The courts are expecting more detail in your denial letters about the limitations period.

Here’s the case of Mirza v. Insurance Administrator of America, Inc.., No. 13-3535 (3rd Cir. August 26, 2015)(“One very simple solution, which imposes a trivial burden on plan administrators, is to require them to inform claimants of deadlines for judicial review in the documents claimants are most likely to actually read—adverse benefit determinations.”)

FACTS: Dr. Neville Mirza performed back surgery and received an assignment to receive ERISA benefits for surgery expenses. Dr. Mirza submitted the $34,000 claim, which was denied because the surgery was “medically investigational.” The denial letter informed Mirza of his “right to bring a civil suit under ERISA” if he was not content with this final decision. The denial letter did not state that he had one year from the date of the final benefit denial to seek judicial review. Dr. Mirza sued 19 months after getting the denial letter.

ISSUE: Was the Claim Time Barred by the Plan’s Limitation Period?

3rd CIRCUIT HELD: NO

1. ERISA “does not prescribe any limitations period for filing … an action [and we] borrow the statute of limitations from the most analogous state-law claim.” Op. at 8.
2. The plan substantially narrowed [the state law statute of limitations period] of six years to one….[T]his was likely reasonable as a matter of contract law[.]” Op.at 14.
3. “Mirza’s suit is facially time-barred [and his claim] is therefore doomed unless he can persuade us of a reason to toll or set aside the plan’s contractual deadline.” Op. at 9.
4. The “plain language” of ERISA regulations requires that “the administrator must disclose the plan’s applicable time limits.” Op. at 11-12.
5. “In addition to the regulatory text and the relevant decisions… practical considerations also support interpretation of the regulation…[P]lan administrators could easily hide the ball and obstruct access to the courts. The ERISA plan at issue here is ninety-one pages. The one-year time limit is buried on page seventy-three of the plan.” Op. at 12.
6. “One very simple solution, which imposes a trivial burden on plan administrators, is to require them to inform claimants of deadlines for judicial review in the documents claimants are most likely to actually read—adverse benefit determinations.” Op. at 14.
7. ERISA regulations require “that adverse benefits determinations set forth any plan-imposed time limit for seeking judicial review. Without this time limit, a notification is not in substantial compliance with ERISA.” Op. at 16
8. “‘When a letter terminating or denying Plan benefits does not explain the proper steps for pursuing review of the termination or denial, the Plan’s time bar for such a review is not triggered.’” Op. at 18.
9. The Third Circuit joins the Sixth Circuit and First Circuit in this approach.