Erisa Plan Administrators Must Specifically State Time Limits For Seeking Judicial Review In Their Benefit Denial Letters

• Thursday, September 17, 2015
• Category: Tax & Pension Law

In a decision that could potentially have wide-reaching effects, the U.S. Court of Appeals for the Third Circuit has ruled that ERISA plan administrators must specifically state contractual time limits for seeking judicial review in their benefit denial letters or forfeit the ability to fend off claimants’ suits as time-barred.

In Mirza v. Insurance Administrator of America, the court followed both the First and Sixth circuit appeals courts in determining that the notice provisions of the Employee Retirement Income Security Act of 1974 require plan administrators to include litigation time limits in their denial letters. Judge Julio Fuentes, joined by Judges Dolores Sloviter and Joseph Greenaway Jr., said plan administrators may no longer “hide the ball” by burying that information in plan paperwork.

Gary Young, an ERISA plan lawyer with Scarinci Hollenbeck in Lyndhurst, New Jersey, who was not involved in Mirza, said the ruling has the potential to “open the floodgates” for claimants’ cases that otherwise would have been time-barred.

Young said the decision is an attempt by the court to reinforce the remedial and equitable purposes of ERISA by ensuring that each claimant has a fair opportunity to challenge a denial within the plan-imposed time period, which is often much shorter than the statute of limitations.

Fuentes said in Mirza that “the disclosure of a reduced time limitation in a denial letter ensures a fair opportunity to review by making it readily apparent to a claimant that he or she may have only one year—or even much less than that—before the courthouse doors close.”

Reference: Zack Weedles, The Legal Intelligencer (September 2, 2015)

Filed Under: ERISA Plans; Judicial Review of Denial of Benefit

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