The Second Circuit Court of Appeals held that the claimant, John McQuillin, exhausted his administrative remedies ̶ a requirement prior to filing a lawsuit ̶ due to Hartford’s failure to strictly comply with regulations governing the appeals process. Under the Employee Retirement Income Security Act of 1974 (ERISA), a disability plan administrator must provide a final decision on a claimant’s benefit eligibility within 45 days of receiving an appeal.
While working for Wright Medical Technology in September 2019, Mr. McQuillin applied for long-term disability benefits due to suffering side effects from prostate cancer treatment. Hartford denied his claim on the basis that it was missing certain information and did not have enough proof to evaluate his disability.
The denial letter correctly stated that Mr. McQuillin could appeal the decision and that ERISA required Hartford to provide a “final decision” within 45 days of the appeal ̶ a period that it could only extend with prior written notice and due to “special circumstances” beyond its control.
Mr. McQuillin appealed Hartford’s denial and provided it with additional evidence of his disability. Twelve days later, Hartford responded with a letter stating that it had “completed [its] review of the appeal”, “overturned the original decision to deny [the claim],” and “forwarded [the claim] to the claim department … to determine if disability is supported.”
However, Hartford’s letter also cautioned that payment of benefits was not guaranteed. Rather, Hartford’s claim department would review the new information, determine if Mr. McQuillin was disabled, and render a new decision. In other words, a final benefit determination was not made.
46 days after submitting his appeal, Mr. McQuillin sued Hartford in New York federal district court. The district (trial) court agreed with Hartford’s position and dismissed Mr. McQuillin’s case on the basis that he had not exhausted his disability plan’s remedies since his appeal was still under review at the time he filed suit. Mr. McQuillin then appealed to the Second Circuit Court of Appeals.
On appeal, the Court agreed with Mr. McQuillin. Specifically, the Court held that:
- Because Hartford did not make a final benefit determination within the 45-day window required by ERISA, Mr. McQuillin’s administrative remedies were deemed exhausted; and
- Mr. McQuillin was free to file a lawsuit against Hartford on day 46.
The Court further clarified that an insurance companies’ valid/final benefit decision on review must determine whether the claimant is entitled to benefits – and cannot simply decide some other aspect of the claim.
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