In Wallace v. Oakwood Healthcare, Inc.,
954 F.3d 879 (6th Cir. 2020), the Sixth Circuit addressed whether a claimant must exhaust administrative remedies before filing suit under ERISA where the plan documents are silent as to the claim review process or any exhaustion requirement.
When the defendant insurer in Wallace
denied the claimant’s disability claim, it informed her that not requesting a review within 180 days might “constitute a failure to exhaust the administrative remedies.” The plan documents, however, did not describe the review process or any duty to exhaust remedies. After the claimant filed suit, the insurer moved to dismiss on the basis of a failure to exhaust administrative remedies under ERISA. The district court denied the motion, holding that the claimant did not need to exhaust her administrative remedies because the ERISA plan documents did not require it. Id.
at 885–86. After cross-motions for summary judgment, the district court ruled in favor of the claimant, and the defendant insurer appealed.
Although the Sixth Circuit vacated the district court’s opinion as to the merits of the lawsuit, the Court specifically affirmed the denial of the defendant’s motion to dismiss on the basis of exhaustion. Id.
at 887. Given that ERISA’s implementing regulations require a plan to establish detailed claim procedures, the Court held that mentioning these procedures in a denial letter is insufficient. Id.
at 888. Instead, the Court held that “for a plan fiduciary to avail itself of this Court’s exhaustion requirement, its underlying plan document must – at minimum – detail its required internal appeal procedures.” Id.
opinion reminds plan fiduciaries that, in order to assert an exhaustion defense with respect to an ERISA claim, the applicable plan documents must set forth the claim procedures required before going to court.