Heimeshoff v. Hartford Life & Acc. Ins. Co., 134 S. Ct. 529 (2013), held that a contractual limitation period in an ERISA plan is enforceable as written unless the period is unreasonably short, or a “controlling statute prevents the limitations provisions from taking effect.” In Heimeshoff, there was no dispute that the contractual limitation provision was consistent with the law of the forum state (Connecticut). But what happens when the contractual limitation period is shorter than the minimum period allowed by applicable state law?
Munro-Kienstra v. Carpenters’ Health & Welfare Trust Fund of St. Louis, – F.3d –, 2015 WL 3756712 (8th Cir. June 17, 2016), considered that issue. The health plan in this case required suit within two years of denial, but also stated that the plan should be construed, first, under ERISA, and second, under Missouri law. Plaintiff argued that Missouri law precluded parties from shortening the state’s ten-year statute of limitations for contract actions, and thus prevented the contractual limitation provision from taking effect. The Eighth Circuit rejected that argument.
The court found that reference to the plan’s rules of construction was not necessary. Where the parties chose a limitations period in the plan, there is no need to borrow a state statute of limitations unless the contractual period is unreasonably short or there is a contrary controlling statute. The court noted that plaintiff did not argue that the two-year period was unreasonably short.
Next, the court found that the Missouri law was not a controlling statute. Though parties may specifically choose to incorporate state law into a plan, “they may not broadly contract to choose state law as the governing law of an ERISA-governed benefit plan [quotation marks omitted].” Thus, Missouri law can be controlling only if it is not preempted by ERISA or saved from preemption. The court ruled that the statute plainly “relates to” an ERISA plan, because it would negate the plan’s contractual limitation period, and “risk creating a national crazy quilt of ERISA limitations law, with contractual limitations enforceable in some states but not in others [quotation marks omitted].” The court also rejected plaintiff’s argument that the statute was saved from preemption as a law regulating insurance in this case because the plan was self-insured.