Id. The children’s guardian hired our firm and sued in the Middle District of Tennessee for the employer’s breach of fiduciary duties for misleading our client into believing they had significantly more life insurance than the amount the life insurance company allowed them to be covered for under the plan. Sun Life denied our client’s young children’s claim (as their beneficiaries under the plan) beyond the $150,000 that should have been the coverage for a part-time employee.
Our client received confirmation for their coverage in their employee benefits statements, and the insurance company accepted premiums for the amount of full-time life insurance.Īfter they had been at work less than a year, our client was shot and killed by their estranged spouse, which, under the terms of the policy, would qualify for enhanced benefits as an “accidental” death. However, the benefits website allowed our client to enroll in the full-time life insurance plan.
Our client and their employer knew they were working part-time, they never claimed to work full time, and they never attempted to work full-time. While in the process of going through a divorce, our client returned to work as a pharmacist in a hospital, but because they had two small children, they only went to work part-time. As a part-time employee, they should have had $150,000 of coverage for accidental death, but our client was allowed to sign up for a plan which entitled them to $934,000 of coverage for accidental death. The policy doubled benefits in the case of accidental death. Our client, a part-time employee, was allowed to sign up for full-time life insurance coverage on their company’s benefits’ website, which meant that instead of $75,000 in coverage, they were allowed to enroll in $467,000 in coverage. In this case, the misleading information did not come from a Summary Plan Description (SPD) but from confirmation of the coverage the employee thought they signed up for. However, recent Supreme Court and lower court decisions have clarified that employees can be awarded the benefits they were promised, even if those benefits were not available under the strict terms of the plan, or be awarded money to make up for the employer/plan administrator’s breach of fiduciary duties. There is a long history of complicated case law about what remedies qualify as “an appropriate equitable remedy” and are thus available to successful claimants under ERISA § 502(a)(3).
When an employer, acting as plan administrator, misleads the employee about coverage or rights under the plan, the employee must bring a claim for breach of fiduciary duty under ERISA § 502(a)(3). The remedy in §502(a)(1)(B) claims is the return of benefits promised under the plan or insurance policy. When employers do not give accurate information, the employee does not have a claim for ERISA benefits due “under the terms of a plan,” but, rather has a claim against his or her employer/plan administrator for breach of fiduciary duty.Ĭlaims for benefits due under the terms of a plan are brought under ERISA § 502(a)(1)(B). Likewise, employers sometimes give misleading information about an employee’s rights under an ERISA plan or ERISA insurance policy or fail to give necessary information, which results in the employee not having a proper claim for benefits under the policy.īecause employers are typically the plan administrators and because employers are acting as fiduciaries when they give employees information about their benefits, they have a duty to give employees accurate information. Unlike most ERISA benefits cases in which the claimant is seeking benefits that are due under the terms of their ERISA plan insurance policy, sometimes employees have to fight because their employers don’t actually provide an insurance policy or benefit that was promised. Sun Life Assurance Company of Canadaīefore delving into the facts of this case, it is necessary to cover some legal details to explain how this case is different than most ERISA benefits cases.