The district court for the District of Massachusetts recently held that a plan could not dismiss the appeal of a denied benefit, even though the denial occurred more than two years earlier.
The district court reasoned that the appeal is not time-barred because the plan document did not contain any time limit within which an appeal must be made. In this case, the plaintiff was a participant in his employer’s long-term disability plan. The employer utilized the certificate of insurance as the plan document and a summary plan description drafted by the long-term disability insurer. Due to a disability, the plaintiff’s last day of work was November 29, 2003. The plaintiff began receiving long-term disability benefits in February 2004. In March 2006, the plaintiff was notified that, based on medical and occupational information, he no longer was entitled to benefits. The plaintiff did not appeal the denial of benefits until February 2009. The plan refused to consider the appeal because it was not made within 180 days of the benefit denial. Although the summary plan description contained a provision requiring that an appeal of a denied claim must occur within 180 days, such a provision was not part of the plan document.
The district court, citing the recent Amara Supreme Court decision, held that the terms of the plan govern, and that the terms of the summary plan description are not the terms of the plan. Because the plan document did not contain any time limit within which an appeal must be made, the plan acted improperly in refusing to consider the plaintiff’s appeal on the grounds that the appeal was untimely.
This case is significant because it illustrates the heightened importance of the plan document following the Amara decision. Employers should review their plan documents to confirm that important provisions are included in the plan document and not just disclosed as part of the summary plan description. (Merigan v. Liberty Life Assurance Co. of Boston, D. Mass. 2011)