What principles are likely to be applied when a claimant elects to abandon the plans administrative claims process in favor of pursuing his or her benefit claim in court?
Section 503 of ERISA requires plans to set up procedures to provide a full and fair review of denied benefit claims. With limited exceptions, claimants must exhaust those internal procedures before filing a civil action for benefits under section 502(a)(1)(B). This requirement reflects a legal presumption favoring exhaustion of internal procedures. Paragraph (l) of 2560.503-1 provides that where a plan fails to establish or follow claims procedures consistent with the requirements of the regulation, a claimant shall be deemed to have exhausted the administrative remedies available under the plan. The claimant shall be entitled to pursue any available remedies under section 502(a) on the basis that the plan has failed to provide a reasonable claims procedure that would yield a decision on the merits. However, the regulation does not undermine the principle that claimants bear the burden of proving to the satisfaction of the court that the plan failed to establish or follow claims proced
