Third Circuit Holds ERISA Plan Administrator Must Inform Claimant of Plan-Imposed Deadline for Judicial Review in Notification Denying Benefits

In Mirza v. Insurance Administrator of America, Inc., 2015 WL 5024159, (3d Cir. Aug. 26, 2015), the Court of Appeals addressed the principal question of whether under the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001 et seq. plan administrators must inform claimants of plan-imposed deadlines for judicial review in their notifications denying benefits. 29 C.F.R. § 2560.503-1(g)(1)(iv) provides that when a plan administrator denies a request for benefits, it must 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.”

The ERISA plan at issue in Mirza imposed a one-year deadline for filing suit following the final denial of benefits. After the final denial of benefits to Mirza, Insurance Administrator of America, Inc. issued a letter to Mirza informing him that his request for benefits was denied and he had a “right to bring a civil action under ERISA § 502(a)” if he was not content with the final decision. Importantly, the letter did not inform Mirza that he had one year from the date of the denial to seek judicial review.

On appeal, the Third Circuit found that 29 C.F.R. § 2560.503-1(g)(1)(iv) must be read such that it requires a plan administrator to inform a claimant not only of his right to bring a civil action under ERISA, but also the time limit for such action. Because Insurance Administrator failed to inform Mizra that the plan imposed a one-year deadline for filing suit, the court set aside the plan’s provision finding it had not been triggered. Instead, the court applied New Jersey’s six-year statute of limitations pertaining to breach of contract actions and held Mizra timely filed suit, even though he filed 19 months after the final denial of his claim for benefits.