No Standing For ERISA Suit Found for a Plan Nonparticipant

October 31, 2003 ( - An employee who is not enrolled in the company health plan, and thus not a participant, does not have standing to sue for failure of coverage under the Employee Retirement Income Security Act (ERISA).

>The decision by the US 2nd Circuit Court of Appeals rejected the employee’s contention that her failure to enroll was due to the company’s misrepresentation of her eligibility date and that she would have enrolled if the company had provided the claims forms in a timely manner. Rather the court found the employee only expressed an interest in enrolling after becoming ill, according to the unpublished opinion.

>In affirming a lower court’s ruling, the appellate court found the participant’s arguments “without merit” since she never confirmed to the terms of a participant contract by failing to enroll in the plan.   “In other words, she was not a participant in the plan simply by virtue of having been eligible for coverage,” according to the opinion penned by the court.   

>This is contrary to the participant’s claim that she should have been considered a participant since she met the three-pronged requirements outlined in the company’s agreement with the provider, even without signing up for coverage.

Case History

>Maryann Partsinevelos filed suit against her employer, Tropical Machines Inc., alleging the company violated ERISA provisions in its failure to provide her with health insurance.   Specifically, she alleges the company misrepresented the date of her eligibility.   Further she contends the company did not provide her with enrollment forms and terminated her employment after she inquired about eligibility.

>Initially, the suit was dismissed by a judge in the US District Court for the Eastern District of New York after the lower court determined she was not a plan participant, and thus lacked standing to sue under ERISA.

A copy of the unpublished opinion –Partsinevelos v. Tropical Machines Inc.,Second Circuit Court of Appeals, No. 03-7211 – can be found  here .