ERISA does not have a statute of limitations for lawsuits brought by participants to check claim benefits under the plan. Instead, courts borrow from similar state statutes of limitations. In a decision two years ago, the US Supreme Court upheld a disability plan’s one year limitations period, allowing the plan to impose that limitation rather than the longer period of time that state law would have allowed. In light of that decision, employers have added a limitations period to their claims procedures.
Employers who have done so should make sure to include the limitations period in the plan document, the summary plan description, and any claim denial letter. In a recent Third Circuit Court of Appeals decision, the employer had included the deadline for filing a lawsuit in the plan document but neglected to mention it in the claim denial letter which informed the participant that he could now file a lawsuit. The court said the plan deadline was not enforceable because it had not been included in the denial letter. Instead, the court applied the general six year statute of limitations borrowed from New Jersey law and held that a lawsuit brought 19 months after the claim denial was timely.
Employers wanting the benefits of a shorter deadline for filing lawsuits for plan benefits should make sure to reiterate that deadline in claim denial letters.