Sued over employee's failure to complete insurance paperwork timely

felicia_matthews · April 2003

I had recently read an article published by EBIA, relating a recent case where a benefits eligible employee sued his employer over their policy for not-enrolling employees automatically in their insured benefits program. He had failed to enroll in benefits b/c he had assumed that enrollment was automatic and then when he went to utilize the company's insurance, he was informed that he was not covered and he would have to wait until their next open enrollment, which was months away and he needed surgery. He sued b/c their plan documents failed to specifically state that a signed enrollment application was necessary for enrollment! Funny enough, I am now possibly facing the same situation. I have an employee who was eligible 5 months ago and never completed the paperwork and is now threatening to sue us for failure to provide her benefits as she is entitled as a FT employee. I cannot find the EBIA article and was hoping someone else had a copy or a link to the article???
I can be reached at: [email]felicia.matthews@hr.com[/email]

LindaS · April 2003

I don't know of the article to which you are speaking but I have had instances with a former company regarding this issue. My practice was to provide the employee with the SPDs, etc. and schedule a time to sign them up. They also received a letter indicating what information they needed to bring with them (dependeng info., etc.). If they don't have it at that time I schedule a second meeting and if they still don't have it they receive a letter reminding them that we cannot process the paperwork without it and if they don't respond, they are not enrolled.

E Wart · May 2003

E Wart
I don't have a copy of the article, but can't believe this would happen if you make sure all employees complete a group insurance (and 125 plan form) and they have to designate on that form yes or no to the group insurance (and 125 election). If they put no, how could they "sue someone" for not having coverage? They said they didn't want it. I would think this would be easy to correct and should support and protect you.

ThomasG · May 2003

Agree with some of the others. At our company all new associates sign a form stating they accept or DO NOT ACCEPT the different benefits offered. No issues then.

lorrie · May 2003

Same here - we require all eligible employees to sign a form either accepting or declining health coverage. Our 'decline' form also outlines when they will be able to pick up coverage at another time, such as a change in circumstance or open enrollment. That way no emloyee thinks they can just come back to me in a few months and enroll.

Nat · May 2003

I don't have a copy of the article either but can tell you what we do that might help you in the future. We require that during orientation or whatever designated time we sit down with the employee, that the employee must leave the meeting having signed either to enroll or to decline the coverage. We do not let them leave the meeting with a signed piece of paper. If they don't know what they want to do, we get them to sign a declination and if they decide within the 60 day benefit waiting period to take the coverage, then they can come to the benefits office and make the change otherwise they stay declined. This works well for us.

Sued over employee's failure to complete insurance paperwork timely

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