Employer descriptions of benefits v. Insurance company descriptions

George · August 2001

If the employer's description of a disability benefit provides that to receive benefits the employee must not do any work for compensation, but the policy description provided by the insurance company to the employee contains provisions that specifically contemplate an employee being able to work at some other position (which results in a decrease in benefits), which description prevails?

Steve Hall · August 2001

I wouldn't even start to guess on this one: A mistake could be [b]very[/b] costly. Have your legal counsel examine both the insurance plan and your company policy and give you an opinion. It seems that I am reading a lot of cases lately where the company's intent and the insurer's practice didn't quite mesh--and the judgments were usually costly.

~Steve in SD~

Down_the_Middle · August 2001

I think the advice for legal counsel is valid. More often than not, I think you'll find that if any ambiguity arises between the employers printed material and the actual insurance contract, the contract prevails.

Scott Ruth · August 2001

Since the benefits are paid by an insurance company, that company will decide when and what benefits it will pay. The problem generally comes when your company's description is more generous to the employee, in which case your company has the risk of getting stuck with the difference between what the insurance company will pay and what your company has promised in its description. I'd start by getting clarification from the insurance company on what they will pay, then get specific advice if you think your company could be on the hook in your particular situation. I'd also make sure that accurate descriptions are distributed to employees.

Employer descriptions of benefits v. Insurance company descriptions

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