November 2007. Heimeshoff brought suit to recover her benefits in November 2010 within three years after the final denial, but almost six years after the proof of loss was due. The district court dismissed her suit, finding the Plan terms explicitly prohibited legal action beyond the three-year limitations period. The Second Circuit Court of Appeals affirmed.

The Supreme Court granted certiorari to determine whether the Plan’s limitations provision, which began before the administrative review process ended, was enforceable. Prior to Heimeshoff, the majority rule, including in the Ninth Circuit, was the statute of limitations begins to run when the cause of action “accrues,” which was typically when the appeal was denied. In ERISA actions, a claimant cannot file suit until he or she has exhausted the plan’s internal administrative process. While ERISA imposes requirements on plans to respond and decide claims within certain periods of time, practical obstacles, such as difficulties obtaining medical information or proof of loss, can delay this process.

Heimeshoff first argued that the Plan’s limitations provision would undermine the internal review process because participants will sacrifice the benefits of internal review to preserve time for filing suit. However, the Court rejected this contention because participants failing to develop evidence during the first review run the risk of forfeiting use of that evidence at trial. Secondly, the Court believed participants are unlikely to prioritize judicial review over internal review.

Next, Heimeshoff contended that permitting plans to initiate limitations periods prior to completion of the review process endangers judicial review. However, the Court noted ERISA regulations require administrators to act in good faith and take prompt action in their internal reviews. If administrators fall short, the participant can directly seek judicial review. Furthermore, if administrators unreasonably delay, participants can raise equitable defenses to the statute of limitations. In addition, the United States argued, as amicus curiae, that if the limitations provision is enforced, good faith administration will also diminish the availability of judicial review. The Court disagreed, stating the three-year limitation provision is required by most states and no significant evidence showed the provision impedes judicial review. Importantly, the Supreme Court reassured claimants that lower courts can apply waiver, estoppel or equitable relief if claimants are stalled in the internal review process. The Court explained:

Moreover, even in the rare cases where internal review prevents participants from bringing §502(a)(1)(B) actions within the contractual period, courts are well equipped to apply traditional doctrines that may nevertheless allow participants to proceed. If the administrator’s conduct causes a participant to miss the deadline for judicial review, waiver or estoppel may prevent the administrator from invoking the limitations provision as a defense. See, e.g., Thompson v. Phenix Ins. Co., 136 U. S. 287, 298–299 (1890); LaMantia v. Voluntary Plan Adm’rs, Inc., 401 F.3d 1114, 1119 (CA9 2005). To the extent the participant has diligently pursued both internal review and judicial review but was prevented from filing suit by extraordinary circumstances, equitable tolling may apply. Irwin v. Department of Veterans Affairs, 498 U. S. 89, 95 (1990) (limitations defenses “in lawsuits between private litigants are customarily subject to ‘equitable tolling’”).

The Court quickly addressed two additional arguments. First, it rejected Heimeshoff’s argument that the limitations period should be tolled during internal review, stating this constituted contract revision. Next, the Court rebuffed Heimeshoff’s argument that state law should toll the limitations period during the internal process. In doing so, the Court explained the parties clearly “agreed” [this is a misnomer as ERISA plans are classic contracts of adhesion] to a limitations period and did not seek to borrow the State’s limitations period. Ultimately, the Court ruled that Plan’s limitations provision controlled the question of when a claimant could pursue litigation.

Certainly, the Court’s decision favors insurance companies and other plan/claim fiduciaries who have the ability to delay processing claims. However, ERISA imposes strict timelines on actions by insurance companies and other plan/claim fiduciaries and as a result, these rules will serve to mitigate the potentially harsh consequences of this decision. Furthermore, the Court clearly limited its holding to limitations provisions which are reasonable.

The best part of this decision for plan participants and beneficiaries who typically have life, health and disability insurance claims, as discussed above, the Court explicitly reserved for their use traditional equitable remedies including equitable tolling, waiver and estoppel to ensure Heimeshoff does not cause harsh results when the actions of insurance companies and other plan/claim fiduciaries cause delays or their actions otherwise result in unfairness to plan participants. As long as claimants and their attorneys act promptly to hold insurance companies and other plan/claim fiduciaries accountable to the timelines applicable to the claim review process and/or if they otherwise act diligently, Heimeshoff will not act as a bar to their litigation. Indeed, administrators are required by ERISA regulations governing the internal review process to take prompt action, and the penalty for failure to meet those deadlines is immediate access to judicial review for plan participants. See 29 CFR §2560.503–1(l).

By granting certiorari in Heimeshoff v. Hartford Life and Accident Insurance Co., 496 Fed. Appx. 129, 2012 U.S. App. LEXIS 19269, 2012 WL 4017133 (2d Cir. September 13, 2012), the United States Supreme Court is poised to address an issue that has left countless ERISA claimants without a remedy to challenge a wrongful denial of disability benefits. Specifically, the Supreme Court will consider when the statute of limitations accrues following a decision to deny a claim for disability benefits. Or, as a claimant would ask the question, “What is my deadline to file a lawsuit in an ERISA matter?”

In Heimeshoff, the claimant was a Wal-Mart employee who filed long-term disability claim under an ERISA plan, asserting that she could no longer work as of June 2005 because of a variety of conditions, including lupus and fibromyalgia. Her claim was denied in November 2007, and she filed her lawsuit in November 2010, believing that she met the Policy’s three-year internal limitations period. However, the District Court granted Hartford’s motion to dismiss, based on the policy language stating that a lawsuit must be brought “within 3 years after written proof of loss is required to be furnished,” which would have been in September 2008 (because proof of loss was due within 90 days of Heimeshoff’s last day at work).

The Second Circuit Court of Appeals affirmed the District Court’s ruling, rejecting the arguments that the Hartford’s contractual limitations period did not begin to run until the final denial of benefits and that Hartford erred by not disclosing the deadline to file a lawsuit in the final denial letter.

Hopefully, in addressing these issues, the United States Supreme Court’s ruling will simplify the calculation of deadlines to file a lawsuit. The clearer the rules, the fewer claimants who will be unwittingly left with no remedy to challenge a final denial decision.

Many claimants (and some lawyers) are confused by the deadlines associated with ERISA claims. If your claim for disability benefits was denied by an insurance company, you should speak with an attorney as soon as possible to ensure that you do not forfeit your right to file a lawsuit. If you have a dispute with an insurance company and would like to discuss your matter with an attorney, please contact us for a free consultation.

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