The court said the employer did not provide the SPD within 90 days after the employee retired and was eligible to convert her group policy to an individual policy, according to EBIA. The employee had allegedly attempted to continue her coverage by submitting a waiver of premium form based on incorrect oral instructions from human resource officers, EBIA said.
The court noted that penalties for plan information disclosure violations under the Employee Retirement Income Security Act (ERISA) apply where a written request for information has been made, but the employee did not make a written request for the SPD. However, invoking its discretion to enforce penalties as it deems proper, the court ordered coverage to be restored and granted $34,000 of policy benefits to the employee’s spouse as beneficiary of the policy.
After the employee’s death, the insurance carrier denied the spouse benefits, saying the employee’s coverage ended at her retirement. The employee’s spouse sued the employer, claiming the employee would have submitted the proper form and coverage would not have ended had the employer provided the SPD in a timely manner.
The case is Haynes v. K-VA-T Food Stores Inc.
« Employee Terminated for Cause will not Receive Severance