Your disability plan administrator might be one vague letter away from a courtroom disaster
A missed 45-day deadline just cost a disability plan more than $233,000. HR benefits managers, the question is: could yours be next?
When an employer sponsors a long-term disability plan, the legal responsibility for how that plan operates does not fully transfer to whoever administers it. Under federal law, the plan itself must comply – meaning the obligations fall on the plan and its administrator, not simply on the insurer handling the paperwork. That is the part of a March 3, 2026 federal appeals court ruling that every HR benefits professional should read carefully.
The case centers on Heather Cogdell, a Principal Business Process Engineer at MITRE Corporation. In July 2021, she contracted COVID-19 and developed long-COVID symptoms, including intense fatigue and sporadic headaches. She took Family and Medical Leave Act leave and worked part-time during her recovery. In July 2022, she contracted COVID-19 a second time, derailing her recovery entirely and leaving her unable to return to work.
Cogdell filed a long-term disability claim in November 2022 under MITRE's employee benefits plan, administered by Reliance Standard Life Insurance Company. Reliance denied the claim in January 2023, finding she did not meet the plan's definition of "Totally Disabled." After submitting additional medical records – with Reliance again standing by its denial – Cogdell filed a formal internal appeal in August 2023.
Under the Employee Retirement Income Security Act, or ERISA, plan administrators have 45 days to respond to a disability appeal. An extension of up to 45 more days is available, but only if the administrator identifies a specific, unusual reason for needing more time and notifies the claimant in writing – within that initial 45-day window – of both that reason and the expected decision date.
Reliance met neither requirement. Although its own nurse had reviewed Cogdell's newly submitted documents and consulted another clinician within eight days of the appeal being filed, the file then sat completely idle for 27 days before it was even forwarded to the appeals department. When Reliance finally wrote to Cogdell in late September, it cited the need for an independent physician review – without explaining why that was an exceptional circumstance, and without providing a decision date. The 45-day deadline passed with no decision issued.
Cogdell filed suit on October 3, two days after the deadline lapsed. Reliance upheld its denial 72 days after the appeal was filed – 25 days past the legal deadline. By then, the damage was done.
The court found that by missing the deadline, Reliance had forfeited its right to have its decision treated with deference. Rather than asking whether Reliance had been reasonable, the court examined the claim entirely on its own terms. It found Cogdell was entitled to benefits and upheld an award of $210,769.49 in past-due benefits and $22,544.95 in prejudgment interest, plus post-judgment interest.
Reliance argued that issuing a late decision – rather than no decision at all – should count for something. The Fourth Circuit disagreed. A decision made outside the permitted timeframe, the court said, is not a valid exercise of the discretion the plan gave Reliance in the first place. The insurer also argued that the need to review new medical records and obtain an independent physician opinion justified the delay. The court rejected that too, noting those steps are standard parts of nearly every disability appeal and cannot be treated as exceptional circumstances. The court was particularly pointed on this: ERISA regulations not only anticipate that claimants will submit new records on appeal – they require plan administrators to give claimants that opportunity in the first place.
For HR benefits professionals, the ruling raises a question worth asking now rather than after a lawsuit arrives: do you know whether the administrator running your long-term disability plan is meeting its ERISA deadlines?
Most employers hand off the day-to-day work of claims administration to an insurer or third-party administrator. That is standard practice. But ERISA places the compliance obligation on the plan itself. When a plan administrator misses a federal deadline, it is the plan and its administrator that bear the direct legal consequences – as Reliance Standard found out here. For employers, the governance interest is real: HR benefits teams who select, contract with, and oversee those administrators have every reason to ensure their vendors are meeting the procedural requirements the law demands.
The Cogdell ruling also arrives at a moment when long-COVID continues to generate disability claims across the workforce. Employees dealing with lasting symptoms after COVID-19 infections continue to seek long-term disability benefits, and this case is a sharp example of what happens when the administrative side of that process breaks down.
The takeaway for HR is direct. Review how your plan administrators are tracking and meeting ERISA's appeals deadlines. Check whether your vendor agreements include accountability mechanisms for procedural compliance. And make sure your benefits team understands that when an administrator misses a federal deadline, the consequences land on the plan – and that is a problem that starts with the people who chose and oversee that administrator in the first place.
