Federal District Court Rules Plan-Imposed Limitations Periods Unenforceable When Not Disclosed in Benefit Denial Notices

A federal district court in Utah has held in two similar cases that plan-imposed deadlines for filing lawsuits in ERISA cases are unenforceable. The court reasoned that the deadlines were inapplicable to the cases at issue because the entity’s final denial letters to the participants did not contain notice of the deadlines.

The cases are E.F. v. United HealthCare Ins. Co.2022 WL 957200 (D. Utah 2022) and Anne A. v. United HealthCare Ins. Co., 2022 WL 957199 (D. Utah 2022). 

In general, plan provisions that impose deadlines for filing lawsuits are enforceable as long as they are reasonable. ERISA’s claims procedures regulations, which applied to the plans in each case, state that benefits denial notices must contain “a description of the plan’s review procedures and the time limits applicable to such procedures, including a statement of the claimant’s right to bring a civil action.” The court relied on the decisions of appellate courts in concluding that lawsuits are one of the review procedures referred to in the ERISA regulation that benefits denial notices must include. 

Since the court determined that the plan-imposed filing deadlines did not apply in these cases, the court looked to the most closely related statute of limitations under state law, which was six years. Since the plaintiff in both cases had filed their lawsuits within the six-year statute of limitation, the court ruled that the plaintiffs could proceed with the lawsuits in each case. 

If a plan does not disclose a plan-imposed filing deadline for lawsuits, the plan risks the deadline being unenforceable. This situation can lead to lawsuits being subject to varying statutes of limitations under the laws of different states. Plan administrators can avoid these results by including plan-imposed deadlines in benefits denial notices and the Summary Plan Description (SPD). 

HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.

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