ERISA-Fifth Circuit Holds That Claim For Disability Benefits Is Time Barred

In Horn v. Owens-Illinois Employee Benefits Committee, No. 10-50640 (5th Cir. 2011), the plaintiff filed suit, claiming that he was denied both permanent and total disability (“PTD”) benefits and disability retirement income (“DRI”) benefits, in violation of ERISA. The defendants moved for summary judgment on the plaintiff’s claims, arguing that: (1) his claim for the PTD benefits was barred, since he had not timely appealed his benefit denial, and (2) he was not entitled to DRI benefits, since qualifying for PTD benefits was a prerequisite for receiving the DRI benefits. The district court granted summary judgment to the defendants, and the plaintiff appealed. The Fifth Circuit Court accepted the defendant’s arguments in both (1) and (2), and affirmed the summary judgment.

The plaintiff had been employed at Owen-Illinois. As a result of an injury at work, the plaintiff applied for the PTD benefits on February 17, 2005. The claims administrator, Aetna Life Insurance Company (“Aetna”), denied the plaintiff’s application for these benefits on March 1, 2005. He did not appeal this denial. On July 11, 2006, the plaintiff was notified that his employment at Owens-Illinois was terminated. The plaintiff was awarded Social Security Disability benefits on March 5, 2007. He then contacted Owens-Illinois seeking “every benefit to which he [was] entitled as a result of the determination by Social Security.” Owens-Illinois denied his request as untimely in November, 2007. In 2008, the plaintiff sent Owens-Illinois a request for PTD and DRI benefits in light of his entitlement to Social Security Disability benefits, but-again- this request was rejected as untimely. The plaintiff then filed this suit.

As to the PTD benefits, the Court determined that the plaintiff’s requests for those benefits in 2007 and 2008 are appeals of the earlier PTD benefit denial by Aetna on March 1, 2005. As such, the Court found that those requests are not timely, since the plaintiff never appealed the 2005 Aetna benefit denial (that is, he did not appeal this denial within applicable time limits, e.g., the 60 day limit under ERISA regulations). Further, since he never appealed the Aetna benefit denial, the Court ruled that the plaintiff failed to exhaust the applicable administrative procedures, so he cannot now bring a suit for the PTD benefits. As to the DRI benefits, the Court noted that the applicable summary plan description (the “SPD”) indicates that, to be entitled to these benefits, an insurance company must approve the employee’s claim for permanent and total disability “under the PTD provision . . . .” The SPD further requires the employee to receive PTD benefits before submitting an application for DRI benefits. As such, the Court concluded that the plaintiff had to receive PTD benefits, as a prerequisite for entitlement to DRI benefits.