Over the holiday season, it was easy to overlook any news about U.S. Supreme Court rulings. But in a decision of interest to those in employment and insurance law practices, the justices ruled that health care insurers can legally set deadlines for when customers must file any lawsuit challenging a denial of benefits.
What may have been ever further overlooked is that the case actually originated in Connecticut. Patrick Begos, of Begos, Brown & Green in Southport, handled it every step of the way until it reached the nation’s highest court.
“I never had a case go that far,” said Begos. “It was the first time I have ever been to an argument at the Supreme Court in a case I was intimately involved in. That was great.
“It would’ve been nice to argue it, too, but when you’re replaced by a former solicitor general, you really can’t complain,” Begos continued. Seth Waxman, now of WilmerHale in Washington, D.C., handled the Supreme Court arguments.
Begos and his firm were hired by Hartford Life & Accident Insurance Co. after the Connecticut-based insurer was sued by Julie Heimeshoff, who worked as a Walmart senior public relations manager. Heimeshoff, who complained that chronic pain and fatigue were interfering with her ability to work, filed for long-term disability benefits with The Hartford. Doctors diagnosed her with lupus and fibromyalgia in 2005, but her benefits claim was denied in 2007.
Begos explained that under the Employee Retirement Income Security Act (ERISA), an administrative review process is set up to address disputes like this before they can go to court.
Consider, for example, workers who become disabled. Begos said they must submit a claim to their health insurance provider, which then gathers information and ultimately decides whether it agrees that a person is disabled. Workers typically must turn in supporting documentation from their doctors and employers providing details of their medical condition, information about their job duties and verification they are not currently working.
If a worker disagrees with the insurance company’s decision, he or she can pursue an administrative appeal, Begos explained. That appeal is usually handled by different people within the same insurance company. “Generally speaking it’s only after that administrative appeal gets completed that the employee can go to court,” said Begos.
In this case, Heimeshoff’s claim was denied by The Hartford in 2007. In 2010, with the help of her attorney, Steven Krafchick, of the Krafchick Law Firm in Seattle, she sued in U.S. District Court in Connecticut for her benefits. Krafchick’s practice focuses on representing people with fibromyalgia type disabilities.
Begos, however, said there was a provision in Heimeshoff’s insurance plan stating that any lawsuit over benefits must be filed within three years of when her salary losses began. In Heimeshoff’s case, that was in 2005. And so, Begos contended, her lawsuit should have been filed by 2008.
However, opposing counsel Krafchick argued that the federal ERISA law has no such provision. If there was a three-year time limit on filing a lawsuit, the lawyer said, the clock shouldn’t have started running until the administrative remedies had been exhausted. Krafchick further argued that The Hartford should have specifically mentioned any time limits in its denial of coverage letter.
“What was specifically in dispute in this case was not the length of the limitation period itself, but when it began to run,” said Begos, who has focused on ERISA cases during his 20-year legal career. “Usually fights over statute of limitations provisions in contracts look at what the end date is. They don’t tend to look at when the clock starts running.”
Begos and The Hartford noted that the health care plan contained language stating that the statute of limitations clock starts running on the date when injured workers must file documents proving their financial loss. In this case, this was 60 days after Heimeshoff filed her initial claim.
Begos filed a motion in federal court to dismiss the claim on grounds that the language in the insurance policy governs the dispute, and that Heimeshoff had not filed the suit within the time frame provided for in the policy. The federal court agreed. The Walmart manger then appealed to the U.S. Court of Appeals for the Second Circuit.
The federal appellate judges, in a five-page ruling in 2012, also sided with Begos’ interpretation of the insurer’s policies.
Heimeshoff didn’t stop there. She then asked the U.S. Supreme Court to review the case. The case was argued before the nation’s highest court Oct. 15, 2013. A ruling was issued Dec. 16. Once again, Heimeshoff’s arguments fell short.
“Neither Heimeshoff nor the United States claims that the plan’s three-year limitations provision is unreasonably short on its face,” wrote Justice Clarence Thomas. “Even in this case, where the administrative review process required more time than usual, Heimeshoff was left with approximately one year in which to file suit. Heimeshoff does not dispute that a hypothetical one-year limitations period commencing at the conclusion of internal review would be reasonable…. In the absence of any evidence that there are similar obstacles to bringing a timely claim, we conclude that the plan’s limitations provision is reasonable.”
Matt Wessler, who argued Heimeshoff’s case before the Supreme Court, was unhappy with the ruling and expressed concern about the long-term impact.
“This is a disappointing decision that permits language in a one-sided contract to trump a federal statute and overturns nearly two centuries of well-settled law about when the limitations clock on a federal claim can start ticking,” Wessler, an attorney with Public Justice in Washington D.C., said in a statement on the group’s website.
“This decision triggered a seismic shift in the black letter law,” Wessler said. “A lot of statutes are silent on the statute of limitations, so it’s conceivable that for any statute where Congress has not explicitly said that the limitations period begins when the claim can be filed in court, a contract can start the clock running earlier and potentially eliminate a plaintiff’s right to file a cause of action.”
Begos, who was pleased the U.S. Supreme Court upheld his earlier work, was not surprised with the ruling given the direction the justices have gone in other recent ERISA decisions.
“It’s not a watershed ERISA case that’s fundamentally changed the way people approach these disputes,” said Begos. “It’s more of a further emphasis on a point that the court has been reemphasizing repeatedly over the last four or five years… The plan is paramount. Whatever plan the employer establishes, that’s going to govern, absent unusual circumstances.”•