United Healthcare Not Required to Give Time Limits Notice

Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...

By Carmen Castro-Pagan

May 18 —A health plan participant challenging United Healthcare's denial of benefits can't continue with some of his ERISA claims since they were filed too late, the U.S. District Court for the District of Utah ruled.

In his May 17 opinion, Judge Dale A. Kimball granted United's motion to partially dismiss the participant's claim to recover benefits under the Employee Retirement Income Security Act. Kimball held that ERISA regulations don't require United to provide any time limits for review procedures in the final letter denying benefits to participants.

Kimball also said that although providing time limits in denial letters for bringing a lawsuit under ERISA may be a good idea and helpful to claimants, it isn't required under the governing regulations.

The dispute stems from United's denial of benefits to Michael C.D.'s son for residential health-care treatment at two medical facilities.

United moved to dismiss two of Michael C.D.'s claims, arguing that he filed his claims after the expiration of the one-year contractual limitations period provided in the plan.

Limitations Period in Plan

The court disagreed with Michael C.D.'s argument that the contractual limitations clause in the plan was ambiguous. The clause is “sufficiently clear for the average plan participant to determine both the limitation period and the date that the period begins to run,” the court said.

In its final denial letter, United informed Michael C.D. of his right to file a lawsuit under ERISA, but didn't specify the time limit for doing so. Michael C.D. argued that United was required to notify him in the denial letters both of the limitations period and the date the period began to run.

The court noted that several U.S. appeals courts, including the First, Third and Sixth circuits, have interpreted ERISA regulations to require denial letters to include the deadline for filing a lawsuit in federal court.

In contrast, the Ninth and Eleventh circuits have held that ERISA regulations only require denial letters to include time limits applicable to internal review procedures.

The court ultimately found persuasive the Tenth Circuit's unpublished decision in Young v. United Parcel Services, 416 F. App'x 734 (10th Cir. 2011), in which it concluded that requiring a notification of the time limit for filing a lawsuit “conflates the internal appeals process” and its deadlines with the filing of a lawsuit after that process has been exhausted.

ERISA regulations only require initial denial letters to include time limits applicable to an administrator's internal review procedures, the court said. Under the regulations, there is no requirement to include time limits for review procedures in final denial letters, the court said. Nonetheless, both letters must inform participants of their right to bring a lawsuit under ERISA, the court noted.

By informing Michael C.D. of his right to file a lawsuit, United complied with its ERISA requirements, the court concluded.

Brian S. King represented Michael C.D. and his son. Sedgwick LLP and Fabian VanCott represented United.

To contact the reporter on this story: Carmen Castro-Pagan in Washington at ccastro-pagan@bna.com

To contact the editor responsible for this story: Jo-el J. Meyer at jmeyer@bna.com

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