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Do Your Plans Include a Time Limit on a Participant’s Right to Sue?

Some, but far from all, employee benefit plans set a limit on the amount of time a participant has to file a lawsuit claiming benefits under the plan.  Until recently, however, not all courts would recognize these plan imposed lawsuit filing deadlines.  The Supreme Court case of Heimeshoff v. Hartford Life, decided in December 2013, changed that by ruling that employee benefit plan contractual provisions that limit the time to file a lawsuit to recover benefits are enforceable, provided the time limitations are not unreasonably short or contrary to a controlling statute.

The Heimeshoff decision involved a plan that provided a participant must file a lawsuit to recover benefits within three years from the date proof of loss was due.  The Supreme Court decision found that the three year limitation period was not too short, noting the plan’s internal claims review process would be concluded in plenty of time for a participant to file a lawsuit to recover benefits. Based on the court’s reasoning, it appears likely that a shorter limitation on filing claims might also be upheld as long as there is sufficient time for the participant to file a lawsuit once the claims procedure period has ended.

While Heimeshoff involved a disability plan, the decision applies equally to all ERISA covered health and welfare plans, retirement plans, and top hat plans.

So, do your employee benefit plans include a limitation on the time a participant has to file a lawsuit to recover benefits?  Don’t assume that they do.  Many plans do not provide a time limit for filing a lawsuit, and now would be a great time to amend those plans to add the limitation.

© 2019 Poyner Spruill LLP. All rights reserved.


About this Author

Nancy C. Brower, Employee benefits lawyer, ERISA Attorney, Poyner Spruill Law Firm

Nancy practices in the area of employee benefits and ERISA. She has significant experience designing and documenting retirement plans and executive compensation plans as well as providing administrative advice on these plans. Nancy has represented clients before the Internal Revenue Service and Department of Labor, and she has represented clients in matters involving employee benefit due diligence, negotiation and planning in the context of mergers and acquisitions.

Representative Experience...

Eugene S. Griggs, Employee Benefits Attorney, Poyner Spruill Law Firm

Gene has practiced in the employee benefits and executive compensation area for over 20 years advising public, private, nonprofit and governmental employers with regional, national and international operations, bank trustees and third-party administrators. His expertise covers the full range of retirement plans, welfare benefit plans, fringe benefit plans, non-qualified deferred compensation plans and other executive compensation arrangements.

Representative Experience

  • Extensive experience in the design and drafting of qualified retirement plans, including preparation of major amendments for TRA ’86, GUST and EGTRAA, and qualifying plans with the IRS. Regularly counsels employers on administrative and compliance issues, including assistance in correcting qualification failures, prohibited transactions and fiduciary breaches.

  • Regularly advises regarding welfare and fringe benefit plans, including COBRA, HIPAA and non-discrimination issues.