Administrator’s final denial letter must notify Claimant of time limits for filing suit.

According to Moyer v. Met Life Ins. Co., No. 13–1396, (6th Cir. 8/7/2014), 2014 WL 3866073,  __ F.3d __,), the failure to do so will excuse a reasonably late filing of a lawsuit.

Mr. Moyer filed a claim disability benefits under an employer-sponsored disability insurance policy. The policy said: “[n]o lawsuit may be started more than 3 years after the time proof [of a claim] must be given.”

The policy, like most ERISA disability policies, had two different definitions of “disabled.”  The  first, (called “own occ”) provided that MetLife would pay disability benefits for the first 24 months that a covered employee was unable to perform all the duties of his normal occupation.  Then, after 24 months, the second definition (“any occ”) came into play.  Under this definition, the Claimant was required to prove that there was no occupation that he could perform.

Met Life paid the claim during the “own occ” period, but determined that Mr. Moyer could perform some work in “any occupation.” They notified him of the denial of benefits past the “own occ” period, and he filed an internal appeal. Met Life denied the appeal. The denial letter told him that he had the right to file suit, but did not tell him how long he had to do it.  He filed suit after the three year period stated in the policy.

The district court dismissed the suit because it was filed after the three-year limitations provision in the policy. The court found that the notice in the policy was sufficient and MetLife had no affirmative duty to restate it in its final denial.

Mr. Moyer appealed. The Court of Appeal (6th Circuit) held that the regulations (specifically 29 C.F.R. Section 2560.503-1) require denial letters to provide information regarding the time limits in which a lawsuit must be filed:

The exclusion of the judicial review time limits from the adverse benefit determination letter was inconsistent with ensuring a fair opportunity for review and rendered the letter not in substantial compliance. Moreover, “[a] notice that fails to substantially comply with these [§ 1133] requirements does not trigger a time bar contained within the plan.” Burke v. Kodak Ret. Income Plan, 336 F.3d 103, 107 (2d Cir.2003).

Where an insurance company’s failure to comply with the procedural requirements of § 1133 represents a “significant error on a question of law,” a related claim should be remanded to the appropriate body for review. VanderKlok v. Provident Life & Acc. Ins. Co., Inc., 956 F.2d 610, 616–17 (6th Cir.1992); see also McCartha v. Nat’l City Corp., 419 F.3d 437, 444 (6th Cir.2005) (“If the denial notice is not in substantial compliance with § 1133, reversal and remand to the district court or to the plan administrator is ordinarily appropriate.”). Moyer was denied his right to judicial review as a result of MetLife’s failure to comply with § 1133. The appropriate remedy is to remand to the district court so that Moyer may now receive judicial review.

Moyer v. Metro. Life Ins. Co., 13-1396, 2014 WL 3866073 (6th Cir. Aug. 7, 2014)

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