Supreme Court ERISA case has implication for disability insurance claims

Disability insurance protects employees from suffering financial ruin in the event that they become unable to work due to an injury or an illness. When someone has disability insurance and becomes disabled, the policy will typically pay out some portion of that person's pre-disability income. However, as with many kinds of coverage, insurance companies have an incentive to deny claims to protect their own bottom line. Unfortunately, many workers have to fight back against insurers after a disability claim denial to secure the money they are entitled to.

ERISA is a complicated federal statute that applies to, with certain exceptions, claims arising out of disability insurance provided by an employer. Unfortunately, ERISA does not always serve the best interests of the insured. A new Supreme Court case concerning adverse benefit determinations for disability claims under ERISA demonstrates the potential pitfalls in the context of the statute of limitations.

Plaintiff passed deadline for filing lawsuit after pursuing administrative remedies

The plaintiff in Heimeshoff v. Hartford Life Accident Insurance Co. et al ceased working when she became disabled by pain, fatigue and lack of concentration brought on by lupus and fibromyalgia. She filed a disability claim with her disability insurer, but was asked to provide more information about her diagnosis.

The plaintiff provided the documentation, and again supplied further evidence when a subsequent request was made, and was again denied because the insurer said she could still perform her job functions. As she was required to do, she appealed the claim denial administratively through the insurer, but was unsuccessful.

That is when the plaintiff turned to the court system. She filed a lawsuit seeking review of her denied long-term disability benefits under ERISA.

However, there was a problem. Years had passed while the plaintiff appealed her claim administratively, and a provision in the disability insurance policy said that a lawsuit could only be filed within three years. The plaintiff did file within three years of her final denial by the insurer, but it was more than three years since - per the language of the policy - "written proof of a disability [was] first required and requested."

At the trial court level, the action was dismissed on the grounds that the three year limitation period had been surpassed, and this decision was affirmed on appeal. Finally, the case made it to the Supreme Court, which affirmed the lower court rulings. This decision was important because it settled a split among lower courts about whether a limiting period in a disability policy can begin prior to the point at which the plaintiff has received a final claim denial and exhausted all administrative remedies.

For you, the ruling means you need to take legal action sooner rather than later

The new Supreme Court ERISA case on disability benefits is a tough break for the plaintiff involved. It is now more important than ever to consult with an attorney knowledgeable about ERISA, as future disability claimants now know they must file their legal actions quickly in order to take advantage of the avenues for relief offered through the legal system.

If you are pursuing a disability claim, this means that you should contact an attorney as soon as possible. Your lawyer can guide you through the process of making a disability claim and can ensure that you pursue the full legal remedies available in a timely fashion.