The Wagner Law Group
Wagner Law Group, A Professional Corporation, is a nationally
recognized ERISA & employee benefits, estate planning,
employment, labor & human resources practice.
in 1996, The Wagner Law Group has 22 attorneys engaged
exclusively in employee benefits, estate planning and
employment law. Six of our attorneys are AV rated by
Martindale-Hubbell as having very high to preeminent legal abilities
and ethical standards. The firm is among the largest ERISA boutiques
in the country. Our practice is national in scope, with clients in
more than 40 states and several foreign countries.
Wagner Law Group
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September 3, 2015
Health and Welfare Law
Federal Court Rules that Plan
Must Provide Notice of Limitation Period in Benefit Denial Letter
Third Circuit Court of Appeals has ruled that ERISA requires plan
administrators' adverse benefit determination notices to explain any
plan-imposed time limit for seeking judicial review and that any
notification that fails to disclose such a time limit is
noncompliant. In Mizra v. Insurance Administrator of America, Inc.,
the court imposed this requirement on an employer that sponsored an
ERISA-covered plan that imposed a one-year time limit for judicial
review of an adverse benefit determination.
Law. Section 502(a) of ERISA grants claimants the
right to sue plan administrators in federal court to recover benefits
due under the terms of the plan. However, Section 502(a) does not
provide an applicable statute of limitations. In response, courts
have determined that plan administrators and fiduciaries may create
their own, reasonable time limit for judicial reviews. When a plan
does not impose such a time limit, courts uniformly apply the statute
of limitations for the most analogous state-law claim.
Background. In Mizra, an employer's ERISA-covered
plan required claimants who received benefit denials to appeal the
determination through an internal appeal process. Further, the plan
provided a one-year time limit for claimants to sue for benefits
following the plan administrator's final claim denial.
the final denial of the plaintiff's claim, the plan administrator
sent a letter to the plaintiff which explained the denial and stated
that he had a right to bring a civil action under ERISA Section
502(a) if he was not satisfied with the final determination. However,
the letter failed to explain to the plaintiff that he had one year
from the date of final denial to file suit.
plaintiff did not sue the plan administrator to recover benefits until
19 months after the final determination. As a result, the district
court dismissed the plaintiff's claim, finding that it was barred by
the plan's one-year limitation period. In response, the plaintiff
appealed the district court's decision to the Third Circuit.
Circuit. The Third Circuit
focused its analysis on whether the plan administrator had violated
ERISA by failing to disclose, in the denial letter, the plan-imposed
one-year time limit for seeking judicial review. Specifically, the
court found that the applicable ERISA regulations required the plan
administrator's adverse benefit determination to not only explain the
claimant's right to sue, but also to include the time limit for
bringing such a lawsuit. The court noted that both Courts of Appeals
that had previously addressed the issue (i.e., the Sixth
Circuit in 2014 and the First in 2011) had similarly concluded that
ERISA required disclosure of the plan-imposed time limit.
Third Circuit set aside the plan's one-year limitation period.
Instead, it applied the applicable statute of limitations for breach
of contract actions under state law, which was six years. It then
ruled that the plaintiff had, therefore, filed a timely lawsuit.
Steps for Employers. Employers
that sponsor ERISA-covered plans that impose a time limit for
bringing a lawsuit must be sure to explain such time limit in all
adverse benefit determination notices. By doing so, employers will
ensure compliance with ERISA with regards to plan-imposed time
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