Know Your Rights – ERISA Claim Deadlines

We’ve previously blogged about the importance of meeting deadlines in your claim for benefits under an ERISA-governed insurance policy.  Most ERISA plans have strict deadlines for submitting a claim, appealing the insurance company’s denial of your claim, and filing a lawsuit.  The deadlines are strict and ERISA is draconian about deadlines – missing them by even a day can cause you to permanently lose your claim with no recourse.

The good news is that the insurance company and ERISA plan have to follow their own deadlines in handling claims for benefits.  The federal Department of Labor, the agency with oversight over ERISA plans and insurance companies, has a regulation mandating ERISA plans and insurance companies subject to ERISA give ERISA claims full and fair review.  Part of this regulation requires insurers to decide ERISA claims within certain deadlines.

For claims under ERISA-governed disability insurance policies, the insurer must decide the claim within 45 days.  The insurer can extend this deadline by up to 60 days, but must show circumstances outside the insurer’s control in order to do so.  Also, the insurer must notify you of the extension before the initial deadline expires.  Even if the insurer gets the extension, they have to tell you the date they expect to decide your claim.

For claims under ERISA-governed group health insurance plans, the deadline depends on the type of claim. Urgent care claims must be decided within 72 hours. Claims involving an ongoing course of treatment must be decided within 24 hours. Pre-service claims must be decided within 15 days.  And post-service claims must be decided within 30 days. Like disability claims, these deadlines can sometimes be extended, but only under limited circumstances.

If the insurance company misses the deadlines, there are important consequences.  First, you’re entitled to file a lawsuit without waiting for the insurance company to finish its review.  That means you can have your case heard by a judge weeks or months before you otherwise might. Second, once you’re in court, the court may apply greater scrutiny to the insurer’s handling of your claim because the insurer disregarded the ERISA deadlines.

Importantly – and fairly – courts are holding insurance companies to these deadlines just as strictly as they hold claimants to deadlines.  In the recent case Fessenden v. Standard Reliance Life Insurance Company, the Seventh Circuit Court of Appeals held these deadlines are a “bright line”.  Writing “What’s good for the goose is good for the gander,” the court determined that the insurer’s missing the deadlines by even a day violates the rule and allows the claimant to file suit immediately.