If an insurer has denied your claim for benefits under an ERISA group accidental death insurance policy, you may be left wondering what to do next, whether to appeal the denial or to sue the insurance company. Often, the prospect of appealing an ERISA claim denial to the same company that denied the claim to begin with can feel like a futile measure that will only delay your ability to recover your benefits. On the other hand, the insurer’s denial letter states that you must appeal the denial before pursuing a claim in court. In Yates v. Symetra Life Insurance Company, — F.4th –, 2023 WL 2174840 (8th Cir. February 23, 2023) the Eighth Circuit Court of Appeals recently found that an ERISA plan participant may file a lawsuit in federal court to recover benefits denied by the insurer without exhausting the insurer’s administrative remedies by first appealing the denial of benefits with the insurer where no such requirement is set forth in the plan documents, even if the insurer’s denial letter in fact describes such a review process.

After her husband died of a heroin overdose, the Plaintiff, Terri Yates, sought accidental death benefits under an ERISA plan insured by Symetra Life Insurance Company. Symetra denied her claim, and Plaintiff sued, without appealing Symetra’s denial. The district court granted summary judgment in the Plaintiff’s favor. Symetra appealed, arguing that the Plaintiff’s suit was barred by her failure to exhaust internal review procedures and that her husband’s death was excluded from coverage. The Eighth Circuit ultimately affirmed the district court’s decision and found for the Plaintiff on the merits. A discussion of how and why the court affirmed the judgment in favor of the Plaintiff by finding an exclusion inapplicable is found in a separate article on our blog here. However, prior to reviewing the merits of the Plaintiff’s claim, the court first analyzed Symetra’s argument that the Plaintiff was precluded from bringing the ERISA suit because she had failed to exhaust her administrative remedies by not appealing Symetra’s denial of benefits before filing suit.

Symetra essentially argued that because its denial letter to the Plaintiff provided that she could request a review of its decision by submitting a written appeal within 60 days of receipt of the letter, and that she had the right to file a civil action following Symetra’s completion of the appeals process, she was therefore required to make such an appeal prior to bringing a legal action under ERISA. Importantly, the district court found that the Employee Benefits Insurance Certificate and a Group Insurance Policy issued to the policyholder (the Plaintiff’s husband’s employer), constituted the “plan documents.” Neither the Certificate nor the Policy mentioned that a claimant had the right, or was required, to make an internal appeal of a denial of benefits before taking legal action. The district court concluded that the Plaintiff was not required to exhaust administrative remedies suing, and Symetra appealed.

The court acknowledged that an ERISA claimant generally must exhaust the administrative remedies required under her plan, except where pursuing such administrative remedies would be futile or there are no administrative remedies to pursue. Symetra took the position that it described the administrative remedies in its denial letter, and therefore the Plaintiff needed to exhaust those remedies before suing. However, the court agreed with the district court’s conclusion that because the written plan documents (i.e., the Certificate and the Policy, but NOT the denial letter) did not mention any appeals process or administrative remedies, Plaintiff was therefore not subject to the requirement of exhausting administrative remedies.

The court provided four pillars supporting its conclusion.

First, the requirement that a claimant must exhaust her administrative remedies before filing an ERISA lawsuit has consistently been premised on those remedies being expressly prescribed in the written plan documents, which did not include Symetra’s denial letter to the Plaintiff. The requirement to exhaust administrative remedies precludes an ERISA lawsuit only if a claimant “fails to pursue and exhaust administrative remedies that are clearly required under a plan.” McKennan v. Meadowvale Dairy Emp. Benefit Plan, 973 F.3d 805, 808 (8th Cir. 2020) (emphasis added). Thus, because the written plan documents did not prescribe such administrative remedies, the fact that the Plaintiff did not appeal Symetra’s denial of her claim did not bar her from suing.

Second, the court noted that “one of ERISA’s central goals is to enable beneficiaries to learn their rights and obligations at any time” by “examining” their written plan documents. Wallace v. Oakwood Healthcare, Inc., 954 F.3d 879, 887 (6th Cir. 2020) (quoting Curtiss-Wright Corp. v. Schoonejongen, 514 U.S. 73, 83 (1995). Essentially, a tenet of ERISA is that a plan beneficiary like the Plaintiff should be able to completely understand her rights and obligations, including prior to making a claim, by reading the written plan documents. For Symetra to introduce an appeals requirement only when denying her claim therefore diminishes ERISA’s purpose.

Third, the court emphasized ERISA’s requirement that the terms of a plan be committed to written plan documents, specifically for the purpose discussed above, that a participant or beneficiary can review those documents to “learn her rights and obligations under the plan at any time.” Curtiss-Wright Corp., supra, 514 U.S. at 83. Thus, requiring the Plaintiff to exhaust internal review procedures that she would not be able to find in the plan documents, such as appealing Symetra’s denial of her claim, would mean that the plan documents are unreliable. The court noted that Symetra was essentially asking it to impose a requirement that was not in the contract between the parties, and it declined to do so.

Fourth, the court found that not requiring the Plaintiff to exhaust administrative remedies is consistent with ERISA’s implementing regulations. 29 C.F.R. Section 2560.503-1(a) dictates that a plan’s appeal procedures are reasonable only if it describes those procedures in a summary plan description, which must describe, inter alia, “[t]he procedures governing claims for benefits[,] . . . applicable time limits, and remedies available under the plan for the redress of claims which are denied in whole or in part.” 29 C.F.R. Section 2520.102-3(s). Because Symetra’s written plan documents did not provide for post-denial remedies, they therefore do not satisfy these requirements.

Symetra argued that its denial letter triggered a requirement that the Plaintiff exhaust administrative remedies, but the court found this argument lacking. Symetra cited a previous decision by the court in which it held that exhaustion of administrative remedies is required even when a denial letter does not expressly notify a beneficiary that appeals must be exhausted prior to bringing an ERISA suit. Kinkead v. Se. Bell Corp. Sickness & Accident Disability Benefit Plan, 111 F.3d 67, 69 (8th Cir. 1997). However, the court pointed out that the plan documents in Kinkead “contain[ed] provisions . . . establishing an internal procedure for further review” of denied claims. Id. at 69-70. Kinkead did not address the present situation of whether a beneficiary is required to exhaust non-contractual review procedures that are not included in the written plan documents.

Symetra also cited a case in which the court had rejected the argument that exhaustion was not required where plan contract language suggested that an appeal of a denied claim was “optional rather than mandatory.” Wert v. Liberty Life Assurance Co. of Boston, Inc., 447 F.3d 1060, 1061 (8th Cir. 2006). The court distinguished its decision in Wert, that an exhaustion requirement applies if a beneficiary “has notice of” the administrative remedies made available in the written plan documents, even if the documents “do not explicitly describe” those remedies “as mandatory or as a prerequisite to suit.” Id. at 1063. The vital distinction is that whereas the decision in Wert contemplates a beneficiary having notice of remedies that are included in the plan documents, here Symetra was arguing for such a requirement despite the Plaintiff’s plan documents not mentioning any such remedies.

If your insurance company has denied your ERISA accidental death insurance claim for benefits, you may be required to appeal the decision, but not necessarily; you may be able to immediately file a lawsuit to recover your benefits. The experienced life and accidental death insurance attorneys at McKennon Law Group PC can assist you to determine whether you are required to exhaust your administrative remedies before suing the insurer to recover your benefits.