From our law firm’s experience it seems that Walgreens will look for any excuse to deny short term or long term disability benefits to a plan participant. In a recent disability lawsuit filed in Michigan, Walgreens tried their best to use a legal technicality to dismiss the lawsuit of a former employee. Fortunately, the court did not buy Walgreen’s unreasonable argument.
Matthew, a Walgreens Store Manager was forced off work on December 29, 2005 due to Dercums Disease, Chairi Malformation, Carpal Tunnel Syndrome and various other illnesses. As a participant in the Walgreens Income Protection Plan for Store Managers, Matthew was eligible for Long-Term Disability benefits if he met the Plan’s terms and conditions. The Plan administrator found Matthew eligible and began paying him disability benefits.
Unfortunately, Matthew’s claim was terminated in December 2007 after receiving disability benefits for two years. According to the Plan, Matthew had a limited amount of time in which to bring a claim against his insurer for denying him benefits. The Plan provided that a legal action could be filed no later than three years after proof of disability must be filed.
So when Matthew brought a legal action against his insurer more than a year after the plan limitation had run out his insurer argued it was too late.
All disability insurers governed by ERISA are required to provide plan participants with a Summary Plan Description (“SPD”) designed to simplify and explain important terms of their Plan. Matthew received a SPD but it did not mention this three year limitation and as a result he had no idea the limitation existed – until now.
Insurers Must Include The Contractual Limitations Period In Its SPD
Matthew and his Michigan Disability Attorney argued that ERISA requires insurers to include their plans’ contractual limitations periods in their SPDs. The court agreed.
Even though the Disability Plan included the three year contractual limitation period the insurer must include the same information in its SPD. As the reviewing court explained “the contractual limitation is an integral part of the Plan and [Mathew’s] failure to comply would result in possible loss of benefits; it is reasonable that [Mathew] would rely on the SPD’s silence in determining when he could file a cause of action. The contractual limitation is an essential part of the Plan and must be included in the SPD.”
As a result of the SPD’s silence regarding the contractual limitation, the court concluded that Michigan’s six-year period of limitations for breach of contract applies. Because Matthew brought his claim within the six-year limitation period he was able to proceed with his disability lawsuit. This lawsuit was not handled by our law firm.