Fourth Circuit Finds ERISA Administrator Forfeits Deference by Missing Appeal Deadline

In Cogdell v. Reliance Standard Life Ins. Co., No. 24-1940, —F.4th—-, 2026 WL 588427 (4th Cir. Mar. 3, 2026), a published decision, the Fourth Circuit held that a plan administrator’s failure to timely decide a disability appeal under ERISA results in forfeiture of deferential review and requires de novo review in federal court.

The claimant, a principal business process engineer, stopped working after developing long-COVID symptoms following two infections. After her long-term disability claim was denied, she timely filed an internal appeal. Under ERISA’s claims-procedure regulations, a disability appeal must be decided within 45 days, with a possible 45-day extension only if “special circumstances” justify the delay and the administrator provides timely written notice identifying both the special circumstances and the expected decision date. See 29 C.F.R. § 2560.503-1(i). For disability claims filed after April 1, 2018, administrators must “strictly adhere” to these regulatory requirements. § 2560.503-1(l)(2).

The administrator, Reliance Standard Life Insurance Company, issued its appeal decision 72 days after the appeal was filed. Although it had sent a letter stating it intended to obtain an independent physician review, it did not identify any valid “special circumstances” or provide a date certain for a decision. The district court held that the appeal was therefore deemed denied without the exercise of discretion and reviewed the claim de novo, ultimately awarding benefits.

On appeal, the Fourth Circuit affirmed.

The court began with Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101 (1989), which instructs that a denial of benefits under § 1132(a)(1)(B) is reviewed de novo unless the plan grants discretionary authority. Even where discretion is granted, however, deferential review applies only when the administrator actually exercises that discretion. Drawing on trust-law principles underlying Firestone, the court emphasized that courts defer to a fiduciary’s discretionary act—not merely to the existence of discretionary language in the plan.

Although the plan here conferred discretionary authority, the court held that Reliance failed to validly exercise that discretion because it did not comply with the regulatory timing requirements. Construing “special circumstances” according to its ordinary meaning, the court concluded that submission of additional medical records and the need for an independent physician review are routine aspects of disability appeals, not unusual or extraordinary events. The regulations themselves contemplate both. See 29 C.F.R. § 2560.503-1(h).

Because Reliance did not invoke a valid extension, the court found that the 45-day deadline controlled. When that deadline passed without a decision, the claim was deemed denied without the exercise of discretion. At that point, there was no discretionary determination to which a court could defer. In reaching that conclusion, the Fourth Circuit aligned itself with other circuits that have held deference applies only to a valid exercise of discretion. See, e.g., Nichols v. Prudential Ins. Co. of Am., 406 F.3d 98, 109 (2d Cir. 2005) (deference applies only to “actual exercises of discretion”); Gilbertson v. Allied Signal, Inc., 328 F.3d 625, 631 (10th Cir. 2003) (administrator’s decision must be a valid exercise of discretion); Fessenden v. Reliance Standard Life Ins. Co., 927 F.3d 998, 1001–05 (7th Cir. 2019). The court relied particularly on Fessenden in rejecting the argument that a late-issued decision can retroactively restore deferential review.

Reliance argued that its delay was merely a procedural irregularity and that substantial compliance should preserve abuse-of-discretion review. The Fourth Circuit disagreed. While the court has previously recognized substantial compliance in certain notice contexts, see Ellis v. Metro. Life Ins. Co., 126 F.3d 228, 235 (4th Cir. 1997), it declined to extend that doctrine to regulatory timing requirements that define the boundaries of fiduciary authority. Decisions made outside those boundaries are not exercises of discretion.

The court also rejected the insurer’s argument that the Department of Labor’s regulation improperly dictates the standard of review, an argument framed in light of Loper Bright Enters. v. Raimondo, 603 U.S. 369 (2024). The panel explained that its holding flowed from Firestone and trust-law principles—not from deference to agency interpretation. Courts defer only when discretion has been validly exercised; once the deadline passed, there was no such exercise.

Applying de novo review, the Fourth Circuit affirmed the district court’s award of benefits. It rejected arguments that the district court misidentified the claimant’s “regular occupation,” improperly excluded post-deadline medical reviews, or impermissibly favored treating physicians. The court found that the district court’s factual findings were not clearly erroneous.

The decision is a significant reminder that, in disability claims subject to the post-2018 regulations, timing requirements are not technicalities. In the Fourth Circuit, failure to strictly comply with appeal deadlines may eliminate Firestone deference altogether.