Court refuses to enforce plan-imposed restriction periods not stated in benefit denial notices

EF v. United HealthCare Ins. Co., 2022 WL 957200 (D. Utah 2022); Anne A. v. United HealthCare Ins. Co., 2022 WL 957199 (D. Utah 2022)


Anne a.

In two nearly identical rulings, a federal court ruled that the scheduled filing deadlines did not apply because they were not set out in final letters of refusal to the participants. While the cases involved separate ERISA plans (one fully insured and one self-insured) sponsored by different employers, both plans involved denials by the same entity (as insurer for the insured plan and claims administrator for the self-insured plan). Both participants were represented by the same law firm and the judge was the same in both cases. The insurer/claims manager has asked the court to dismiss each lawsuit for failure to file within the timeframe specified by the plan.

The court noted that, in general, schedule provisions that set a deadline for filing a lawsuit will apply, provided they are reasonable (see our Checkpoint article). The participants argued that the deadlines of the respective plans should not apply because they were not disclosed in the denial of benefits notices, which, according to the ERISA Rules on Claims Procedures, must “describe the assessment procedures of the plan and the time limits applicable to such proceedings, including a declaration of the claimant’s right to initiate civil proceedings.” Applying the analysis of various courts (see, for example, our Checkpoint article), the court reasoned that the use of the word “inclusive” in that provision indicates that lawsuits are among the review procedures for which notices of denial must specify time limits. /claims manager argued that this reasoning no longer holds true in light of subsequent changes to the claims procedure rules, which added an express requirement that plans providing disability benefits must include any deadline imposed by the plan for filing a lawsuit in their final denial notices But according to the court, those changes simply added a separate requirement for disability claims without disrupting existing notification requirements for all benefits denials when it determined that the time limits imposed by the plan did not apply. n applicable, the court turned to the state’s most comparable statute of limitations, which is six years. Since the lawsuits were filed within that time frame, both were allowed to continue.

Commentary from EBIA: Without a plan-specific lawsuit filing deadline, a plan may be subject to varied and lengthy state statutes of limitation. But setting the deadline may not be enough if it isn’t communicated adequately to plan participants. To maximize the likelihood of enforcement by courts, the plan deadline should be stated in denial notices and in the EPD. For more information, see EBIA’s ERISA Compliance Manual in Sections XXXIV.E.7 (“Notification of Adverse Benefit Determination (All Types of Health Claims)”) and XXXVI.E (“Time Limits for Submission of Benefit Claims: Statute of Limitations” ). See also EBIA’s Self-Insured Health Plans manual in sections XXVI.D (“Documentation for Group Health Plan Claims Procedures”) and XXVI.J (“Procedures”).

Contributing Editors: EBIA Staff.

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