Published by The Pellegrin Firm August 1, 2019

In the recent case of Faciane v. Sun Life Assurance Co. of Canada, No. 18-30918, __F.3d__, 2019 WL 3334654 (5th Cir. July 25, 2019), the New Orleans-based U.S. Court of Appeals for the Fifth Circuit followed other federal courts of appeal and several district courts within the Fifth Circuit in finding that the time limit for challenging an ERISA LTD administrator’s benefit calculations in court begins upon notice of the benefit calculation. The time period could begin a little later if there is an appeal and a final decision of the calculation, but basically, once the insurance company gives final notice they are sticking with the calculation and there are no other reviews available, the limitations period begins to run. The actual time limitation period itself will usually come from the policy.

Circuit Judge Higginson, writing for the court, did give some help to claimants by stating that the result may be different if the benefit calculations are unclear or so complicated a lay person cannot reasonably be expected to understand them. Also, he stated that in ERISA cases, if the limitations period in the policy does not give the claimant a reasonable amount of time to file suit after appeals are finished, the court may refuse to enforce it.

In this case, the court found the plaintiff had clear notice of the insurance company’s calculations and waited far too long to challenge them in court. The explanations of benefits were clear enough and the contractual limitations period was reasonable.