Jump to content

No Notice of Right to Convert


J Simmons

Recommended Posts

ER pays for group life insurance coverage for EEs. ERISA applies.

EE goes on LTD. No waiver of premium. LTD plan does not call for ER to continue the group life insurance coverage for former EE even if on LTD. Group policy does give terminating EEs a right to convert to and pay for individual life coverage.

Strong evidence that ER's health insurance rep erroneously told EE (and EE's spouse) that there was a waiver of premium on the life insurance for those on LTD. Neither insurance company nor ER can produce any notice or letter to EE or spouse about individual conversion option.

EE dies. ER and insurance company deny coverage.

Spouse is claiming equitable estoppel argument that the EE and spouse detrimentally relied upon the misinformation given by the ER's health insurance rep.

How strong of a factor in the ER's defense of the case do you think it is that the EE and spouse relied on a HEALTH insurance rep of the ER on an issue about LIFE insurance? Was it reasonable for the EE and spouse to have relied on a HEALTH insurance rep about LIFE insurance issues?

John Simmons

johnsimmonslaw@gmail.com

Note to Readers: For you, I'm a stranger posting on a bulletin board. Posts here should not be given the same weight as personalized advice from a professional who knows or can learn all the facts of your situation.

Link to comment
Share on other sites

I just don't see how it can be considered reasonable to rely on the health ins. rep re: substantive provisions contained in the life ins. policy, without a lot more. I think the defense is a strong one.

Now, if the health ins. rep was commenting on provisions in the LTD policy re: paying life ins. premiums while on LTD, then that's another story.

Link to comment
Share on other sites

Larry,

If I understand what you are saying, the EE and spouse might have reasonably relied upon the HEALTH insurance rep of the ER re that the LTD plan pays premiums for continuing life insurance coverage on the disabled EE, but not re a waiver of premium in the life insurance policy for disabled EEs.

Is this because LTD and health benefits are more commonly handled by the same HR reps of an ER than are health and life benefits?

John Simmons

johnsimmonslaw@gmail.com

Note to Readers: For you, I'm a stranger posting on a bulletin board. Posts here should not be given the same weight as personalized advice from a professional who knows or can learn all the facts of your situation.

Link to comment
Share on other sites

Are the health rep & ins. rep that you mention the employer's HR or benefits personnel? If so, I misunderstood your post, because I thought they were the reps of the cos. which sold the policies to the employer and therefore were outside contacts for employees with questions--health/LTD questions to rep X, and life ins. questions to rep Y.

If they were employer personnel from HR or benefits dept., then I think the employer will have a difficult time getting out of this one. Hard to tell what the employee would have done had the proper advice been given, but that's probably not material. Fact is, bad info was given by people relied on to give proper advice, and the result was an opportunity for coverage lost by the employee. This is not like tax advice--i.e., the employer doesn't give it. This is information about benefits provided by the employer, and there is often nowhere else (i.e., no SPDs that cover everything important) that the employee can go to get info about coverage issues.

To me, it wouldn't matter which employer rep gave which info--someone should have known the answer, but the answer that was given was wrong--unless there is a clear line of knowledge that is known to employees, and the proper question was knowingly asked of the improper rep. But, these reps know that employees will rely on the info they give, so the answers need to be right--or they need to find out the right answer to give the employee.

Under normal circumstances, I do not think your proposed defenses would work--although I sure would give it all I got . . .!

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
×
×
  • Create New...