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KEC79

Deadline to File Claims - permissible?

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Company sponsors an unfunded severance plan subject to ERISA. They impose a 120-day limit on filing claims. (120 days is calculated from date employee receives notice that he/she won't receive benefit or notice of the amt of his/her benefits.) 

DOL regulations don't specifically address this, but they do say that the claims procedures can't inhibit or hamper the filing of claims.  (The example they give for this is that you can't charge a fee for processing claims.)

Has anyone thought about whether imposing a time limit on filing claims is reasonable?

Thanks!

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In Heimeshoff v. Hartford Life & Accident Ins. Co., 134 S. Ct. 604; 57 Empl. Benefits Cas. (BNA) 1265, 2013 BL 345916 (U.S. Dec. 16, 2013), the Supreme Court held that an ERISA-governed employee-benefit plan may specify a limitations period that bars a benefits claim if the period is reasonable.

 

Ask your lawyer for his or her advice about whether the period you describe is reasonable.

 

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Thanks, but Heimeshoff was about bringing suit in court, not filing an initial claim with the plan fiduciary.  I'm asking about limiting the timeframe in which the participant can even bring a claim.

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Perhaps the plan’s administrator might treat “notice that [the claimant] won’t receive benefit” as a claim denial or “adverse benefit determination”, and likewise might treat “notice of the amount of [the claimant’s] benefits” as a denial or adverse benefit determination of a claim to a greater amount.

 

If so, the 120-days period might not contravene 29 C.F.R. § 2560.503-1(h)(2)(i), which calls for a claims procedure to “[p]rovide claimants at least 60 days following receipt of a notification of an adverse benefit determination within which to appeal the determination[.]”

 

https://www.ecfr.gov/cgi-bin/text-idx?SID=695269138ec14a5af2fef19167f43fcb&mc=true&node=se29.9.2560_1503_61&rgn=div8

 

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DOL addresses this in FAQs discussing the regs (but doesn't go much beyond what you originally cited):

C-19: Does the regulation limit a plan's ability to establish a maximum period for the filing of initial claims for benefits?

No. The regulation does not contain any specific rules governing the period of time that must be given to claimants to file their claims. However, a plan's claim procedure nonetheless must be reasonable and not contain any provision, or be administered in any way, that unduly inhibits or hampers the initiation or processing of claims for benefits. Adoption of a period of time for filing claims that serves to unduly limit claimants' reasonable, good faith efforts to make claims for and obtain benefits under the plan would violate this requirement. See 29 CFR § 2560.503-1(b)(3).

https://www.dol.gov/agencies/ebsa/about-ebsa/our-activities/resource-center/faqs/benefit-claims-procedure-regulation

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