Lowe’s Sued over Cancelling Health Plan Participants’ Coverage

February 3, 2012 (PLANSPONSOR.com) – A lawsuit was filed on behalf of all participants in Lowe’s Companies’ Group Medical Plan who had their health coverage terminated and were denied medical benefits by Lowe's for part or all of the 2011 calendar year.

Abbey Spanier Rodd & Abrams, LLP, Sapir & Frumkin LLP and the Law Offices of Patrick F. Lee announced the class action lawsuit that alleges Lowe’s modified its prior practice of automatically re-enrolled employees in their Group Medical Plan, except for seeking any changes requested in coverage. Instead, Lowe’s put in place a system that required every employee to re-enroll via its computer system. Specifically, the complaint alleges that the named plaintiffs had their insurance cancelled by Lowe’s, but were not told about the cancellation until he/she or one of their family members became ill, and then were advised of their uninsured status only by their physicians or medical care provider.   

Lowe’s failed to give notice to any of its employees who lost coverage due to the modification of the re-enrollment procedure or to inform them in any way of the loss of coverage.    

The complaint alleges that as plan fiduciaries, the defendants in the suit are required to exercise skill, care, prudence and diligence in administering all components of the plan, and are responsible for administering the plan solely in the interest of plan participants and beneficiaries.  Plaintiffs allege that in violation of their fiduciary duties to plan participants and beneficiaries, the defendants embarked upon a course of conduct that caused many employees to lose their coverage with the Lowe’s Group Medical Plan.    

The lawsuit seeks relief on behalf of all members of the class in the form of reinstatement of coverage, recognition of the group health plan enrollment elections of class members on file as of December 31, 2010, equitable restitution to make them whole in the form of reimbursement of healthcare expenses incurred by class members that would have been covered but for the defendants’ unlawful termination of benefits, and reimbursement for premiums for medical insurance coverage that would not have been incurred had the proper coverage not been cancelled.