Insurance Coverage – Denial Letter In Erisa Plans Must Set Forth Statute of Limitations

By: Donna Russo, Esq.

ERISA claims are typically litigated in the federal courts. ERISA is federal law. Although state courts can decide ERISA claims under federal law, very few claims proceed in state court because the insurance carrier’s attorneys frequently make an application to remove any state court action to the federal courts.
On August 26, 2015, the Third Circuit Federal Court of Appeals issued a “precedential” opinion, Dr. Neville M. Mirza, MD. v. Insurance Administrator of America, Inc. (No. 13-3535). The issue decided was whether plan administrators must inform claimants, of plan imposed deadlines for filing a lawsuit, in their notifications denying benefits. The Court held that such notice must be contained in the notification denying benefits and the failure to do so would result in the court applying the state contract law statute of limitations which is 6 years in New Jersey.
In the case at bar, the denial letter did not contain the statute of limitations. The statute of limitations was set forth in the plan document which was buried on page 73 of the plan. This provision provided a one year statute of limitations. Generally, contracts can set forth a statute of limitations which is much less that the statutory statute of limitations for contracts, which is six years in New Jersey.
In the within case, the plaintiff did not institute suit until almost nineteen months after he received the denial letter. The plaintiff obtained the plan documents within the one year statute of limitations. The Court ruled that New Jersey’s six year statute of limitations would apply.