The First Circuit Court of Appeals has ruled, in Fortier v. Hartford Life and Accident Insurance Company, that a long term disability (“LTD”) plan’s 180 day period for claims denial appeals begins when a claim is denied and not when benefits cease to be paid.
An employee went out on disability and was granted LTD benefits. In a letter mailed on July 23, 2013, the plan’s insurer informed the employee that she was subject to the plan’s 24 month limitation on benefits for mental illness and that her benefits would terminate on September 13, 2013. In a prior letter, the employee had been advised “[i]f you do not agree with our denial, in whole or in part, and you wish to appeal our decision, you or your authorized representative must write to us within one hundred eighty (180) days from your receipt of this letter.”
The employee did not appeal within 180 days of receipt of the July 23, 2013 letter. Rather, she sent a letter dated March 7, 2014, appealing the decision. This was about two months later than 180 days from the receipt of the insurer’s July 23, 2013 letter. The insurer responded in a letter dated March 26, 2014, stating that it would not consider the employee’s appeal because it was untimely.
The employee then sued, arguing that an ERISA regulation defining an “adverse benefit determination” requires that the 180-day time limit start at the date of termination of benefits and not from the date of notice.
The court ruled that the employee’s reading of ERISA requirements is “plainly wrong”. The relevant ERISA regulation does not define an “adverse benefit determination” as a “contemporary cessation of benefits.” Rather, the ERISA regulation concerning notice of an adverse benefit determination states in part that a plan must “[p]rovide claimants at least 180 days following receipt of a notification of an adverse benefit determination within which to appeal the determination.” The court stated that “Notice is the key event. The ERISA regulations do not require that the time limit for an administrative appeal run from the date of termination of benefits.”
Therefore, the court ruled in favor of the plan