I am the HR manager for a small company, around 50 employees. The company supplies a ,000 term life policy and offers voluntary employee term life. I had an employee who left our company. I sent out his Cobra information, and Information detailing his rights to his 401K plan. All employees receive a booklet, along with their certificate, for each of the coverages they have. Exp. Term life, Voluntary term life, Short term Disability, and Voluntary long term disability. It states in their booklets, they have the right to convert their term life insurance upon termination. They have three months to submit a written request for a conversion package. This employee never requested to convert and unfortuneately pasted away four months later. His wife has hired a lawyer who is requesting information he feels falls under the ERICA act. Doesn’t this act only apply to Health insurance? Is there a law that required me to give further notification of conversion?
The lawyer already had the booklets concerning the term life insurance. He is requesting any correspondence between our company and the insurance company, any letters to this employee concerning this coverage and proof that payment was deducted from his paycheck and sent to the insurance company. I feel he is on a fishing expedition. There is no court order for documents, just his letter stating they are entitled to this information under ERISA.
The lawyer already had the booklets concerning the term life insurance. He is requesting any correspondence between our company and the insurance company, any letters to this employee concerning this coverage and proof that payment was deducted from his paycheck and sent to the insurance company. I feel he is on a fishing expedition. There is no court order for documents, just his letter stating they are entitled to this information under ERISA.
mbrcatz 9:05 pm on March 9, 2010
Interesting question. I’ve never heard of life insurance, or the conversion thereof, falling under ERISA, but maybe it’s the lawyer’s plan to either 1. Make this a test case and take it to court, or 2. scare you into just paying out the $20,000, because taking it to court will likely cost you more. Assuming that you don’t have employee benefits liability coverage on your package policy.
Likely this guy was too sick to pay attention to paperwork. If you have employment benefits liability, and even if you don’t, turn a copy of all the correspondence over to your GL carrier, and let them handle it. I think he’s fishing, too.
I don’t think the lawyer is entitled to all the correspondence, proof of payments, etc, under ERISA. Sorry, it’s time for you to get professional help on this. If you have no GL coverage that will apply, hire a lawyer.
sumbumblebee 9:05 pm on March 9, 2010
I’m not aware of anything about term life in ERISA, which deals with retirement plans, for the most part (if part of a retirement package is a health and welfare benefit, then health care would also fall under the act.) ERISA stands for Employee Retirement Income Security Act.
You say the lawyer is requesting information that falls under the act. The information he’s requesting could be the booklet and any other information you give to your terminated employees. If that’s what he’s talking about, then it is covered under ERISA- just give him the termination package.
If he’s looking for information specific to the life insurance, he probably doesn’t have a right to it, but you’ll know- if he’s got documents giving him the legal right to the information by a judge or by your company, then he has access. If he doesn’t, then you only have to show him what you gave to the gentleman when he was terminated.
ghost 9:05 pm on March 9, 2010
U can revue this here friend
http://allhaveinsurance.blogspot.com
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