Statutes of limitation, which prescribe the time that may elapse before one loses the right to file suit, are harsh but often necessary things. They are harsh because, once the time period provided in the statute has passed, a potential plaintiff loses all rights to bring his or her claim. They are necessary because fundamental fairness to putative defendants and the frailty of human memory demand that a claim be brought within a certain number of years or not be brought at all, else uncertainty and the fog of time would make the claim untriable. One may not sleep on one’s rights forever and expect to find the world unchanged upon finally waking up.
ERISA, the law that governs employee-provided health insurance policies (among other things), generally states that an employee who has been denied coverage may ask the federal courts to review that decision within one to three years after the insurance company’s final denial. (The variance is caused by the statute relying on state law to determine the limitation period.) But the law also says that the parties may agree to change the limitation period – both the period of time itself and when that time starts to run. Those changes would be recorded in the insurance agreement. The newly agreed-upon limitation period must be reasonable, but may still end up being significantly shorter than it otherwise should be.
The Supreme Court recently upheld that flexibility. In doing so, it probably came to the right conclusion under the statute. But both the underlying law and their decision left undisturbed a legal fiction – that the shorter limitation period in an insurance policy is the result of an actual agreement between the parties. I for one have never met an employee who was able to negotiate any part of a health insurance policy.