Supreme Court Hears Case Involving Statute of Limitations in ERISA Denied Claim

October 17, 2013, 3:30PM. By Heidi Turner

Washington, DCThe Supreme Court has heard the arguments involving an ERISA denied claim regarding the statute of limitations in such insurance claims. Unfairly denied insurance claims can result in a lawsuit being filed, but when those claims involve ERISA-covered insurance, when the statute of limitations begins is an important question.

Insurance that is provided through employment is covered by the Employee Retirement Income Security Act (ERISA). Under ERISA, when insurance claims are denied, the claimant must first exhaust the insurance company’s appeals process before filing a lawsuit. That, of course, delays when a lawsuit is filed. But the statute of limitations prevents a lawsuit from being filed after a certain amount of time, depending on the state the lawsuit is filed in.

In the lawsuit before the Supreme Court (Heimeshoff Vs. Hartford Life and Wal-Mart Stores Inc, Case Number 12-729), the plaintiff, Julie Heimeshoff, filed an insurance claim for long-term disability due to lupus and fibromyalgia. That claim was filed in August 2005 and denied in November 2006. The plaintiff appealed the decision in September 2007, but it was denied again in November 2007.

Heimeshoff then filed a lawsuit in November 2010. Hartford Life, the insurance company involved, says the policy required the plaintiff to file her lawsuit within the statute of limitations, which in Connecticut runs out three years from the date that the claimant is supposed to provide proof of loss to the insurance company. By the time the final appeal was denied, according to court documents, there was approximately one year left on the statute of limitations.

But Heimeshoff argues that the statute of limitations should begin running once the insurer’s appeal process has been exhausted. This is because a lawsuit cannot be filed before the appeals process has been used and because when a claimant files the appeal, he or she has no idea how much time will be left on the statute of limitations by the time the final appeals are denied. Furthermore, the plaintiff’s lawyer argued, it is difficult to determine when proof of loss is actually due to the insurance company because insurance companies frequently request more documents to support a claim.