The Court of Appeals for the Ninth Circuit held that a plaintiff participant is excused from having to pursue administrative remedies under his employer’s long-term disability plan because the plan failed to resolve his request for benefits in a timely fashion. As a general rule, an Employee Retirement Income Security Act (ERISA) claimant must exhaust available administrative remedies before bringing a claim in federal court. However, when a plan fails to establish or follow reasonable claims procedures consistent with the requirements of ERISA, a claimant need not exhaust available administrative remedies because his claims will be deemed exhausted.
At issue in this case was how long the disability plan had to adjudicate a claim for benefits. The Ninth Circuit noted that the timing rules regarding this issue are complex and depend on a number of factors, including the type of benefit claim, and whether or not the plan is a multiemployer plan. Generally, a disability claim must be resolved within 45 days, but certain plans may be permitted to resolve disability claims at a subsequent quarterly meeting. The disability plan in question is not a multiemployer plan and did not resolve the claim within the 45 day period, but rather relied on the quarterly meeting extension. The Ninth Circuit noted that the Department of Labor regulations regarding this issue are unclear because they contain circular cross-references and intertwine the general timing rules with the timing rules for disability claims and multiemployer plans.
To resolve this ambiguity, the Ninth Circuit deferred to the U.S. secretary of labor’s amicus brief filed on behalf of the participant. The brief stated that the quarterly meeting rule is only available for multiemployer plans. Because the plan in this case was not a non-multiemployer plan, the Ninth Circuit ruled that the plan was required to resolve disability claims within 45 days. Because the disability claim was not resolved within this time period, the plaintiff’s administrative remedies were deemed exhausted. As a result, the district court’s summary judgment ruling in favor of the plan was reversed and the case was remanded to the district court for further proceedings. This case serves as a reminder for plan administrators to be familiar with the proper and timely adjudication of claims in accordance with procedure. (Barboza v. California Association of Professional Firefighters, 9th Cir. 2011)