District Court Affirms Long-Term Disability Policy’s Three-Month Contractual Limitations Provision, Dismissing Plaintiff’s ERISA Lawsuit with Prejudice

In Prince v. Lincoln Life Assurance Company of Boston, No. 2:22-CV-01759-CCW, 2023 WL 2713947 (W.D. Pa. Mar. 30, 2023), Pennsylvania Western District Judge Christy Chriswell Wiegand granted Lincoln’s motion to dismiss Plaintiff’s ERISA long-term disability benefits action finding that Plaintiff’s claim was time-barred by the plan’s three-month contractual limitations period.

On April 24, 2019, Plaintiff became disabled due to lumbar spondylolisthesis and radiculopathy, and applied for long-term disability benefits from Lincoln. Lincoln approved her claim and began paying benefits effective July 24, 2019. Two years later, Lincoln reviewed Plaintiff’s claim to determine her eligibility for ongoing benefits. As part of its review, Lincoln retained a medical consultant expert and a vocational specialist. Based on their opinions, Lincoln terminated benefits effective July 20, 2021.

Plaintiff timely appealed Lincoln’s termination decision. After further review by additional medical reviewers, Lincoln upheld its decision on April 20, 2022. The uphold letter stated: “Your employer’s plan has a contractual limitations period of three months following the exhaustion of the administrative claims and appeals procedures. Which means that a lawsuit must be brought within three months after the date of this letter. The date on which the contractual limitations period expires for this claim is July 20, 2022.” Plaintiff filed the instant action on December 8, 2022.

The Court found that Plaintiff’s claim was time-barred. Citing Heimeshoff v. Hartford Life & Acc., Ins., 571 U.S. 99, 102 (2013), it stated, “absent a law to the contrary, the parties’ contractual limitations period will control, as long as the period is reasonable.” Moreover, a denial letter that discloses the limitations period provides the participant a fair opportunity to bring suit under ERISA, even if this period is for a relatively short amount of time. As an example of a reasonable limitations period, the Court cited Mirza v. Ins. Adm’r of Am., Inc., 800 F.3d 129, 136 n.6 (3d Cir. 2015) (citing Northlake Reg’l Med. Ctr. v. Waffle House Sys. Emp. Benefit Plan, 160 F.3d 1301, 1304 (11th Cir.1998)), which held that a ninety-day deadline to file suit was reasonable.

The Court rejected Plaintiff’s argument that because Lincoln retained unilateral control over the terms of the Plan, the limitations period set forth in the Plan should not be considered an agreement between the parties. It noted that (1) employers have large leeway to design disability and other welfare plans as they see fit; and (2) employers are generally free under ERISA, for any reason at any time, to adopt, modify, or terminate welfare plans. Moreover, it found that Plaintiff was eligible, not required, to participate in the Plan and her voluntary participation and acceptance of benefits under the Plan foreclosed her from arguing that she never agreed to the Plan’s limitations period.

Finally, the Court concluded that Plaintiff’s argument that the doctrine of equitable tolling should apply, such that the statute of limitations should be extended was also unpersuasive, as Plaintiff conceded that Lincoln had provided her with a complete copy of the claim file on July 5, 2022—weeks before the limitations period expired—yet Plaintiff did not file a lawsuit until a further six months had passed.

As this case demonstrates, the specific terms of your insurance policy can affect the validity of your disability claim. If your insurance company has denied or terminated your disability claim, contact us for assistance.