SCOTUSblog: Heimeshoff v. Hartford Life & Accident Insurance Co. and Wal-Mart Stores, Inc.
Argument: Oct 15 2013 (Aud.)
Background: Heimeshoff filed for long-term disability benefits under Employee Retirement Income Security Act (ERISA), but the insurance company denied her claim. The District Court then dismissed her complaint because it fell outside of the insurance policy's three-year statute of limitations period. Heimeshoff alleged that the statute of limitations should not have run until her claim was denied by the insurance company; on the other hand the insurance company's plan provided that its three-year limitations period ran from the time that proof of loss was due under the plan (an earlier period). The Second Circuit affirmed.
Issue: The question before the Court is when should a statute of limitations accrue for judicial review of an disability adverse benefit determination under the Employee Retirement Income Security Act?
Holding: In a unanimous decision, the Supreme Court ruled that the plan's limitations provision is enforceable. Statutes of limitations provide only a default rule that permits parties to choose a shorter limitations period (although, to be clear, §ERISA 502(a)(1)(B) does not specify a statute of limitations). Parties can agree not only to the length of a limitations period but also to its commencement. As a result, the Court affirmed the Second Circuit and Heimeshoff's disability claim was denied. The practical impact of this decision is that contractual limitations provisions of the kind in this ERISA plan are enforceable so long as the limitations period is of reasonable length and there is no controlling statute to the contrary.