Santana-Diaz appealed from the district court’s ruling that his suit was time barred by the three-year limitations period in MetLife’s policy. The First Circuit reversed because MetLife’s benefit denial letter did not advise Santana-Diaz of the contractual limitations period. The court, interpreting 29 C.F.R. §2560.503-1(g)(1)(iv), held that “a denial of benefits letter must include notice of the plan-imposed time limit for filing a civil action.” The failure to comply is alwaysprejudicial to the claimant, and therefore renders the contractual limitations period inapplicable.
The Third and Sixth Circuits also require ERISA insurers to advise claimants of a contractual limitations period when communicating an adverse benefit decision. Mirza v. Ins. Administrator of America, Inc., 800 F.3d 129 (3d Cir. 2015); Moyer v. Metropolitan Life Ins. Co., 762 F.3d 503 (6th Cir. 2014). These rulings are well reasoned and likely to be followed across the country. ERISA insurers that wish to enforce contractual limitations periods are well-advised to comply, and should be aware that this notice requirement applies “even when the information is also contained elsewhere in the plan documents, and regardless of when the claimant last received a copy of the plan documents.”
For claimants, Santana-Diaz is a positive development but provides no assurances in ERISA’s often unforgiving landscape. Sophisticated insurers will quickly adapt, while their experienced counsel challenge the reach of this authority. Claimants should adhere to an ERISA plan’s limitations period whenever possible, recognizing expired deadlines may be overcome when absent from the insurer’s decision letter.
Keywords: insurance, coverage, litigation, ERISA, disability
Benjamin C. Hassebrock is with Ver Ploeg and Lumpkin PA, Miami.