BROADCASTS.com

ERISA Plan Must be Enforced as Written 

 When Anthony Hayes' employment ended, so did his employer-provided life insurance. Hayes then missed the deadline to convert his coverage to an individual policy. After Hayes died, his surviving spouse filed suit seeking relief under a provision of the Employee Retirement Income Security Act allowing "a participant or beneficiary" of an employee benefit plan "to recover benefits due" "under the terms of [the] plan."  

In Kathy Hayes v. Prudential Insurance Company Of America, No. 21-2406, United States Court of Appeals, Fourth Circuit (February 23, 2023) Ms. Hayes sought benefits under an employee life insurance policy based on equity - that the decedent was too ill to convert his employee life policy to a personal policy even though he did not comply with the requirement of the ERISA plan.  FACTS  Hayes worked as an environmental engineer for DSM North America, Inc., and had an employer-provided life insurance policy with defendant Prudential Insurance Company. Prudential was both the insurer and the administrator of the employer-provided benefit plan. The plan gave Prudential "the sole discretion to interpret [the plan's] terms . . . and to determine eligibility for benefits."  In 2015, Hayes lost his job because of medical issues and his employer-provided life insurance coverage ended. The terms of the plan, however, allowed former employees to convert employer-provided coverage to an individual policy. To do so, the plan required Hayes to initiate the conversion process "by the later of" 31 days after his employer-provided coverage ended or 15 days after receiving "written notice of the conversion privilege."   Hayes did not contact Prudential about converting his life insurance policy until 26 days after the conversion deadline. Hayes' health continued to deteriorate, and he died in June 2016.  Plaintiff submitted a request for benefits, which Prudential denied. The claim administrator explained Hayes' employer-provided "coverage terminated on 11/16/15," and although Hayes "was eligible to convert his Group Basic Life Insurance," "there is no conversion policy on file."  The district court entered judgment for Prudential.   ANALYSIS  ERISA regulates employee benefit plans by establishing standards of conduct, responsibility, and obligation for fiduciaries of those plans, and by providing for appropriate remedies, sanctions, and ready access to the federal courts. ERISA creates a wide range of public and private enforcement mechanisms.  Plaintiff countered that she is not asserting that the plan terms should be rewritten. Instead, she asks the Court to apply the doctrine of equitable tolling to allow for an exception to the life insurance conversion deadline set forth in the policy because Hayes was incapacitated during the conversion period.