Supreme Court Grants Review Of Statute Of Limitations Issue In ERISA Disability Case

The U.S. Supreme Court has granted review of the question of when a statute of limitations should accrue for judicial review of an ERISA disability adverse benefit determination. The Court declined to review two other questions presented in the case that involved notice of the time limits for judicial review of an adverse benefit determination and the remedy for failure to provide such notice. The case is Heimeshoff v. Hartford Life & Accident Insurance Co. and Wal-Mart Stores, Inc.
Lower court proceedings. In an unpublished opinion issued on Sept. 12, 2012, the Second Circuit U.S. Court of Appeals affirmed a lower court’s decision that Julie Heimeshoff’s claim for long-term disability benefits was untimely because she filed her action outside the policy-prescribed, three-year statute of limitations period. Hartford’s plan provided that its three-year limitations period ran from the time that proof of loss was due under the plan. Heimeshoff filed her claim challenging the denial of long-term disability benefits more than three years after her proof of loss was due. The court rejected her argument that Hartford’s contractual limitations period did not begin to run until the final denial of benefits.

Conflict among the circuits. The petition for certiorari indicates there is conflict among the circuits over the accrual time for ERISA statutes of limitation. The Fourth and Ninth Circuit U.S. Courts of Appeals have ruled that a plan’s statute of limitations cannot begin running until the claimant has exhausted administrative remedies and the plan has issued a formal, final adverse benefits determination. Other circuits, including the Second, have ruled that a plan’s pre-denial statute of limitations is enforceable if “reasonable” as determined on a case-by-case basis.

The petition indicates that the first approach by the Fourth and Ninth Circuits provides a bright-line accrual time for the statute of limitations, which is consistent with ERISA’s goals for plan fiduciaries to act in the sole interests of beneficiaries. The approach of the remaining circuits impairs the rights to judicial review, contrary to the ERISA statute, regulations, and Supreme Court decisions, according to the petition.

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