Compliance: Heimeshoff highlights the importance of contractual limitation periods in ERISA plans

As long as a “reasonable” period of time is left to file suit, the contractual limitation period will be enforceable

The Supreme Court’s recent decision in Heimeshoff v. Hartford Life & Accident Insurance Company held that an ERISA plan’s contractual limitation period can effectively be used to shorten a plan participant’s time to file suit following a claim denial.

The contractual limitation period at issue in Heimeshoff precluded a plan participant from bringing suit more than three years after “proof of loss” was due under the plan’s terms. ERISA, however, has been judicially construed to require that plan participants exhaust administrative remedies through an internal review and appeal process before a participant can sue to recover benefits. Notably, this means that under Heimeshoff, a contractual limitation period can begin running during the administrative review process and before the cause of action, or right to sue even accrues.

Contributing Author

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James A. Hazlehurst

James A. Hazlehurst is a litigator with the Newport Beach office of Barger & Wolen.He handles ERISA-government and state law insurance coverage disputes (primarily life...

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