A little over two weeks ago, the Supreme Court heard oral argument in a rather obscure ERISA case—Heimsehoff v. Hartford Life & Accident Ins. Co. The case asks a rather basic question without a readily apparent answer: when a beneficiary of an ERISA-regulated insurance plan seeks to claim benefits, may the statute of limitations period for judicial review of the benefit decision begin before the completion of the plan’s mandatory internal resolution process? In other words, can a statute of limitations for judicial review begin to run before a beneficiary is permitted to file suit?
The problem this lawsuit seeks to address can be clarified through a hypothetical: Imagine beneficiary B has an ERISA-regulated disability insurance plan with (i.e. provided by her employer but issued and administered by) insurer I. B’s contract with I states that a three-year statute of limitations for judicial review of benefit decisions begins running at the date that B sends I proof of loss. Then the following takes place:
- B sends I her proof of loss on January 1, 2010.
- I’s internal resolution process is completed on January 2, 2013, and B is denied her claim.
- B believes the decision was erroneous and seeks to challenge it in court.
- The court informs B that she has no claim because the statute of limitations—three years from January 1, 2010, the date that B sent I her proof of loss—has run.
B’s case certainly seems rather compelling. After all, I has functionally denied B any opportunity to receive independent review of I’s benefit decision. But at oral argument, the Justices raised several interesting arguments that make the outcome of this case far from clear.