Unanimous Supreme Court in Heimeshoff Permits Contractually-Based SOLs in ERISA Denial of Benefit Cases

CourtThis morning, the United States Supreme Court issued its decision in Heimeshoff v. Hartford Life & Accidental Life Ins. Co., concerning statute of limitation accrual issues for benefit claims under Section 502(a)(1)(B) of ERISA.

The Court unanimously held that Hartford’s Long Term Disability Plan’s requirement that any suit to recover benefits be filed within three years after “proof of loss” is due is enforceable.  More specifically, “[a]bsent a controlling statute to the contrary, a participant and a plan may agree by contract to a particular limita­tions period, even one that starts to run before the cause of action accrues, as long as the period is reasonable.”  Causes of action for benefits under ERISA do not start to accrue until a final internal appeal decision.  Because Heimeshoff failed to file a claim for long-term disability ben­efits with Hartford within the contractual SOL period, the Court concluded her claim was rightfully denied by Hartford.

While ERISA does not provide a statute of limitations for denial of benefit claims, many plan administrators have in place a contractual 3-year limitations period like Hartford’s. 

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Thoughts on the Holder Address: Two Cheers for the New Paradigm

In August, Attorney General Eric Holder delivered a widely noted address to the American Bar Association that seemed to promise significant changes in federal prosecutorial policies.  I wrote these reactions for the Federal Sentencing Reporter.

Following decades in which the U.S. Department of Justice has consistently advocated for a rigid and harsh legalism in criminal justice policy—in which DOJ, in the name of abstract principles of national uniformity, has willfully disregarded the devastating impact of its charging, plea-bargaining, and sentencing practices on real-life human beings—Attorney General Holder’s ABA address seems a breath of fresh air. He calls for a more flexible federal criminal justice system, in which prosecutorial charging priorities are more specifically tailored to meet local needs, in which sentencing is more individualized to the offender and prosecutors sometimes forego mandatory minimum sentences, and in which individual U.S. Attorney Offices experiment with new diversion programs as an alternative to conventional case-processing. Holder believes—correctly, I think—that a more flexible and pragmatic system can achieve better public-safety results at less cost than a system in which preserving the integrity of the federal sentencing guidelines is the overriding value.

Through Holder’s address, DOJ offers its most prominent and unequivocal endorsement yet of an emerging new criminal justice paradigm.  

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Much ERISA Fun at the Supreme Court Today: Heimeshoff and Benefit SOL Accrual Issues

Supreme_CourtOK, hold onto your seats for some flat-out ERISA law excitement. This morning, the United States Supreme Court heard oral argument in Heimeshoff v. Hartford Life & Accidental Insurance Co. [Briefs at SCOTUSblog], concerning statute of limitation accrual issues for benefit claims under Section 502(a)(1)(B) of ERISA.

RossRunkel.com, as always, gets to the heart of the matter (which is really impressive when you consider it is ERISA after all):

Heimeshoff’s disability policy, administered by Hartford, says that a court suit for wrongful denial of benefits has to be filed within three years of when the claimant files a proof of loss with the plan administrator.

That can be tough, given the fact that it’s possible for the three-year period to begin to run before the claimant has gone through the administrative procedure that must be followed before bring a suit. I suppose it’s even possible in some cases that the three years would run out before the claimant got a final denial.

Continue ReadingMuch ERISA Fun at the Supreme Court Today: Heimeshoff and Benefit SOL Accrual Issues