In Santana-Diaz v. Metro. Life Ins. Co., 816 F.3d 172 (1st Cir. 2016), the court held “that ERISA requires a plan administrator in its denial of benefits letter to inform a claimant of not only his right to bring a civil action, but also the plan-imposed time limit for doing so. Because MetLife violated this regulatory obligation, the limitations period in this case was rendered inapplicable[.]” The First Circuit thus reversed the district court, which had held that the failure to provide notice was not dispositive because plaintiff was aware of the limitation through the group policy.
This dispute turns on the interpretation of 29 C.F.R. § 2560.503–1(g)(1)(iv), which provides that a denial letter “[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 on review.” Though a number of district courts have held that this section plainly does not require notice of a contractual limitations, the Third and Sixth Circuits have held that notice is required. Mirza v. Ins. Admin. Of America, 2015 WL 5024159 (3d Cir. 2015); Moyer v. Met. Life Ins. Co., 762 F.3d 503 (6th Cir. 2014). The First Circuit previously suggested, in dictum, that notice was required. Now it has confirmed that dictum.
The court held that “the correct interpretation of section 2560.503–1(g)(1)(iv) is that a denial of benefits letter must include notice of the plan-imposed time limit for filing a civil action.” From there, the court went on to hold that a failure to provide the notice in the denial letter is always prejudicial, unless cured by subsequent notice: “we hold that, where a plan administrator fails, as MetLife did here, to include the time limit for filing suit in its denial of benefits letter, and it has not otherwise cured the defect by, for example, informing the claimant of the limitations period in a subsequent letter that still leaves the claimant sufficient time to file suit, the plan administrator can never be in substantial compliance with the ERISA regulations, and the violation is per se prejudicial to the claimant.”
This goes farther than some other circuits (including the Second), which held that actual notice of the limitation provision, such as from the plan itself, precludes a finding of prejudice sufficient to estop the administrator from enforcing the limitation.