Since the Supreme Court’s ruling in Heimeshoff v. Hartford Life & Acc.Insur.Co., 134 S.Ct. 604 (December 16, 2013), which held that contractual limitations periods established by ERISA-governed employee benefit plans are enforceable, there has been much confusion about when such limitations periods commence and when they end.  A recent ruling from the U.S. Court of Appeals for the First Circuit has gone a long way in easing that confusion.

In Santana-Diaz v. Metro. Life Ins. Co., 2016 WL 963830 (1st Cir. March 14, 2016), the court of appeals held that ERISA requires a plan administrator in its denial of benefits letter to inform a claimant of not only his right to bring a civil action, but also the plan-imposed time limit for doing so.” Because MetLife failed to meet that obligation, the policy contractual limitations period was “rendered inapplicable” and the suit was timely filed.

The court pointed to a regulation promulgated by the Department of Labor requiring plan administrators to provide “written or electronic notification of any adverse benefit determination” that includes a “description of the plan’s review procedures and the time limits applicable to such procedures, including a statement of the claimant’s right to bring a civil action.” 29 C.F.R. § 2560.503-1(g)(1)(iv). MetLife argued that the regulation applied only to a statement as to time limits for seeking review, but the court disagreed. However, the court of appeals disagreed, pointing to the “including” language which deems an ERISA civil action one of the review procedures.

The court also noted that rulings from the Third and Sixth Circuits reached the same conclusion: Mirza v. Insurance Administrator of America, Inc., 800 F.3d 129 (3d Cir.2015) and Moyer v. Metropolitan Life Insurance Co., 762 F.3d 503 (6th Cir.2014).  The court also supported its conclusion by observing, “29 U.S.C. § 1133’s purpose of ensuring a fair opportunity for judicial review, and with ERISA’s overall purpose as a remedial statute.”  The court limited its holding, however, to plan-imposed limits for bringing suit and reserved for another day the question of whether the plan administrator is obligated to provide notice of the forum state’s limitations period in situations where the plan lacks an internal contractual limitations period.

In its recently published notice in the Federal Register that proposed new regulations applicable to disability insurance plans, the Department of Labor invited comments on limitations issues such as the one presented in this case.  While the First Circuit has now joined the Third and Sixth Circuits on this issue, a uniform rule promulgated by the Department of Labor in all cases would be welcome.  The burden of setting out a date within which a claimant has a safe harbor to file suit is minimal, while the uncertainty resulting from the Heimeshoff ruling has created significant confusion in this area that could easily be resolved with a uniform rule consistent with the holding in this case.

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Update on ERISA-governed insurance benefit claims:  NACLE

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ERISA law is constantly changing; and with each new ruling, the scope and context of how issues relating to disability, life and health benefits are resolved by the courts is constantly evolving.  In June of 2021, Mark DeBofsky recorded a continuing legal education program for the National Academy of Continuing Legal Education (NACLE) providing an update on ERISA-governed insurance claims.