Court Denies Insurer’s Motion to Dismiss, Finding Plan Language Did Not Clearly Require Administrative Exhaustion Prior to Filing Suit

Posted in: Appeals, ERISA, Insurance Litigation Blog, Policy Interpretation September 04, 2019

Ordinarily, a participant or beneficiary of a plan governed by the Employee Retirement Income Security Act of 1974 (“ERISA”) must avail himself or herself of the plan’s internal review procedures before bringing a civil action in federal court for recovery of plan benefits.  This includes group ERISA plans offering long-term disability, life, health or accidental death benefits.  Although ERISA does not explicitly require exhaustion of administrative remedies, federal courts have held that an ERISA plan participant must exhaust the plan’s administrative appeal procedure before filing a federal lawsuit.  See Vaught v. Scottsdale Healthcare Corp. Health Plan, 546 F.3d 620 (9th Cir. 2008).  However, according to the Ninth Circuit, this exhaustion requirement applies only if the plan itself requires exhaustion.  …

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