Phillips submitted a claim under his employer's benefit plan for total disability benefits. The claim was paid during the two-year "own occupation" period and thereafter was denied, effective July 21, 2010.
The ERISA plan provided that Phillips had the right to appeal within 180 days following receipt of the denial letter. Phillips submitted no appeal of Aetna's decision.
On February 21, 2012, more than a year after the denial, Phillips' attorney sent a letter to Aetna "for settlement purposes only" and offered not to file a lawsuit in exchange for a payment of $150,000. When Aetna declined to settle, Phillips brought an action to recover benefits.
On Aetna's motion for summary judgment, the court determined that Phillips had failed to timely exercise the plan's administrative remedies. Nothing in the record, the court noted, indicated that "the process would have been futile, provided an inadequate remedy, or that Phillips was denied meaningful access to the appeals process."
The court also disagreed with the contention that the settlement letter "was in actuality an appeal in that it disagreed with the last determination of" Aetna. "The letter itself," the court wrote, "expressly states that it is for ‘settlement purposes only,' not for any appeal." Moreover, even if the letter had been an appeal, Phillips "sent it 400 days after the appeals period ended," the court concluded.
As a result, Phillips "failed to timely appeal the denial of benefits" and his claim was barred as a matter of law.
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