Participant's Disability Claim is Time-Barred

The U.S. Court of Appeals for the Second Circuit has ruled, in Arkun v. Unum Group, that a plan participant could not sue to restore her long-term disability ("LTD") benefits because the suit was time barred by the plan's provisions.

Facts. The employee became disabled in 1999 and began receiving LTD benefits. In 2004, the plan informed her that she was no longer disabled and that benefits would be terminated. A lengthy appeals process followed and the participant completed her appeal information in 2008. Six months later, in 2009, the plan issued its final denial. In 2015, the participant sued for benefits. The plan responded by saying the lawsuit was time barred.

The LTD plan's terms provided that: "No action at law or in equity may be brought until 60 days after Covered Persons have given us Proof of Loss and have exhausted all appeals. Such action may not be brought more than 3 years after the earlier of: 1. the date we receive Proof of Loss [i.e., evidence of disability]; or 2. the end of the period within which Proof of Loss is required to be given."

Decision. The court noted that ERISA does not itself set forth a period specifying when lawsuits must be filed. However, the U.S. Supreme Court, in Heimeshoff v. Hartford Life & Accident Ins. Co., has ruled that a plan's limitations provision must be given effect unless: (1) the period is unreasonably short; or (2) a controlling statute prevents the limitations period from taking effect.

The court determined that the participant had submitted the proof of loss in 2008. It then said that the plan's three-year limitations period was not unreasonable because it provided the participant with a two and a half year period in which to file a lawsuit after the conclusion of the administrative review process. It also noted that there was no relevant statute that would permit the participant to sue after a six- or seven-year delay.

Finally, the court reject the participant's claim that the plan's provision applied only to the initial claim for disability.

The court therefore ruled in favor of the plan.