>With the ruling, the US 5th Circuit Court of Appeals agreed with seven other federal courts regarding the quality of a benefit denial notice given by UNUM Life Insurance Co. to a long-term disability participant. Although the notice was “less than perfect,” according to the court, it was sufficient as an ERISA document, and thus an administrative appeal filed 20 months later could be deemed “untimely”.
>Carolyn Lacy was notified in November 2001 that she was not eligible for long-term disability benefits under the UNUM-administered plan because her heart condition was caused in part by a drug she had been taking for a pre-existing heart condition. Lacy filed an appeal 20 months later, which UNUM rejected, calling it “untimely”. Lacy then filed suit in US District Court for the Southern District of Texas, claiming that the notice given was insufficient and thus did not require a timely appeal. The court rejected her claim.
>On appeal, the appeals Court ruled that although the notice fell short of strict compliance with ERISA, it was “indisputably in substantial compliance.”
“Albeit arguably less than perfect, UNUM’s denial notice, whether read as a whole or parsed as to each particular provision, is in substantialcompliance with the applicable requirements of ERISA and the [Departmentof Labor’s] Regulation,” wrote the court in the opinion . “It was thus sufficient for the purpose ofcommencing the running of the period within which Lacy could havesubmitted an appeal to the plan administrator.”