The ERISA Statute of Limitations for a Benefit Claim
Time limits are important in all types of employment claims and vary depending on the type of claim. For example, the Age Discrimination in Employment Act at 29 USC section 621 et seq., provides that a civil action cannot be filed until 60 days after a charge alleging unlawful discrimination has been filed with the EEOC, and that such charge must be filed within 180 days after the unlawful act. Then one must file suit within 90 days of any right to sue letter from the EEOC. A civil action may be commenced two years after the cause of action accrued; unless the other is a willful violation of the act, which then allows action to be commenced three years after it accrued. A bit more complicated than the two-year statute of limitations for a personal injury claim arising from negligence, but at least there is a statute to reference.
However, with benefit claims under ERISA, there is no statutory limitation of civil actions. As a result, the plan document may establish a contractual limitation of action which will be enforced by the courts.
Therefore, it is critical to obtain the plan document before proceeding with any civil action. In the absence of a limitation of action in the plan document, courts are left to federal common law for a statute of limitation. In fact, whenever ERISA is silent on matters of limitation or contract interpretation, the courts look to federal common law. Dixon v. Life Ins. Co. of N. Am., 389 F.3d 1179, 1183 (11th Cir. 2004). One of the first places the courts look for federal common law is state law. The court considers the most analogous state law statute in ascertaining what limitation of action should apply. As to contract interpretation issues, courts likewise refer to the most analogous coverage dispute holdings under state law. Tippitt v. Reliance Standard Life Ins. Co., 457 F.3d 1227, 1234-35 (11th Cir. 2006); Horton v. Reliance Std. Life Ins. Co., 141 F.3d 1038, 1041 (11th Cir. 1998). The 11th Circuit has blessed this approach as long as it furthers ERISA’s goals of protecting the interests of employees and beneficiaries, and provides uniformity in the administration of benefit plans. See, Buce v. Allianz Life Ins. Co., 247 F.3d 1133, 1140 (11th Cir. 2001) (“federal courts to create federal common law to implement Congress’ statutory scheme”) and Tippitt, at 1235.
So, how is the statute of limitations for an ERISA benefit plan determined?
1. First, obtain the plan document and scour it for a limitation of action provision. This can be a rather short time frame – such as 60 days after the last benefit refusal or denial.
And it can be confusing – such as three years from the date the proof of loss report was required. Proof of loss may be required by whatever deadline is contractually set, such as 90 days after that the claim accrued. It may permit up to one year if circumstances justify. So the limitation of action under these assumed facts might be anywhere from three years and 30 days to four years. But, what if the individual was on claim for several years? For example, how is it calculated for someone whose claim was terminated after five years on claim? It depends on the facts. The U.S. Supreme Court has not provided much guidance other than that a suit should be filed within a reasonable time after claim remedies are exhausted. Well, that’s vague. It’s a good idea to ask the plan administrator for its interpretation of the deadline. If it refuses, that may provide justification for what may otherwise be considered a late filing.
2. Second, if the plan document is silent, what does state law provide for the most analogous claims?
For companies operating in several states, what state law should be utilized? Again, look to the plan document for a choice of law provision. Yes, ERISA preempts state law claims, but the plan document may nonetheless apply state law for gaps in ERISA like the statute of limitations.
3. If there are more than two state laws that could potentially qualify as being the most analogous statute, then look for prior cases applying those statutes.
Usually, it is a breach of insurance contract statute. And of course, to be completely safe, it is best to calculate all analogous statutes, and then use the earliest. Additionally, a lawsuit is filed only after all claim remedies have been exhausted or the futility of proceeding further with claim remedies can be demonstrated.
Confusing, isn’t it? Don’t worry. Let the experienced disability lawyers at The Martin Law Group worry. This is the world in which we live. Contact our ERISA disability attorneys today.