It has been clearly established that a claimant has 180 to file an administrative long term disability appeal. However, once the administrative appeal is denied, there is a great deal of ambiguity as to when a claimant must commence an action in Federal District Court. In a recent decision, Wilson v. The Standard Insurance Company, the 11th Circuit Court of Appeals had the opportunity to explain the applicable time limitations in ERISA cases.
In Wilson, the 11th Circuit noted that “ERISA does not provide a statute of limitations for suits brought under § 502(a)(1)(B) to recover benefits. Thus, courts borrow the most closely analogous state limitations period,” unless the parties have contractually agreed to a different one in the ERISA plan. Northlake Reg’l Med. Ctr. v. Waffle House Sys. Emp. Benefit Plan, 160 F.3d 1301, 1303 (11th Cir. 1998). In other words, since there is no specific time limit to file an action in court, the statue applied in ERISA cases is whatever statue exists in the forum state. Therefore, in most long term disability cases, courts borrow the statute of limitations on breach of contract actions of the state where the case is heard.
However, plan administrator and insurers can specify in the plan or policy document that a different statute of limitations is applicable. This is in fact what happened in Wilson. In Wilson, the Standard Insurance Company specified in the disability policy that the time limitation to file an action in Federal Court was 3 years. However, the applicable statute of limitations for breach of contract cases in that particular forum state (Alabama) was six years. When the Standard issued its letter denying Ms. Wilson her long term disability benefits, it failed to mentioned that the policy had a three year limitation period.
Wilson eventually filed an action in Federal Court, 34 months after the three year period had passed. The Standard alleged that the action was time barred because it was outside the three year period contained in the policy. Wilson contended that the three year period was not applicable because the Standard had failed to point out in the denial letter that there was a three year limitation to bring actions in court. The 11th Circuit held that the insurance company was not required to inform the claimant of the time limitation to bring action in court. According to the court, the insurance company is only required to mention in the denial letter the 180 time limitation to file administrative appeals. Moreover, the Circuit Court of Appeals noted that the plaintiff bears the responsibility of obtaining a copy of the long term disability plan and determining on his or her own what is the applicable time period to file an action in court.