Do ERISA LTD Time Limits Apply to Insurers?
One judge thinks so, as reported in Perry v. Metropolitan Life Ins. Co. in the Middle District of Georgia. Ms. Perry had a long term disability policy through MetLife. Her claim was originally paid, but then later denied. Ms. Perry timely appealed the denial of her claim. MetLife let her know that it might have to take more than the allowed 45 days to decide the claim, if “special circumstances” existed. MetLife then sent a letter on the 47th day after the appeal submission and claimed that it needed more time. It claimed it now needed an independent medical evaluation. Rather than delaying any longer, Ms. Perry filed a lawsuit.
In response to the complaint, MetLife filed a motion to dismiss, claiming that Ms. Perry failed to exhaust administrative remedies. In particular, MetLife argued that it “substantially complied” with ERISA deadlines and its own policy provisions. The court noted however that substantial compliance, according to most authorities, relates to failing to meet a deadline that is inconsequential or which occurs in the context of an ongoing good faith exchange of information between the administrator and the claimant. The court did not find MetLife was in substantial compliance in this case. The court did find that deadlines do indeed apply to insurers.