In Young v. United Parcel Services, Inc., No. 10-4156 (10th Cir. 2011), the plaintiff, Deanne Young (“Young”), was appealing the district court’s dismissal of her claim under ERISA for short-term disability benefits. This dismissal was based on a provision, found in the summary plan description (the “SPD”) for the United Parcel Service Inc. Flexible Benefits Plan (the “Plan”), which imposed a deadline on the time for filing a lawsuit. The Tenth Circuit Court upheld this provision and affirmed the district court’s dismissal of Young’s claim.
Young had applied for and received short-term disability (“STD”) benefits under the Plan, beginning on December 17, 2007. AETNA Life Insurance Company (“Aetna”) is the claims administrator under the Plan for STD claims. On March 20, 2008, AETNA sent Young a letter stating that it had not received medical information supporting a disability beyond March 11, 2008. Young’s STD benefits therefore terminated after that date. AETNA’s letter indicated that Young could appeal its determination by filing a written request within 180 days. Young filed a first-level appeal, which was denied by AETNA on May 12, 2008, in a letter informing her that she had 60 days to file a further appeal. Young’s second-level appeal was denied by the UPS Claims Review Committee (“the Committee”) on October 17, 2008. The Committee’s letter informed her that she might have a right to sue under ERISA, but it did not indicate any deadline for filing suit. Young filed this action almost a year later, on September 8, 2009. But was this action barred by the provision in the SPD which imposed a deadline on the time for bringing suit?
The SPD stated that any legal action to receive Plan benefits must be filed by the earlier of:
• six months from the date a determination is made under the Plan, or • three years from the date the service or treatment was provided or the date the claim arose, whichever is earlier.
The SPD further stated that the failure to file suit within this time limit results in the loss/waiver of the right to file suit. Under this provision, Young’s time to file her action expired on April 17, 2009, six months after the date of the Committee’s letter denying her second-level appeal.
In analyzing the case, the Court said that, since ERISA does not contain a statute of limitations for private enforcement actions, courts generally apply the most closely analogous statute of limitations under state law. However, parties to an ERISA plan are free to include a reasonable contractual limitation in the plan on the period for bringing an action. In this case, the Plan specifically incorporated the SPD, and stated that, if the terms of the Plan and the SPD conflict, the SPD shall govern. Thus, the language in the SPD does not improperly amend the Plan. The provision containing the deadline for bringing suit is not ambiguous and was put in an appropriate place in the SPD. Since the SPD states only that notice will be provided regarding the time limits applicable to the appeal procedures, the Committee did not breach any duty by failing to include the deadline for filing suit in the second-level denial letter. Implicitly, the Court did not find anything unreasonable about the deadline established by the SPD. As such, the Court upheld the deadline.