Defense bar files brief to U.S. SC in support of insurer

By Jessica M. Karmasek | Aug 29, 2013

WASHINGTON (Legal Newsline) -- DRI: The Voice of the Defense Bar this week filed an amicus brief with the U.S. Supreme Court, saying the terms of an Employee Retirement Income Security Act-covered plan must be upheld.

Heimeshoff v. Hartford Life & Accident Insurance Co. et al. is expected to settle differences among the courts of appeals regarding the extent to which the terms of an ERISA-covered plan can establish the date on which the statute of limitations to file a claims for benefits complaint in federal court will begin to run.

The Employee Retirement Income Security Act protects the assets of millions of Americans so that funds placed in retirement plans during their working lives will be there when they retire.

According to the U.S. Department of Labor, ERISA is a federal law that sets minimum standards for pension plans in private industry.

For example, if an employer maintains a pension plan, ERISA specifies when an employee must be allowed to become a participant, how long they have to work before they have a non-forfeitable interest in their pension, how long a participant can be away from their job before it might affect their benefit, and whether their spouse has a right to part of their pension in the event of their death.

Most of the provisions of ERISA are effective for plan years beginning on or after Jan. 1, 1975.

On Aug. 22, 2005, Julie Heimeshoff, a Walmart employee, submitted a claim for long-term disability benefits under the ERISA-covered long-term disability plan sponsored by her employer.

The insurance policy funding the plan, issued by Hartford, required Heimeshoff to submit proof of loss by Dec. 8, 2005, and provided that the three-year statute of limitations to file a claim for benefits related to the denial of a disability claim would begin to run from the date proof of loss is due.

During the process of evaluating her claim, several faxes and requests for information were sent to Heimeshoff and her doctor, which went unanswered, and her claim was eventually denied for failure to provide proof of loss.

Five months later, Heimeshoff retained counsel and advised of her intent to appeal the denial decision made by the plan.

Through counsel, Heimeshoff sought and received plan-related documents that included the plan's contractual three-year limitations period and established that such period began to run from the date proof of loss was due.

After the conclusion of her informal appeal, Heimeshoff's claim was again denied on Nov. 25, 2007.

Heimeshoff's suit challenging the denial of benefits was not filed until Nov. 18, 2010.

Hartford moved to dismiss the complaint filed by Heimeshoff, challenging the denial of benefits on the grounds that the claim was barred by the plan's limitations period.

The U.S. District Court for the District of Connecticut agreed with Hartford and dismissed the case. The U.S. Court of Appeals for the Second Circuit affirmed.

The U.S. Supreme Court granted review in April.

In her brief on the merits, Heimeshoff argues that plans should not be allowed to impose a limitations period that begins before the claimant exhausts administrative remedies and is able to file suit because doing so could allow the limitations period to waste away while the claimant is going through the plan's administrative review process.

In its brief on the merits, DRI supports Hartford's position, saying it is consistent with "well settled statutory and contractual principles" that the clear terms of a plan must be upheld and that courts should not re-write unambiguous terms of a plan.

DRI argues that the protections of the administrative claims process that are guaranteed through the labor department's claims procedure regulations and relevant case law make the "hypothetical concerns" predicted by Heimeshoff to be "highly unlikely."

Should they occur, the mechanism of equitable tolling employed by federal courts is an adequate means to address the matter, the defense bar contends.

"In light of the safeguards against delay and administrative abuse already provided in existing regulations, as well as case law providing alternate avenues to court for claimants when the plan's internal claims procedures fail, there is no basis for the wholesale judicial revision of plan terms that petitioner seeks," DRI wrote in its brief, filed Tuesday.

"Nor does the actual experience of these plans over many years offer any justification for the result that petitioner and the supporting amici ask this court to impose."

Jerry Ganzfried, co-author of the amicus brief, explained further.

"Powerful and compelling reasons support the conclusion that courts should uphold express plan language that provides a reasonable period for claimants to challenge adverse decisions," he said in a statement Thursday.

"Judicial fidelity to contractual language will promote the orderly and fair administration of benefits plans."

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

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