Doe v. Blue Cross Blue Shield United of Wisconsin
In Doe v. Blue Cross Blue Shield United of Wisconsin, 112 F.3d 869 (7th Cir.1997), the plaintiff sought treatment for obsessive compulsive disorder in 1989. His employer-sponsored health insurance plan initially paid for his psychiatric treatment but later stopped paying and formally denied coverage.
On August 17, 1990, Blue Cross, the plan administrator, notified Doe that it would not pay for any psychiatric treatment rendered after December 1, 1989.
On September 27, 1994, after completing an internal appeals process, Doe sued to recover benefits for treatment provided to him between December 1989 and May 31, 1991.
As with the Plan in Abena's action, Doe's plan limited the time-frame in which suits could be filed. Doe's plan provided that "no legal action may be commenced... later than three (3) years from the time written proof of loss was required to be filed. Written proof of loss must be filed within ninety (90) days of the date of service. This means that any legal action must be commenced within thirty-nine (39) months of the first date of services on which the action is based." Doe, 112 F.3d at 872-73.
The district court read this provision to mean that, for Doe to recover all of the benefits he was seeking, he was required to sue by March 1993, thirty-nine months after the December 1989 psychiatric services he received. The court also concluded that the last day on which he could sue for any benefits was August 29, 1994, a date that fell thirty-nine months after May 31, 1991, the final date on which services were rendered. Another provision in Doe's plan prohibited suits from being filed until the exhaustion of the claimant's internal remedies. For Doe, that process lasted until September 25, 1991, leaving seventeen months left in the contractual limitations period before the March 1993 cut-off date to sue for full benefits.
The Court observed that ERISA contains no statute of limitations, and that the usual practice in that instance is to borrow the limitations period of the most closely analogous state or federal statute. We also noted the prevailing rule in contract law that contractual limitations periods that are shorter than the statutory period are permissible, provided they are reasonable. Doe, 112 F.3d at 874.
The Court adopted that prevailing rule and held that contractual limitations, if reasonable, are enforceable in suits under ERISA, regardless of state law. 112 F.3d at 875.
The Court deemed the thirty-nine month period reasonable in general and under the circumstances of Doe's case. Even though the internal appeals process was protracted, the employee, who was represented by counsel throughout the process, still had seventeen months in which to bring the suit before the period expired.
The Court likened a suit under ERISA, following the completion of an internal appeals process, to a suit to set aside an administrative decision, an action that typically must be filed within thirty or sixty days of the decision. 112 F.3d at 875.
A seventeen month period was therefore more than sufficient to meet the standard of reasonableness. The Court also remarked that the doctrine of equitable estoppel would protect ERISA claimants and would discourage plan administrators from dragging on the internal appeals process in order to shorten the time left for filing suit. Doe, 112 F.3d at 876.