The Employee Retirement Income Security Act (ERISA), which governs private employer-sponsored health, disability, and pension plans, does not contain a statute of limitations for benefit claims. Its only statute of limitations applies to claims for breach of fiduciary duties. Thus, courts have looked to the most analogous state statute of limitations when determining whether a case has been timely filed. In Santino v. Provident Life and Accident Ins. Co., 2001 WL 1628316 (6th Cir., Dec. 21, 2001); and Alcorn v. Raytheon Co., 2001 WL 1604084 (D. Mass., Nov. 21, 2001), two federal courts held that an ERISA plan’s internal deadline for filing suit for denied benefits supercedes the state statute of limitations.

Both cases involve claims for disability benefits available under plans that contained a three-year deadline for filing suit. Dr. Santino was found by his disability plan to have a "residual" rather than "total" disability.. After accepting the classification for nearly four years, he brought suit to recover the higher amount provided for total disability. The state statute of limitations for breach of contract is six years. Ms. Alcorn received total disability benefits for one month before her employer terminated her disability benefits. She brought suit four and a half years later, relying on Massachusetts’ six year statute of limitations for contract actions.

Both federal courts found that contract law allows contracts to include shorter statutes of limitations than provided under state law. The Sixth Circuit noted that Dr. Santino had agreed to the terms of the disability policy and had accepted the determination of the disability plan for more than three years. The Massachusetts District Court looked to the principle of party autonomy that is inherent in the law of contracts. The District Court also considered whether the shorter, three-year time period was reasonable. In finding that it was, the court analogized to suits to set aside a federal administrative decision, which often must be filed within 60 days of the final agency action. Like administrative appeals, ERISA suits are filed upon completion of an internal appeals process and are review, not evidentiary, proceedings.

The issue of contractual statute of limitations in ERISA health and other plans may become more important as plans revise their claims procedures to comply with new requirements that go into effect in 2002. Advocates should review all plan documents thoroughly to assure that the client has exhausted all administrative remedies and that any contractual time periods for filing a court appeal have not run.