Supreme Court Upholds ERISA Plan’s Three-Year Deadline To File A Lawsuit

The Supreme Court of the United States ruled that an ERISA plan may properly impose a reasonable time limit on filing a lawsuit to recover benefits. Such time may start to run even before completion of the required administrative review process.

On December 16, 2013, the Supreme Court of the United States, in Heimeshoff v. Hartford Life & Accident Insurance Company, unanimously concluded that an Employee Retirement Income Security Act of 1974 (ERISA) plan's provision imposing a time limit for filing a lawsuit is enforceable, so long as that time period is reasonable in length and there is no controlling statute to the contrary. The Court held that an ERISA plan is a contract whereby, through participation in the plan, the participants can be required to agree to both a time limit for bringing lawsuits as well as how to define when that time limit will start to run. Notably, in Heimeshoff, the three-year limitation period began to run when proof of loss was required and before completion of the administrative review process. This decision underscores the importance of including a reasonable time limit in benefit plan documents to shorten otherwise applicable state law limitations periods and to provide uniformity for benefit claim accruals for all participants and beneficiaries.

Factual Background

On August 22, 2005, the plaintiff filed an administrative claim for long-term disability benefits with the administrator of her employer's long-term disability plan (Hartford). In November 2005, Hartford notified the plaintiff that it could not determine whether she was disabled because her physician failed to provide the necessary medical reports. In October 2006, the plaintiff submitted further information, and Hartford denied her claim in November 2006. In May 2007, Hartford granted the plaintiff's request for an extension of the plan's claim appeal deadline until September 30, 2007. On September 26, 2007, the plaintiff submitted her claim appeal along with additional medical evaluations. On November 26, 2007, the plaintiff's claim denial was administratively affirmed.

The long-term disability plan contained a contractual limitations provision, which required a plaintiff to initiate legal action against Hartford within "three years after the time written proof of loss is required to be furnished according to the terms of the policy." On November 18, 2010almost three years after the final claim determination but more than three years after proof...