Filing an ERISA claim and receiving benefits is not an overnight process, and the ERISA administrative appeal procedure alone can take up to a year. Here’s what anyone filing an ERISA claim should know about the administrative appeal process and the statute of limitations.
Under federal law, a claimant cannot bring a claim under judicial review until an internal review is carried out. This internal review, or presuit administrative appeals procedure, begins when a claimant submits their proof of loss. At that point, the Plan has a set amount of time to carry out an internal review before the claim is taken to a judicial court. How does this work?
- The Plan has 45 days to make adverse benefit determination (i.e. to determine that benefits are not a medical necessity to the claimant or that the claimant is not eligible for benefits for any other reason).
- The Plan may use two 30 day extensions based on elements outside of their control, such as a claimant’s failure to submit documents necessary to make a decision based on their claim.
- The claimant must appeal a denial of their claim within 180 days of that denial.
- The Plan has 45 days to resolve any appeal with one 45 day extension.
The Statute of Limitations for Civil Action
Claimants need to pay close attention to the timeline for filing a lawsuit, because the statute of limitations for civil actions in ERISA cases has recently changed. As I mentioned before, statute 502 (a)(1)(b) requires that a claimant exhaust the internal review process before bringing their case under judicial review. ERISA does not provide a statute of limitations for actions under 502 (a)(1)(b), but a specific ERISA plan may have a limitation provision that goes into effect as soon as an individual files their claim.
Previously, the Supreme Court has been divided on whether an ERISA plan limitation provision is enforceable during the internal review process. Since the internal review process can take a year or more, it may use up a substantial amount of the claimant’s limited time to file a lawsuit. In 2013, the Supreme Court resolved this issue by ruling that a three year contractual limitation on an ERISA plan is enforceable, and the three year statute of limitations is measured from the time an individual files their claim (including the internal review process).
Claimants who are worried that the Plan is dragging out the ERISA administrative appeal procedure or otherwise trying to stop them from filing a lawsuit within the three year period should meet with an experienced ERISA attorney as soon as possible or read our free eBook to learn more.