As noted by the Court, its prior precedent permits this result:
“[I]n the absence of a controlling statute to the contrary,
a provision in a contract may validly limit, between the parties, the time for
bringing an action on such contract to a period less than that prescribed in
the general statute of limitations, provided that the shorter period itself
shall be a reasonable period.” Order of United Commercial Travelers of
America v. Wolfe, 331 U. S. 586, 608 (1947).
. . .
If parties are permitted to contract around a default statute
of limitations, it follows that the same rule applies where the statute
creating the cause of action is silent regarding a limitations period.
The Wolfe rule necessarily allows parties to agree not
only to the length of a limitations period but also to its commencement. The
duration of a limitations period can be measured only by reference to its start
date. Each is therefore an integral part of the limitations provision, and there
is no basis for categorically preventing parties from agreeing on one aspect
but not the other.
. . .
ERISA §502(a)(1)(B) authorizes a plan participant to bring
suit “to recover benefits due to him under the terms of his plan, to
enforce his rights under the terms of the plan, or to clarify his rights
to future benefits under the terms of the plan.” 29 U. S. C.
§1132(a)(1)(B) (emphasis added). That “statutory language speaks of ‘enforc[ing]’
the ‘terms of the plan,’ not of changing them.”
. . .
Neither Heimeshoff nor the United States claims that the
Plan’s 3-year limitations provision is unreasonably short on its face. And with
good reason: the United States acknowledges that the regulations governing
internal review mean for “mainstream” claims to be resolved in about one year,
Tr. of Oral Arg. 22, leaving the participant with two years to file suit. Even
in this case, where the administrative review process required more time than
usual, Heimeshoff was left with approximately one year in which to file suit.
Heimeshoff does not dispute that a hypothetical 1-year limitations period
commencing at the conclusion of internal review would be reasonable. Id.,
at 4. We cannot fault a limitations provision that would leave the same amount
of time in a case with an unusually long internal review process while providing for a significantly longer period in most cases.
. . . .
The first tier of ERISA’s remedial
scheme is the internal review process required for all ERISA disability-benefit
plans. 29 CFR §2560.503–1. After the participant files a claim for disability
benefits, the plan has 45 days to make an “adverse benefit determination.”
§2560.503–1(f)(3).Two 30-day extensions are available for “matters beyond the
control of the plan,” giving the plan a total of up to 105 days to make that determination.
Ibid. The plan’s time for making a benefit determination may be tolled
“due to a claimant’s failure to submit information necessary to decide a
claim.” §2560.503–1(f)(4).
Following denial, the plan must provide the participant with
“at least 180 days . . . within which to appeal the determination.”
§§2560.503–1(h)(3)(i), (h)(4). The plan has 45 days to resolve that appeal,
with one 45-day extension available for “special circumstances (such as the
need to hold a hearing).” §§2560.503–1(i)(1)(i), (i)(3)(i). The plan’s time for
resolving an appeal can be tolled again if the participant fails to submit
necessary information.§2560.503–1(i)(4). In the ordinary course, the
regulations contemplate an internal review process lasting about one year. Tr.
of Oral Arg. 22. If the plan fails to meet its own deadlines under these
procedures, the participant “shall be deemed to have exhausted the
administrative remedies.” §2560.503–1(l). Upon exhaustion of the internal review
process, the participant is entitled to proceed immediately to judicial review, the second tier of ERISA’s remedial scheme.
The Court rejected the suggestion that plan administrators
would “attempt to prevent judicial review by delaying the resolution of
claims in bad faith.” The Court found
this to be speculative in light of the short deadlines given in the statute (as
just discussed) and because “the penalty for failure to meet those deadlines is
immediate access to judicial review for the participant. 29 CFR
§2560.503–1(l). In addition, that sort of dilatory behavior may implicate one
of the traditional defenses to a statute of limitations.” In addition,
even in the rare cases where internal review prevents
participants from bringing §502(a)(1)(B) actions within the contractual period,
courts are well equipped to apply traditional doctrines that may nevertheless
allow participants to proceed. If the administrator’s conduct causes a
participant to miss the deadline for judicial review, waiver or estoppel may
prevent the administrator from invoking the limitations provision as a defense.
NOTICE: This summary is designed merely to inform and
alert you of recent legal developments. It does not constitute legal advice and
does not apply to any particular situation because different facts could lead
to different results. Information here can change or be amended without notice.
Readers should not act upon this information without legal advice. If you have
any questions about anything you have read, you should consult with or retain
an employment attorney.
