Tuesday, August 27, 2013

The ERISA time machine: when your claim is denied the clock is ticking faster than you know

ERISA, in addition to drastically limiting the remedies you might secure in the unlikely event you are able to prevail on a benefits claim in court, imposes strict deadlines for you to act in response to a denied claim. If you fail to keep careful track of the calendar, your claim — regardless of how strong it may be on the merits — could very well perish simply because of the passage of time.

You’ll need to be careful in at least two respects: the time limit for submitting an internal appeal to the ERISA “insurer” who just denied your claim, and the time limit for filing you complaint in court after that. Blow either deadline and you’re out of luck.


1. You must submit the internal appeal within either 60 or 180 days of claim denial

Federal regulations require that ERISA “insurers” give you at least 60 days (in the case of non-health or disability claims, e.g., life or accidental death insurance) or 180 days (in the case of health or disability claims) after a denial to submit an internal appeal — a reconsideration by the “insurer” as to whether it should continue to pay benefits, and thus reduce its profits. Humanitarians that they are, ERISA "insurers" always do the bare minimum, and so the 60- or 180-day minimums are effectively the maximums as well. So, unless your benefit plan is exceedingly rare, you’ll have either 60 or 180 days to get that appeal in.

As we’ve seen, the “insurer” has its own deadlines to respond once your appeal is submitted, with one big difference: if you blow your deadline, you are out of luck, but if the “insurer” blows its deadline … well, everybody makes mistakes, right? Bottom line: the “insurer” can miss its deadline with no meaningful consequence, but if you miss your deadline, game over. So be careful with that deadline.


2. You must file your lawsuit within the statute of limitations – whenever that is

ERISA, model of clarity that it is, doesn’t impose a deadline for filing a lawsuit to try to recover the meager remedies it allows. So, no worries, right?

Wrong. Just because ERISA doesn’t have a deadline doesn’t mean we can’t come up with one anyway, so that claimants who wait too long to file their lawsuit can be unceremoniously ejected from court. So, at the behest of ERISA “insurers,” courts have decided to just borrow a time limit from state law, and apply that, never mind that ERISA doesn’t have a time limit of its own.

OK, so at least we can just check the law of our state to figure out what the deadline is, and then at least we’ll know.

Wrong again. ERISA “insurers” insert time limits into their “insurance” policies, and the courts generally allow this, so your deadline to file your lawsuit is … whatever the “insurer” says it is.

A pending Supreme Court case, Heimeshoff v. Hartford, will decide what the outer limits are on an “insurer’s” ability to just impose its own deadline on your ability to pursue remedies in the federal courts your tax dollars pay for. So we’ll know a bit more about that before too long.

One thing you can count on is that if you miss the deadline, whatever it is, for filing your lawsuit, you are out of luck from the get-go. It’s a deal-breaker. A death-knell. The fat lady singing.

So, it’s important in an ERISA case to pay very close attention to time limits. Miss one by even a day and your claim is over before it starts. Indeed, it never really starts at all.

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