Regulations

Subscribe to Regulations via RSS

Cultrona v. Nationwide Life Ins. Co., 748 F.3d 698 (6th Cir. 2014), involved the denial of benefits under an accidental death policy on the ground that the plaintiff’s husband’s death was excluded due to his intoxication. The court found that determination to be reasonable.

But the court also affirmed the district court’s determination…

In Heimeshoff v. Hartford Life & Acc. Ins. Co., 571 U.S. __ (Dec. 16, 2013) , the Supreme Court held that a contractual limitation provision under which the clock begins to run before administrative remedies are exhausted  is enforceable under ERISA, as long as a reasonable time is left after exhaustion is expected to occur.

Julie Heimeshoff filed a claim with Hartford for benefits under a disability plan established by WalMart. The plan provided that litigation must be commenced within three years after proof of loss was due. The Court noted that, under applicable ERISA regulations, the typical ERISA claim would be fully administered in about a year, perhaps as long as 16 months. Thus, one would ordinarily expect a claimant to have 1-1/2 to 2 years to bring suit after a claim was fully administered.

When Heimeshoff’s claim was fully administered, she had about 1 year left under the limitation provision to sue. But she waited almost three years, making her suit almost 2 years late under the contractual provision. Hartford and WalMart moved to dismiss Heimeshoff’s action as untimely, and the District of Connecticut agreed, applying Second Circuit precedent enforcing an identical limitation provision. Heimeshoff appealed, and the Second Circuit affirmed on the same basis. The Supreme Court granted certiorari to  resolve a split in the circuits regarding the enforceability of a contractual limitation provision that starts to run before administrative remedies are exhausted. (The District Court and the Second Circuit also found that Heimeshoff could not establish a basis for equitable tolling of the limitation period; the Supreme Court declined to grant certiorari on that question).

The Supreme Court unanimously affirmed the dismissal of Heimeshoff’s action.
Continue Reading Heimeshoff v. Hartford Life: Supreme Court Holds that Plan Can Start Limitation Clock Before Benefit Claim Accrues

The Supreme Court heard arguments yesterday in this case, which involved the question whether a contractual limitations period in an ERISA benefit plan could begin to run before administrative remedies were exhausted.
Continue Reading Heimeshoff v. Hartford – Oral Argument in the Supreme Court

At the District Court, Heimeshoff also argued that the limitation period in the plan should be equitably tolled because, she claimed the applicable ERISA regulation required Hartford to disclose the limitation period in its denial letter, and it failed to do so. Hartford argued that it was irrelevant whether the regulation required disclosure because Heimeshoff and her attorney knew what the plan said, and their knowledge precluded them from seeking equitable tolling. Hartford also argued that the regulation did not require disclosure.
Continue Reading Hartford v. Heimeshoff – ERISA Regulations and Equitable Tolling

Hartford moved to dismiss the action because it was filed after the expiration of the policy’s contractual limitation period. The plain language of the Policy gave her until December 8, 2005 to submit proof of loss: she alleged that her disability began on June 6, 2005; the ninety-day Elimination Period would ordinarily end on September 6, 2005, but her Elimination Period lasted two days longer because Wal-Mart made salary continuation payments to her until September 8, 2005; the start of the period for which Hartford would owe payment (if Heimeshoff had proven disability) was September 9, 2005; proof of loss was due ninety days later, or December 8, 2005. The deadline for taking legal action was therefore three years after that, or December 8, 2008.
Continue Reading Heimeshoff v. Hartford – Motion to Dismiss

Any ERISA claim practitioner knows that a claimant is entitled to get a copy of the documents relevant to her claim on request and without charge. But when does the claimant’s right to this access become effective? More particularly, can the claim administrator defer production until after the claimant files an administrative appeal? A recent case in the Second Circuit suggests that it is sufficient to provide the claim file promptly after the appeal is filed. James v. Unum Life Ins. Co. of America, 2012 WL 4471541 (S.D.N.Y. 2012), aff’d, 2013 WL 4516424 (2d Cir. Aug. 27, 2013).
Continue Reading When Must a Claim Fiduciary Provide the Administrative Record? It May Be Later Than You Think

In Koehler v. Aetna Health, Inc., 683 F.3d 182 (5th Cir. 2012), the Fifth Circuit criticized a health insurer for having an SPD that mirrored the plan, and held that Cigna v. Amara did not prevent the terms of the SPD from impacting plan interpretation.

The plaintiff, a participant in an HMO, suffered from sleep apnea, for which her physicians recommended treatment by an outside specialist. Aetna denied covered for the treatment, asserting that the plan required pre-authorization for an outside referral. The parties’ dispute centered around a specific provision in the Certificate of Coverage (“COC”), which the court found was ambiguous with respect to the need for pre-authorization for outside services rendered on an ad hoc basis.

The court noted at the outset something that is common in recent-vintage plans: the plan functions as an SPD. As the court explained: “in addition to appearing in the plan, the COC’s text also constitutes the ‘summary plan description’ which ERISA requires plan administrators to provide to participants and beneficiaries. Thus, although a plan summary is a separate document from the plan itself, in this case the summary’s text is simply a verbatim copy of the underlying plan provisions.”
Continue Reading Including Ambiguous Plan Language Verbatim In the SPD Can Effectively Eliminate Discretion to Interpret It — At Least in the Fifth Circuit

In Schorsch v. Reliance Standard Life Ins. Co., — F.3d — ,  2012 WL 3667977 (7th Cir. Aug. 28, 2012), the court “considered here whether the content of a termination notice, specifically the absence of particular information, caused the beneficiary’s failure to exhaust and whether [he is]  estopped from taking advantage of that failure.” The court found that the district court did not abuse its discretion in concluding that “the beneficiary offered no evidence of reasonable reliance on the absent information and that even if the notice was deficient, the alleged deficiencies were not material.”
Continue Reading Failure to Exhaust Administrative Remedies Not Excused Even When Termination Notice Is Defective