A divided panel of the Sixth Circuit held yesterday in Moyer v. Met. Life Ins. Co. that an employee was entitled to bring suit against after the contractual limitations period in his ERISA-governed long term disability plan had expired, because the claim administrator failed to include the time limit for judicial review in the benefit revocation letter itself.  The majority held that, without the limitations period, the letter was “not in substantial compliance with  29 U.S.C. § 1133,” even though it included notice of the employee’s right to judicial review and the limitations period was stated in other plan documents which were available to participants upon request.

The Court said that the “purpose” of § 1133 was “that the claimant be notified of the reasons for the denial of the claim and have a fair opportunity for review,” and interpreted this to apply to judicial review (quoting Kent v. United of Omaha Life Ins. Co., 96 F.3d 803, 806 (6th Cir. 1996)).  The majority rejected the narrower reading of § 1133 as protecting only the right to review by a plan fiduciary, citing authority from the First Circuit and dicta from the Fourth and Fifth (unpublished) Circuits in support of its interpretation.  Although a layperson reading the bare statute would likely favor the narrower reading, the majority pointed out that the statute demands that its mandate be carried out “[i]n accordance with regulations of the Secretary,” and that 29 C.F.R. § 2560.503-1 requires benefit denial letters to provide a “description of the plan’s review procedures and the time limits applicable to such procedures, including a statement of the claimant’s right to bring a civil action . . . following an adverse benefit determination.”

Judge Cook dissented, primarily on the ground that the employee “rested his argument” on another statute in the district court and on appeal, and “neither mention[ed] the legal requirements for claim-denial letters not cite[d] § 1133 or its implementing regulation, 29 C.F.R. § 2560.503-1.”  Judge Cook did not take a position on the proper reading of the statute, but noted that the statute’s interpretation “presents a more difficult issue than the majority acknowledges,” and deplored that the decision was being made without briefing, “short-circuiting the adversarial process.”

ERISA administrators should take note and make sure to include the applicable contractual limitations period in benefit denial letters.  For those who have missed the boat and are already facing this issue outside the Sixth Circuit, Judge Cook’s dissent—which distinguished some of the authority cited in the majority opinion and cited persuasive authority favoring the narrower reading—might be a good starting point for further research.