Three-Year Limitations Period
Many long-term disability policies contain a provision that "... no action at law or in equity shall be brought to recover on this policy ... after the expiration of three years after the time written proof of loss is required to be furnished." [See: Cal. Ins. Code § 10350.11.]
Most policies further provide that "proof of claim" is required 60 or 90 days from the disability date. Therefore, this language creates a limitations period of 3 years plus 2-3 months from the disability date.
With ERISA claims, the administrative process involved in filing an initial disability claim and appealing a claim-denial can take 6 months to a year or more before all administrative remedies have been exhausted and a final administrative denial has been issued.
What this means is that the 3-year statute of limitations may begin to run well before a disability claim has received a final denial.
There could be additional administrative delays, such as paying disability benefits for a period of time under the "own occupation" standard, which are then terminated under the "any occupation" standard, that may further erode the 3-year limitations period. Add to that a client who delays in finding an ERISA lawyer to take his/her case, and by the time an attorney sees such a client in the office, the 3-year limitations period may be close to running or has already run, and the client has lost the opportunity to file a lawsuit.
Given the special circumstances that an ERISA case presents, it has been unclear whether courts would apply the 3-year limitations period to ERISA cases. However, in Heimeshoff v. Hartford Life & Acc. Ins. Co., 134 S. Ct. 604 (2013), the United States Supreme Court has indicated that the 3-year rule applies to ERISA cases.
The 3-year rule can be a trap for the unwary.