Statute of Limitations – A Case Study

Mirza v. Ins. Admin. Of America, Inc., 800 F.3rd 129 (3d Cir. 2015)

 

The legal issue in Mirza involved whether insurance companies and plan administrators must inform claimants of plan or policy imposed deadlines for judicial review (i.e. filing a lawsuit) and the court held that they must pursuant to ERISA, 29 C.F.R §2560.503-1(g)(I)(iv).

The court quoted 29 C.F.R. § 2560.503-1(g)(1)(iv), which requires plan administrators to set forth a “description of the plan’s review procedures and the time limits applicable to such procedures, including a statement of the claimant’s right to bring a civil action under section 502(a) of the Act following an adverse benefit determination.

The court found in Dr. Mirza’s favor based on a review of ERISA’s regulations which requires “a notification of the timeframes involved for enforcing one’s rights and practical considerations given that the plan at issue was 91 pages long and its statute of limitation provision was buried on page 73.

 
When the insurance company denied Dr. Mirza’s claim for reimbursement for performing a surgery it advised him of the right to bring a lawsuit to challenge the denial but did not inform him that the lawsuit had to be brought within one year of the denial in order to be timely.  Although Dr. Mirza filed the lawsuit within the six year statute of limitations provided for by New Jersey law he did not file it within one year of the denial.  The court found in Dr. Mirza’s favor based on a review of ERISA’s regulations which requires “a notification of the timeframes involved for enforcing one’s rights and practical considerations given that the plan at issue was 91 pages long and its statute of limitation provision was buried on page 73.

The court found the appropriate remedy in Dr. Mirza’s case was to set aside the plans one year time limit and instead it applied the limitations period from the most analogous state law cause of action which was New Jersey’s six year deadline to enforce a breach of contract claim.

The court’s decision in the Mirza case will undoubtedly assist insured’s and plan beneficiaries by providing clarity and certainty that 1. they have a legal remedy to pursue judicial review, the decision of which is very often a financially conflicted insurance company and 2. The important timeframes which need to be adhered to in order to pursue those claims.

The issue of whether an insurance company and ERISA plan administrator needs to advise an insured or beneficiary of the timeframes involved to pursue their legal remedies in Federal Court has seen considerable litigation over the years.  The court’s decision in the Mirza case will undoubtedly assist insured’s and plan beneficiaries by providing clarity and certainty that 1. they have a legal remedy to pursue judicial review, the decision of which is very often a financially conflicted insurance company and 2. The important timeframes which need to be adhered to in order to pursue those claims.