The Eastern District of Missouri recently examined whether administrative exhaustion is a prerequisite to an ERISA suit alleging a wrongful denial of employee benefits, where the benefit plan’s language did not include an administrative appeal procedure and the denial letter included only permissive language stating that the claimant “may request a review” of the denial.

Ultimately, the Court focused on the Eighth Circuit’s “sound policy of not wanting courts to review plan administrators’ decisions based on initial, often succinct denial letters in the absence of complete records” and dismissed (without prejudice) the suit for failure to exhaust administrative remedies.

The Court examined and combined two lines of cases. First, as long as the plan offers a “reasonable opportunity” for a “full and fair review” of the denial, and the claimant has notice of the procedure, exhaustion of contractual remedies is required, even if neither the plan, the insurance contract, nor the denial letter explicitly describe the review procedure as a prerequisite to suit. Under the second line of cases, language informing the claimant that an administrative claim may be pursued, as opposed to language stating the administrative claim must be pursued, does not excuse the claimant from administrative exhaustion.

The Court emphasized the practical reasons favoring exhaustion mean that “claimants with notice of an available review procedure should know that they must take advantage of that procedure if they wish to bring wrongful benefit denial claims to court.” Thus, the Plaintiff was required to exhaust the administrative remedy described in permissive terms in the denial letter, even though there was no administrative appeal provision in the plan.

The case is Yates v. Symetra Life Ins Co., No. 19-cv-154 (E.D. Mo. May 26, 2021).