If your employer-provided long-term disability insurance company denies your claim for monthly benefits following an administrative appeal, you have the right to sue the company in federal court. However, there may be a time limit within which you have to file this lawsuit.
The rules in this area are governed by provisions called statutes of limitations. While the Employee Retirement Income Security Act of 1974 (ERISA) does not contain a statute of limitations itself, state laws may impose their own binding limitations. Additionally, disability insurance policies may contain clauses that impose even shorter deadlines.
What Is a Statute of Limitations?
A statute of limitations is a provision that limits the amount of time you have following a potential instance of wrongdoing (such as a wrongful insurance claim denial) to file a lawsuit against the individual or entity who committed the act. Statutes of limitations apply in all kinds of civil and criminal matters, and vary widely depending on the jurisdiction and the nature of the alleged offense. Serious criminal offenses, such as murder and war crimes, generally have longer statutes of limitations, while relatively short deadlines apply to many types of civil cases.
These statutes can be controversial, as in many cases they protect civil and criminal offenders purely because a certain amount of time has passed since their wrongdoing. However, they have survived in most legal jurisdictions because of the practical difficulties associated with trying cases long after the relevant events have occurred. Evidence-gathering becomes more difficult as time passes, and the memories of people who might serve as witnesses begin to fade.
Does ERISA Contain a Statute of Limitations? What Other Deadlines May Apply?
ERISA itself does not contain any statute of limitations for long-term disability insurance claims under Section 502(a)(1)(B), which deals with civil enforcement. However, state laws may impose statutes of limitations that will apply, and these are enforced by the courts. Additionally, disability insurance policy documents often specify contractual limitations past which claimants cannot file lawsuits, and these are often shorter than their equivalent provisions under state law.
Employer-sponsored disability insurance contracts frequently specify that no lawsuit filing is possibly more than three years after proof of loss is initially due during the claims process. Proof of loss is a term defined by these policies; it usually comprises evidence of your disabling illness or injury, such as medical records or reports from vocational experts.
The US Supreme Court has confirmed that ERISA disability insurers are entitled to shorten the period of limitations set out in state law. In the case of Heimeshoff v. Hartford Life & Accident Insurance Co., the high court stated that any limitations the two parties agree to are enforceable, if “reasonable.” In the same case, the Supreme Court stated that employers purchasing ERISA plans have a large degree of freedom to tailor plan provisions as they see fit.
It’s important to note that proof of loss may become due before the mandatory administrative appeals process set out by ERISA is completed. Following an initial claim denial, you have a period of time (usually six months) within which to submit this administrative appeal, and you are generally not entitled to file a federal lawsuit against your ERISA long-term disability insurer until it rejects this appeal. So, the time spent on this process must be subtracted from the limitation period for the filing of a lawsuit. If you have more questions you can talk to our Boston ERISA Attorneys.
ERISA Section 413
There is also a statutory limitation period under Section 413 of ERISA which states that no legal action challenging a potential “breach of any responsibility, duty, or obligation” on the part of a fiduciary is possible:
- Six years after the last act that formed part of the alleged breach of duty,
- Six years after the last date on which an omission that allegedly constituted a breach of duty could have been remedied, or
- Three years after the plaintiff gained “actual knowledge” that the breach of duty had occurred.
Getting the Legal Assistance You Need With Your Long-Term Disability Insurance Dispute
Whether you’re struggling with an ERISA statute of limitations issue or another problem related to a claim for monthly disability insurance benefits, seeking expert legal assistance is the only way to get the clarity you need. Our expert attorneys deal with the complexities of ERISA cases and the sneaky tactics of disability insurance companies every day, so we’ll be able to address any problems you encounter.
Contact DarrasLaw today to schedule a free initial policy analysis, claim assistance, or help with your appeal. If you’ve already received an initial denial of a claim on an employer-sponsored long-term disability insurance policy, you need to start the mandatory administrative appeal process as quickly as possible to make sure you submit a timely, thorough and comprehensive appeal.