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The Employee Retirement Income Security Act (ERISA) provides courts with discretionary authority to award reasonable attorney’s fees to parties who achieve “some degree of success on the merits” in benefits litigation. The recent decision in Daniel C. v. Chevron Corp., U.S. Dist. LEXIS 103623 (N.D. Cal. May 20, 2025) illustrates the evolving judicial approach to determining when a remand order constitutes sufficient success to warrant a fee award, while also demonstrating how courts balance limited victories against the remedial purposes of ERISA. This case provides valuable guidance for practitioners navigating the intersection of procedural victories and substantive success in ERISA litigation.

Factual Background and Procedural History

The Plaintiff in this case initially applied for short-term disability benefits due to major depressive disorder and occupational problems. After ReedGroup approved his initial claim from October through December 2017, the Plaintiff suffered a traumatic brain injury in a motor vehicle accident on December 31, 2017. ReedGroup subsequently approved extensions for short-term disability and granted long-term disability benefits from April 2, 2018 through June 30, 2020, totaling 27 months of coverage.

The critical juncture arose when ReedGroup denied the plaintiff’s continued long-term disability benefits starting July 1, 2020. Under the plan’s terms, employees must satisfy the usual occupation standard for the first 24 months, but thereafter must meet the more stringent “Any Occupation” standard to continue receiving benefits. On the parties’ cross-motions for summary judgment, the Court held that Chevron failed to demonstrate that it made a valid delegation of authority to ReedGroup and, thus, the Court would review ReedGroup’s denial of Plaintiff’s benefits de novo. However, as the parties agreed, the Court could not conduct a de novo review on a motion for summary judgment. Instead, the Court conducted that review at the bench trial. On the parties’ cross-motions for judgment under Federal Rule of Civil Procedure 52(a) the Court held that ReedGroup erred in failing to conduct a vocational analysis and remanded this case for further proceedings in accordance with that Order. While the Court ultimately concluded that ReedGroup erred and remanded Plaintiff’s claim for benefits for further review, the Court noted that the Order was not uniformly in favor of Plaintiff’s positions. The Court rejected Plaintiff’s argument that the Court should consider extra-record evidence. Thus, the Court’s review could not include the audiological evaluation by Dr. Samantha Nieves that was not part of the administrative record. The Court also rejected Plaintiff’s argument that Court could not consider medical documentation that ReedGroup did not specifically discuss, such as Plaintiff’s June 4, 2019 CT scan. Instead, the Court held that it must review all supporting medical documentation to determine whether ReedGroup correctly found it inadequate to show Plaintiff was disabled under the newly applicable “Any Occupation” standard.

Thus, the Court concluded that it could not determine whether Plaintiff meets the disability definition under the Plan without any vocational analysis and remanded Plaintiff’s claim to ReedGroup for an initial factual determination based on the record with additional vocational evidence. Plaintiff filed a motion for attorney’s fees and to amend the judgment to include an award of benefits pending ReedGroup’s determination of Plaintiff’s disability benefits on remand.

The Legal Standard for ERISA Attorney’s Fees

ERISA’s attorney’s fee provision, codified at 29 U.S.C. § 1132(g)(1), grants courts discretionary authority to award reasonable attorney’s fees to parties who demonstrate some degree of success on the merits Gross v. Sun Life Assurance Co. of Can., 880 F.3d 1 (1st Cir. 2018). The Supreme Court’s decision in Hardt v. Reliance Standard Life Insurance Co. established that fee claimants need not be prevailing parties in the traditional sense, but must achieve more than “trivial success on the merits or a purely procedural victory.” Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242 (2010).

As the Court explained in Daniel C., a party satisfies this requirement if the court can fairly call the outcome of the litigation some success on the merits without conducting a lengthy inquiry into the question whether a particular party’s success was substantial or occurred on a central issue. This standard reflects Congress’s failure to “abandon historic fee-shifting principles and intuitive notions of fairness” in drafting the ERISA fee provision Hardt v. Reliance Standard Life Ins. Co., 560 U.S. 242 (2010).

Remand as Success on the Merits

The Daniel C. court joined the growing consensus of federal courts that recognize remand orders as constituting success on the merits under the Hardt standard. The court noted that most courts have, in the wake of Hardt determined that a remand to a plan administrator – by itself – does in fact constitute some success on the merits. This conclusion aligns with decisions which found that a remand for further administrative proceedings is not a trivial success where it is based on a court determination that ERISA rights were violated.

The court’s analysis focused on whether the remand represented a meaningful benefit to the fee-seeker rather than a mere procedural victory. In this case, the court determined that the reversal of the determination of denial and the remand for consideration with a vocational analysis constitutes a sufficient degree of success to warrant attorney’s fees. This holding reflects the practical reality that remand orders often provide plaintiffs with renewed opportunities to obtain benefits that were previously denied.

Application of the Hummell Factors

For cases where a party achieves some success but does not prevail completely courts apply the five-factor analysis established in Hummell v. S.E. Rykoff & Co., 634 F.2d 446, 453 (9th Cir. 1980). These factors examine: (1) the opposing parties’ culpability or bad faith; (2) their ability to satisfy a fee award; (3) whether an award would deter similar conduct; (4) whether the requesting party sought to benefit all plan participants or resolve significant ERISA questions; and (5) the relative merits of the parties’ positions.

The Ninth Circuit has emphasized that application of the Hummell actors must recognize the remedial purpose of ERISA in favor of participants and beneficiaries in cases where participants must resort to litigation to recover wrongfully withheld benefits. While the Daniel C. court did not extensively analyze each Hummell factor, the decision to award fees suggests that these considerations supported the Plaintiff’s position, particularly given ERISA’s participant-protective purposes.

Limited Success and the Fifty Percent Reduction

Despite finding that the remand constituted success on the merits, the court significantly reduced the Plaintiff’s fee award, cutting the lodestar amount by fifty percent. The court applied the framework, which requires courts to consider whether the plaintiff failed to prevail on unrelated claims and whether the level of success makes the hours expended a satisfactory basis for a fee award.

The Court found that while there were no unrelated claims in the case, Plaintiff’s success was limited. Specifically, the court noted that it “only remanded on the narrow issue of requiring a vocational analysis” and that the “Plaintiff was unable to demonstrate that the medical evidence established that he was disabled.” The Court emphasized that it did not find that defendant “engaged in any egregious or obviously inappropriate conduct” and that the determination requiring a vocational analysis “was not a foregone conclusion based on the facts of this case.”

This reduction reflects the Court’s calibration of fee awards to match the degree of success achieved. The Court awarded a total of $92,463.75 in attorney’s fees, representing exactly half of the original lodestar calculation of $184,927.50. The Court found the requested hourly rates of $600 and $850 reasonable, as well as the total hours expended.

Broader Implications for ERISA Litigation

The Daniel C. decision contributes to the developing body of law recognizing that remand orders can constitute meaningful success under ERISA’s fee-shifting provision. This trend encourages vigorous enforcement of ERISA’s protections by ensuring that participants who successfully challenge flawed benefit determinations can recover their legal costs, even when they do not obtain immediate benefit awards.

However, the Court’s fifty percent reduction demonstrates judicial awareness of the need to calibrate fee awards appropriately. Courts must balance ERISA’s remedial purposes against the risk of excessive fee awards for limited victories. The Daniel C. approach suggests that while remand orders generally satisfy the Hardt standard, the scope and significance of the remand will influence the ultimate fee calculation. While the fifty percent reduction reflects the limited nature of the plaintiff’s success, the underlying fee award validates the importance of vigorous advocacy in ERISA benefits litigation and supports the statute’s participant-protective purposes. Future courts will likely continue to grapple with the appropriate balance between encouraging ERISA enforcement and ensuring that fee awards remain proportionate to the success achieved.

The recent decision in 2025 U.S. Dist. LEXIS 103623 (N.D. Cal. May 20, 2025), highlights the complexities of ERISA litigation, particularly regarding delegation of discretionary authority and the implications for judicial review. This blog explores the facts, legal holdings, and broader implications of the court’s ruling.

Case Background: From Disability to Dispute

Daniel C., a Chevron employee, initially sought short-term disability leave in October 2017 due to major depressive disorder and workplace conflicts. Chevron’s third-party claims administrator, ReedGroup, approved the request. However, Daniel’s circumstances changed dramatically when he was struck by a vehicle on December 31, 2017, resulting in a traumatic brain injury and a ten-day coma. In June 2018, Daniel applied for long-term disability (LTD) benefits, citing his brain injury as the primary cause of his disability. ReedGroup approved the benefits through June 2020 but later denied further benefits, citing insufficient medical documentation and the exhaustion of mental health-related disability limits. The parties agreed that Chevron’s plan document vested the company with discretionary authority and permitted delegation of that authority. However, they disagreed about whether Chevron had properly delegated such authority to ReedGroup. This distinction proved crucial, as proper delegation would result in deferential arbitrary and capricious review, while improper delegation would trigger the more demanding de novo standard.

Delegation of Authority: A Procedural Misstep

One of the central issues in the case was whether Chevron had properly delegated discretionary authority to ReedGroup, which would determine the standard of judicial review. Under ERISA, courts apply de novo review to benefit denials unless the plan explicitly grants discretionary authority to the administrator. While Chevron’s plan document allowed for delegation, the court found that Chevron failed to meet ERISA’s requirement for a written instrument specifying the fiduciary responsibilities delegated to ReedGroup.

The court’s analysis focused on ERISA’s specific requirements for delegating fiduciary responsibilities. Under federal law, any delegation of fiduciary responsibilities must occur pursuant to a written instrument that specifies the fiduciary responsibilities so delegated to each such person. The court emphasized that naming ReedGroup in the Summary Plan Description (SPD) alone could not satisfy this requirement.

The court relied heavily on the Supreme Court’s decision in CIGNA Corp. v. Amara, 563 U.S. 421 (2011), which established that SPDs do not themselves constitute the terms of the plan. The court distinguished the case from Mull v. Motion Picture Industry Health Plan & Bd. of Dirs. of MPI Health Plan, 2019 U.S. Dist. LEXIS 212081, where the Ninth Circuit found an SPD could constitute plan terms, noting that in Mull there was no separate plan document and the SPD explicitly stated it constitutes both the Plan document and the Summary Plan Description.

Thus, even though Chevron argued that the SPD functions as the designation instrument, communicating to plan participants the name of the entity that serves as the claims administrator and decides all claims, the court rejected this argument, finding that the SPD could not function as the delegation instrument because it did not specify the fiduciary responsibilities delegated to ReedGroup. The court emphasized that naming ReedGroup in the SPD was insufficient to constitute a valid delegation. The SPD lacked specific language identifying the fiduciary responsibilities delegated to ReedGroup, and the court noted that SPDs are not formal plan documents under ERISA unless they specifically state that they are part of the plan documents. See Krebsbach v. Travelers Pension Plan, 2024 U.S. Dist. LEXIS 206671; Collins v. Life Ins. Co. of N. Am., 2023 U.S. Dist. LEXIS 50683. This failure to properly delegate authority in the plan itself, as opposed to the SPD, led the court to apply de novo review, a more rigorous standard that favors claimants.

Implications of De Novo Review

The court’s decision to apply de novo review stripped ReedGroup’s denial of benefits of the deference typically afforded under the arbitrary and capricious standard. Under de novo review, the court independently evaluates the evidence without deferring to the administrator’s decision. This shift in the standard of review often benefits claimants, as it allows for a more thorough examination of the evidence supporting their claims.

The court’s ruling also underscores the importance of compliance with ERISA’s technical requirements for delegation. Plan sponsors must ensure that any delegation of discretionary authority is clearly documented in a formal written instrument that meets ERISA’s standards.

Broader Implications for Plan Administrators

This case serves as a cautionary tale for plan administrators and sponsors. The court’s strict interpretation of ERISA’s delegation requirements suggests that informal arrangements or general references in SPDs will not suffice. Plan sponsors must carefully document delegation arrangements to avoid procedural pitfalls that could lead to unfavorable judicial review standards. Additionally, the decision highlights the potential financial consequences of procedural missteps.

Procedural Outcome and Next Steps

The court’s denial of summary judgment for both parties reflects the complexity of the issues and the need for further factual development under the de novo standard. The case has been remanded for additional proceedings, with a hearing scheduled for August 2025. This procedural outcome demonstrates the challenges of resolving ERISA disputes, particularly when the standard of review is contested.

Conclusion: Lessons for Practitioners

The decision underscores the importance of precision in ERISA delegation procedures and the potential impact of procedural victories in litigation. For plan sponsors, the case serves as a reminder to ensure compliance with ERISA’s technical requirements to avoid unfavorable outcomes. For claimants, the decision highlights the value of pursuing procedural challenges, as even partial success can lead to significant advantages, including attorney’s fees, which were awarded in a later decision by the Court. As ERISA litigation continues to evolve, practitioners must remain vigilant in navigating the procedural and substantive complexities of these cases.

Court Rejects MetLife’s Long-Term Disability Denial: A Win for Claimants With Cognitively Demanding Occupations In Long-Haul Covid Disability Case

Recent federal court decisions have begun to clarify how long-haul COVID-19 symptoms are evaluated in disability insurance claims. The Central District of California recently issued a highly favorable ruling in an ERISA long-term disability (“LTD”) case involving a disability claimant asserting a disability claim for long-haul Covid, emphasizing an insurer’s obligation to consider the specific duties of a highly cognitive occupation when assessing a disability claim. I

In Baltes v. Metropolitan Life Insurance Co., __ F.Supp.3d __,2025 WL 3199464 (C.D. Cal. Nov. 12, 2025), the Court granted the plaintiff’s Federal Rule of Civil Procedure 52 motion challenging the denial of LTD benefits. This holding is a strong statement that when a disability plan requires a claimant to be unable to perform the “Substantial and Material Acts” of their job, a proper assessment requires reviewing the actual job description, not just the title.

The court emphasized the importance of treating-physician evidence and recognized that subjective symptoms—such as fatigue, cognitive impairment, and “brain fog”—can be credible and disabling, even without classic objective markers. Insurers’ reliance on “paper reviews” by consultants who never examined the claimant or reviewed the full medical record was criticized, especially when the disability plan did not require objective proof. The court’s analysis underscores that isolated activities do not undermine disability if the claimant cannot sustain regular work-like function, and that medical evidence must be considered in the context of the claimant’s actual job duties.

Statement of Facts

The plaintiff, Austin Baltes, was a Senior Software Engineer at Google. His employer-provided long-term disability benefits were administered by Metropolitan Life Insurance Company (“MetLife”) under the Google LLC Group Employee Benefit Plan, which is governed by the Employee Retirement Income Security Act of 1974 (“ERISA”).

In this case, the plaintiff, Austin Baltes, initiated a claim for LTD benefits under a group insurance policy issued by MetLife. The claim was filed after Baltes experienced symptoms that rendered them unable to perform the essential duties of their occupation. The initial submission included medical records, physician statements, and documentation of the disabling condition. As is standard in ERISA disability claims, the insurer requested additional information to substantiate the claim, including detailed treatment notes and functional capacity assessments. The plaintiff complied with these requests, providing comprehensive evidence of ongoing impairment and the impact on daily activities and work responsibilities.

MetLife reviewed the submitted materials and conducted its own evaluation, which typically involves consulting with internal or external medical professionals. In many cases, insurers rely on “paper reviews” rather than in-person examinations, and may request further clarification from treating physicians. In this instance, the insurer ultimately denied the claim, citing insufficient objective evidence or discrepancies in the medical documentation. The denial letter outlined the rationale, referencing policy provisions and the insurer’s interpretation of the medical evidence. The plaintiff responded by submitting an administrative appeal, supplementing the record with additional medical opinions and clarifications regarding the nature and severity of the disability.

After exhausting administrative remedies, Baltes filed suit in federal court under ERISA, challenging the denial of benefits. The litigation focused on whether the insurer’s decision was supported by substantial evidence and whether the claims process complied with ERISA’s procedural requirements. The court reviewed the administrative record, including all medical and vocational evidence, and considered arguments from both parties regarding the interpretation of policy terms and the credibility of the evidence. Ultimately, the court’s decision hinged on whether the insurer gave appropriate weight to the treating physician’s opinions and whether the denial was reasonable in light of the entire record. The outcome of the case provides guidance on best practices for both claimants and insurers in handling disability claims and navigating ERISA litigation.

Legal Discussion

**The Critical Role of De Novo Review in ERISA Cases**

The outcome of this case was significantly influenced by the standard of review. As an ERISA-governed claim, the Court determined MetLife’s benefit decision would be reviewed de novo. This standard means the Court was not limited to checking for an abuse of discretion, but instead “independently assessed whether the evidence showed the plaintiff was unable to perform” his job duties. A de novo standard of review empowers the court to weigh the evidence itself, often providing a fairer path for claimants whose denials appear to disregard credible medical proof.

Defining the “Substantial and Material Acts” of an Occupation

For highly specialized or cognitively demanding roles, the specific job duties are the most crucial element in determining disability. As a Senior Software Engineer, Mr. Baltes’s occupation required high-level functions like sustained concentration, analytical reasoning, multi-tasking, complex problem-solving, and code review. These tasks are essential, or “Substantial and Material,” to the job, and an inability to perform them with “reasonable continuity” is the basis of a valid disability claim. Insurance companies often attempt to simplify these roles as merely “sedentary” desk jobs, ignoring the mental dexterity required.

The Fatal Flaw: Failure to Review the Job Description

Perhaps the central legal issue in the Court’s analysis was MetLife’s failure to provide its consulting physicians with the plaintiff’s actual job description. MetLife attempted to argue that the job title and descriptions provided by third parties were sufficient. The Court, however, dismissed this argument, holding that the “question presented to the physician consultants—whether Baltes is disabled under the Plan—is dependent on ‘the specific duties required by [his] job'”.

The Court’s Scrutiny of Medical Opinions

The Court further undermined the credibility of the opinions issued by MetLife’s consulting physicians, such as Dr. Gramm, because they lacked the necessary context. The Court pointed out the deficiency, noting a physician consultant’s conclusion was questionable “given he did not review Baltes’ job description and there is no indication he was aware of Baltes’ job-related tasks”. Without understanding the actual duties required for a Senior Software Engineer, the consultants could not reliably determine whether Mr. Baltes could perform the “substantial and material acts” of his usual occupation.

The Rule: Actual Duties Matter

The clear takeaway from this order is that an insurer cannot substitute a job title for a detailed job description when adjudicating a disability claim under the “own occupation” definition. The Court explicitly stated: “Neither Baltes’ job title alone nor third-party descriptions of his job duties is an adequate substitute for Baltes’ actual job description”. This precedent forces insurers to conduct a fact-specific, individualized inquiry into the physical and cognitive demands of a claimant’s specific role before issuing a denial.

Conclusion

The ruling is a crucial victory for individuals in high-level, cognitively demanding careers seeking LTD benefits under ERISA. The decision underscores that simply performing a paper review of generic medical records, without understanding the unique and specific professional demands of the job, is a flawed basis for an LTD denial, particularly when a court reviews the claim de novo. For anyone whose long-term disability claim has been denied, this case serves as an important reminder to challenge an insurer’s reliance on insufficient vocational analysis.

California Insurance Code § 10110.6 has long been a battleground in ERISA litigation. The statute voids provisions that grant an insurer or administrator discretionary authority to interpret plan terms or decide eligibility for benefits. While courts have applied § 10110.6 routinely to life and disability insurance, federal district courts have split on whether it also reaches health insurance plans. In Torres v. Emsurgcare (unpublished Ninth Cir. 2025), the Ninth Circuit Court of Appeals came down on the side that health insurance is covered—adding weight to the growing view that § 10110.6 is not limited to life and disability. This matters because once the discretionary clause is void, courts review denials de novo, not under a deferential abuse-of-discretion standard.

The plaintiff, covered under a group health plan, challenged the denial of benefits and argued that because the plan was delivered in California and contained a discretionary clause, the clause was void under § 10110.6 and the court should apply de novo review. UnitedHealthcare Insurance Company (“United”) countered that § 10110.6 was limited to life and disability insurance. The court rejected this narrow reading, holding that the statute’s broad language and decisions by the California Courts of Appeal support its application to all insured health policies issued or delivered in California.

The Court held that California’s intermediate appellate courts have repeatedly observed that health insurance is a form of disability insurance for purposes of the California Insurance Code. See, e.g., Ticconi v. Blue Shield of Cal. Life & Health Ins. Co., 160 Cal.App. 4th 528, 539 n.7 (2008), petition for review denied, 2008 Cal. LEXIS 7013 (June 11, 2008) (“[H]ealth insurance … is a type of disability insurance.”); Nieto v. Blue Shield of California Life & Health Ins. Co., 181 Cal.App.4th 60, 79 n.4 (2010) (“[H]ealth insurance is a type of disability insurance.”); Blue Shield of California Life & Health Ins. Co. v. Superior Ct., 192 Cal.App.4th 727, 733 (2011) (“Health insurance policies are considered a form of disability insurance.”).

Although Torres departs from decisions like Bain v. United Healthcare, 2016 WL 4529495, at *7 (N.D. Cal. Aug. 30, 2016) which declined to apply § 10110.6 to health policies, it reinforces a growing body of authority supporting a broader interpretation of the statute in line with its plain language and purpose. For ERISA litigants in California, particularly those challenging denials under insured health plans, Torres provides strong support for invoking § 10110.6 to seek de novo review—often a critical factor in the outcome of benefit disputes.

The U.S. District Court for the Central District of California recently granted long-term disability (“LTD”) benefits to Plaintiff Hettihewage Dharmasena following an ERISA appeal in Dharmasena v. Metropolitan Life Insurance Co., __ F. Supp. 3d __, 2025 WL 1563970 (C.D. Cal. May 29, 2025). This decision offers important guidance on how courts evaluate disability claims under de novo review, address disputes over the onset of disability, and treat claims for retroactive disability periods.

Mr. Dharmasena was employed as a technical professional covered under a group LTD policy administered by MetLife. After developing progressive orthopedic and neurological impairments, including degenerative disc disease and chronic pain, he stopped working on February 4, 2022, and submitted a claim for LTD benefits. MetLife denied the claim, asserting that his disability began on February 7, 2022—after his February 4 termination—making him ineligible for benefits because he was not “in active service” when his disability commenced.

Under the plan, Mr. Dharmasena was required to demonstrate that, due to sickness or injury, he was unable to perform the material and substantial duties of his regular occupation while still covered under the policy. Despite extensive medical documentation showing significant functional limitations, MetLife determined that he was not disabled within the meaning of the plan and denied the claim. On appeal, MetLife upheld its denial, maintaining that the evidence did not establish a qualifying disability prior to the termination date.

Mr. Dharmasena then filed suit under ERISA § 502(a)(1)(B), challenging both MetLife’s interpretation of the plan and its evaluation of the evidence. The court applied a de novo standard of review, meaning it independently assessed the administrative record without deference to MetLife’s decision. Under this standard, the burden remained on the plaintiff to prove by a preponderance of the evidence that he was both disabled and covered under the plan. The court found that the medical evidence—physician notes, diagnostic findings, and consistent reports of pain and functional decline—demonstrated that Mr. Dharmasena was disabled within the meaning of the policy prior to his termination.

Significantly, the court addressed the treatment of retroactive disability periods. It held that an ERISA claimant may establish entitlement to LTD benefits for past periods of disability if the medical evidence shows that he was disabled during those times, even if the claim is filed later or the claimant was not under continuous medical care. Rejecting MetLife’s argument that the absence of ongoing treatment during the retroactive period defeated the claim, the court emphasized that what matters is not continuous physician contact, but the totality of reliable medical evidence showing functional incapacity during the relevant timeframe.

The court’s analysis is particularly important for claimants who may be unable to promptly submit claims due to the very nature of their impairments. The decision confirms that ERISA permits retroactive awards where credible, contemporaneous medical documentation demonstrates disability—even if gaps in treatment exist. The ruling reinforces that a lack of ongoing visits during the claimed period does not necessarily negate disability; the key question is whether the record, taken as a whole, supports that the claimant met the policy’s definition of disability.

By awarding LTD benefits to Mr. Dharmasena, the court reaffirmed the central role of objective medical evidence and fair evaluation in ERISA litigation. The case underscores that plan administrators cannot deny valid claims based on hypertechnical timing arguments or procedural formalities when the medical record clearly establishes disability during the coverage period. For ERISA claimants and practitioners, Dharmasena provides clear and persuasive authority supporting retroactive disability determinations grounded in the substance of the evidence rather than rigid procedural timelines.

If your employer sponsors a group insurance plan for its employees, insurers and plan administrators owe you fiduciary duties under the Employee Retirement Income Security Act of 1974 (ERISA). They are obligated to look out for your interests; when administering the plan and claims, they are obligated to ensure that you are well-informed as to the policy terms and must take whatever steps are necessary for your application to be completed and submitted properly. Likewise, insurers must prioritize your interests as an insured over their interests, for example, by ensuring that your claim receives a full and fair review.

When your disability insurer and plan administrator delay making decisions, you can feel trapped in limbo—unable to return to work, unable to obtain benefits, and uncertain of their rights. ERISA was designed in part to prevent or minimize such situations by imposing strict deadlines for deciding claims and appeals. When insurers fail to comply, you may be deemed to have exhausted their administrative remedies and can bring a lawsuit against the insurer and plan administrator in federal court rather than continue waiting for a decision on your claim.

Understanding the significance of these deadlines, and how courts have enforced them is essential. The regulations are not optional guidelines; they are mandatory requirements. Federal courts have consistently emphasized that the ERISA regulations require strict compliance and that claimants are entitled to judicial review if administrators fail to act on time.

The Regulatory Framework

ERISA’s claims procedure regulation, 29 C.F.R. § 2560.503-1, sets precise timeframes for resolving disability claims. For appeals of denied disability claims, an administrator must issue a decision within 45 days of receipt of the appeal. Administrators may take up to an additional 45 days, but only in “special circumstances.” Additionally, the administrator must notify the claimant of its need for additional review time before the end of the initial 45 days, and the need must be justified by the circumstances. The intent is clear: disability claimants should not be left in indefinite uncertainty.

The regulations also provide a powerful remedy when administrators fail to comply. Section 2560.503-1(l)(2) states that if a plan fails to establish or follow reasonable claims procedures that comply with the regulations, the claimant “shall be deemed to have exhausted the administrative remedies available under the plan.” This deemed exhaustion rule allows the claimant to immediately file suit under ERISA § 502(a).

Why Timing Rules Matter

The ERISA deadlines reflect the Department of Labor’s recognition that disabled claimants often face financial hardship and medical crises. The Department of Labor explained in its 2016 amendments that strict timing rules “are critical to ensuring a full and fair review” and that violations “undermine the very protections the regulation was designed to provide.” The Department of Labor further emphasized that delays are harmful because they deprive claimants of prompt resolution and can cause significant harm.

This is why courts have been reluctant to excuse missed deadlines. Allowing insurers to delay without consequence would undermine ERISA’s goal of ensuring timely, fair, and transparent claims handling.

One of the most influential cases on this issue is Halo v. Yale Health Plan, 819 F.3d 42 (2d Cir. 2016). The plan administrator denied the plaintiff’s medical benefits and the plaintiff challenged the denial The court emphasized that when a plan fails to comply with the ERISA regulations, courts must apply de novo review unless the plan shows that its violation was both inadvertent and harmless. The court explained:

[W]e hold that, when denying a claim for benefits, a plan’s failure to comply with the Department of Labor’s claims-procedure regulation, 29 C.F.R. § 2560.503–1, will result in that claim being reviewed de novo in federal court, unless the plan has otherwise established procedures in full conformity with the regulation and can show that its failure to comply with the regulation in the processing of a particular claim was inadvertent and harmless.

Id. at 45.

Halo marked a shift away from leniency toward insurers and underscored that if insurers and administrators do not comply with the ERISA regulations, the regulations will be strictly enforced.

The Seventh Circuit reached a similar conclusion in Fessenden v. Reliance Standard Life Insurance Co., 927 F.3d 998 (7th Cir. 2019). Reliance Standard failed to provide a timely decision on the plaintiff’s claim and argued that the delay was minimal and caused no prejudice. The Seventh Circuit flatly rejected this position and held that Reliance Standard forfeited a deferential standard of review by failing to strictly comply with the deadline for issuing final decision.

The court held that the arbitrary and capricious standard:

cannot be applied to an untimely decision because there is nothing to review at the time that administrative remedies are deemed exhausted. There is no explanation for a claimant to read and understand. And if the claimant files suit before the decision arrives, there is neither an exercise of discretion to which a court could defer nor anything for the court to use to measure the degree of the administrator’s compliance.
Id. at 1005 (7th Cir. 2019); See also Jebian v. Hewlett-Packard Co. Emp. Benefits Org. Income Prot. Plan, 349 F.3d 1098, 1104 (9th Cir. 2003) (“[A] contrary rule would allow claimants, who are entitled to sue once a claim had been ‘deemed denied,’ to be ‘sandbagged’ by a rationale the plan administrator adduces only after the suit has commenced.”);  Fed. Power Comm. v. Texaco, Inc., 417 U.S. 380, 394–97, 94 S.Ct. 2315, 41 L.Ed.2d 141 (1974) (acknowledging that the Commission had “great discretion” but explaining that failure to exercise that discretion at the appropriate time cannot be remedied with “post hoc rationalizations” (citation omitted)). The court refused to allow Reliance Standard to benefit from its own delay, recognizing that timeliness is a core component of ERISA’s regulatory scheme.

The Department of Labor’s Position

The Department of Labor has been explicit that missed deadlines are not trivial. In its commentary accompanying the 2018 amendments to the ERISA claims regulations, the Department of Labor explained that the “de minimis exception” is extremely narrow. Timing violations are not de minimis unless they are truly inconsequential, beyond the plan’s control, and non-prejudicial. Examples might include a short delay due to a natural disaster or a computer outage outside the insurer’s control. By contrast, routine procedures by administrators that result in decision not being provided on time are not de minimis and therefore will not be excused.

Practical Implications for Claimants

For claimants, understanding these ERISA rules is critical. If an insurer fails to issue a decision within the required timeframe, the claimant has the right to proceed directly to federal court without waiting for a decision. This prevents insurers from using delay as a tactic to wear down claimants or postpone payment indefinitely.

Understanding these rules has significant strategic value. A claimant can seize control of the process from the insurer or administrator and shift the dispute into a federal forum, where insurers and administrators face judicial scrutiny. Moreover, courts may apply de novo review rather than deferential review when procedural violations occur, further leveling the playing field. De novo review means that the court is looking at the evidence to determine whether it supports the claim, whereas deferential review means that the court looks at the administrator’s decision to determine whether the denial was arbitrary and capricious. De novo review is therefore generally preferable for claimants.

Conclusion

The lesson is clear: insurers must strictly comply with ERISA’s timing requirements. When they do not, claimants may treat their remedies as exhausted and seek immediate judicial relief. Courts have consistently enforced this principle, emphasizing that delays are not harmless and that claimants should not suffer the consequences of insurer inaction.

For claimants and practitioners, vigilance is essential. If your insurer has missed a deadline, you may not need to wait. You may have the right to move directly into federal court and press your claim under ERISA. These protections reflect ERISA’s purpose: ensuring that claimants receive timely, fair, and meaningful review of their claims. Insurers who fail to honor that mandate do so at their peril. If you have a disability claim that needs to be reviewed, call the highly experienced disability insurance lawyers at McKennon Law.

ERISA Attorney’s Fees: When Remand Orders Constitute Success on the Merits