No matter where you live, if you have a long-term disability policy covered by the Employee Retirement Income Security Act of 1974 (“ERISA”), your claim for benefits is governed by the same ERISA Regulations. That’s because ERISA is a federal law and it preempts any state law claims that might otherwise apply to your contractual right to benefits. Why is this important?
If you have a denied short or long-term disability benefit claim, you must first appeal that denial to the claims administrator within 180 days of your receipt of the denial letter (180 days from the date of the denial letter to be safe). Failure to do so will result in you losing your right to further pursue your claim. Courts enforce these time frames strictly against claimants. Once a claims administrator receives your appeal, it must make a decision within 45 days. It can take a 45-day extension provided it informs you of special circumstances before the expiration of the first 45 days.
Even though a court will toss out a claim due to a claimant’s failure to submit an appeal on time, courts are generally more forgiving of claims administrators who do not make timely decisions. Refreshingly, however, two recent court decisions did hold the insurance companies strictly to the 45-day deadline.
In Wiley v. Prudential Ins. Co. of Am., No. 16-CV-00391 (APM), __F.Supp.3d__, 2016 WL 4468155 (D.D.C. Aug. 24, 2016), Judge Amit P. Mehta denied Prudential’s motion to dismiss the long-term disability lawsuit on the ground that Wiley failed to exhaust her administrative remedies before filing suit. Wiley had submitted an appeal and subsequently supplemented her appeal with additional medical records. Prudential granted itself extensions of time that Wiley did not agree to nor were permitted under the applicable ERISA regulations. The court found that the 45-day deadline started when Wiley submitted her appeal and it did not matter that she continued to supplement her appeal with additional evidence. Prudential did not request a 45-day extension prior to the expiration of the initial 45-day deadline so it had to make a decision within the first 45 days.
In Perry v. Metro. Life Ins. Co., No. 4:16-CV-135 (CDL), 2016 WL 4536441 (M.D. Ga. Aug. 30, 2016), Judge Clay D. Land, found that Perry had submitted her appeal on the date that she sent the appeal letter via facsimile, even though MetLife did not receive the supporting documents until nearly a week later. The court determined that MetLife did not render a decision on Perry’s appeal within 45 days of its receipt of the appeal and it did not seek, in writing or otherwise, an extension of time to review Plaintiff’s appeal prior to the 45-day deadline. As such, Perry was deemed to have exhausted her administrative remedies and could file suit.
In sum, if an insurance company does not make a decision on your appeal within 45 days and does not, before the expiration of the 45 days, send you a letter stating special circumstances warranting an extension, you will be deemed to have exhausted administrative remedies and can file a lawsuit. Filing a lawsuit immediately may not be in your best interest, especially if the insurance company gets a report from another doctor on appeal that you might want to rebut (and have that rebuttal in the record). Even if a court decides that your lawsuit was proper, it may still consider and defer to the claims administrator’s final decision.
If you have a denied short or long-term disability benefit claim, it’s important to consult with experienced ERISA attorneys to determine the best strategy for your particular case.