This case discusses the fiduciary obligation of plan administrators to inform participants in advance of ERISA’s statutory notice periods regarding the potential impact caused by a change of life insurance carrier under a group life insurance plan. Here, the change in the employer’s group life insurance carrier resulted in termination of coverage for a disabled participant who might have been able to convert the policy to individual coverage within the first 30 days after the change—had he been informed of the change within such period.
Though the court ultimately granted summary judgment in favor of the plan administrator because the participant did not otherwise meet the eligibility requirements for conversion, the court suggested that plan administrators have a fiduciary duty to analyze the impact of material changes and, in some cases, may have a duty to inform participants of material changes more quickly than required by statute.
Originally published in WRNewswire – An AALU Washington Report on August 1, 2014.
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Topics: Benefit Plan Sponsors, Conversion, Employer Group Health Plans, ERISA, Fiduciary Duty, Fiduciary Liability, Life Insurance, Material Disclosures, Notice Requirements, Plan Administrators
Published In: Civil Procedure Updates, General Business Updates, Finance & Banking Updates, Insurance Updates, Labor & Employment Updates
DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.
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