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Failure to tell employees LTD plan is terminated


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An employer maintained an (ERISA) insured long term disability plan. As usual the employer had only an insurance contract. There was no separate ERISA plan document.

Employee A was aware of the plan. Employee A terminated employment and was rehired within several months.

However, unbeknownst to employee A or any other employees the employer had, prior to A's separation, decided to cancel the LTD coverage. There was never a formal notice to employees.

Two years after A was rehired he became disabled and attempted to file a claim under the LTD plan. Of course, he was then told the plan was no longer in existence.

What cause of action might A have against the employer?

Estoppel would require a showing of a misrepresentation by the employer, and that may be difficult here. There may be a breach of fiduciary duty, but does that duty survive termination of the plan? And what would be the remedy? Benefits under a nonexistent plan? What would be the employee's best argument?



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