Readers of a certain generation will remember the 1980s G.I. Joe cartoon that often ended with the tagline "Knowing is half the battle." On August 26, in Mirza v. Insurance Administrator of America, Inc., the US Court of Appeals for the Third Circuit made a similar pronouncement: when seeking to enforce an ERISA plan's imposed statute of limitations, the court stated that "notice of the statute of limitation is half the battle." On the heels of this decision, plan administrators are cautioned to make certain that their benefit denial letters clearly disclose any applicable statute of limitations in the plan that may shorten the period for filing suit.
Often described as a "statute of repose," a statute of limitation (SOL) imposes a deadline by which an individual must bring a claim. After that deadline, the claim is considered "time-barred," meaning that the claimant is SOL . . . that is, in this case, "simply out of luck." If a lawsuit is brought after the expiration of the SOL, the court is empowered to dismiss the case without ever considering the merits in the underlying dispute.
ERISA contains a six-year SOL for fiduciary breach claims but does not impose a limitations period for benefit claims. As a consequence, courts typically look to an applicable state SOL for breach of contract claims (by analogizing ERISA plans to contracts). However, as the Supreme Court recently affirmed, an ERISA plan can impose its own SOL, and that provision will be enforced, provided that the limitations period is "reasonable."