The lawsuit (Heimeshoff Vs. Hartford Life and Wal-Mart Stores Inc, Case Number 12-729) involved disability insurance that was offered by the policyholder’s employer and therefore covered by ERISA. Under ERISA laws, a policyholder cannot file a lawsuit to appeal a denied claim until the insurance company’s appeals process has been exhausted.
Julie Heimeshoff filed an insurance claim for long-term disability for lupus and fibromyalgia. She filed the claim in August 2005, but it was denied in November 2006. She appealed that decision in September 2007, but the appeal was denied again in November 2007. Heimeshoff then filed a lawsuit in November 2010.
Hartford Life, the insurance company, argued that the lawsuit should have been filed within Connecticut’s three-year statute of limitations, which began running the day proof of loss was required by the insurance company. That would have left Heimeshoff with just under one year following the denial of her appeal to file the lawsuit. Based on that, Heimeshoff’s lawsuit, Hartford Life argued, was untimely and should have been dismissed. But Heimeshoff claimed the statute of limitations should not begin running until the insurer’s appeals process has been exhausted because a lawsuit cannot be filed until after that time.
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Writing for the panel, Justice Clarence Thomas noted that the court “rejects the contentions of Heimeshoff and the United States that the limitations provision is unenforceable because it will undermine ERISA’s two-tiered remedial scheme.”
What this means for people with insurance plans covered by ERISA is that if those plans have a statute of limitations for filing a lawsuit, that period can begin running before the appeals process has been exhausted. Policyholders must be aware of the statute of limitations in their state or associated with their plan and know when that period begins running or they might not be able to file a lawsuit.