The U.S. Supreme Court has handed down a unanimous ruling in favor of benefits plans and their sponsors in Heimeshoff vs. Hartford Life and Wal-Mart Stores Inc. (Case Number 12-729), a case involving a group long-term disability (LTD) insurance plan.
The court held that a group LTD plan governed by the Employee Retirement Income Security Act (ERISA) can impose a “statute of limitations,” or time limit on the filing of lawsuits, that starts while a worker who is seeking benefits is still going through the plan’s own appeals process.
Justice Clarence Thomas notes in an opinion explaining the ruling that ERISA says nothing about times on challenges of plan decisions.
In the Heimeshoff vs. Hartford Life case, the plan participant, the employer and the plan administrator agreed to a three-year limitations period in the plan contract, Thomas writes.
“The contract specifies that this period begins to run at the time proof of loss is due,” Thomas says.
The contract required the plan participant to establish proof of loss before the plan’s internal claim review process was completed. The plan participant said the provision violated the rule that statutes of limitations should start “upon accrual of the cause of action.”
“We reject that argument,” Thomas says. “Absent a controlling statute to the contrary, a participant and a plan may agree by contract to a particular limitations period, even one that starts to run before the cause of action accrues, as long as the period is reasonable.”
The majority of states require at least some insurance policies to have three-year limitations periods that run from the date proof of loss is due, and there is no evidence that those requirements keep courts from reviewing claim appeals, Thomas says.
Julie Heimeshoff, the plan participant in the Heimeshoff case, worked in public relations at Wal-Mart. In August 2005, she filed a group long-term disability (LTD) insurance claim, saying that lupus and pain from fibromyalgia kept her from working.
Hartford denied the claim in November 2006. Heimeshoff appealed in September 2007. She said Hartford denied the claim again in November 2007.
Heimeshoff filed a suit against her employer and the insurer in November 2010 in the U.S. District Court in Connecticut.