Source: https://www.erisaclaimdefense.com/sixth-circuit-finds-no-fiduciary-duty-give-notice-conversion-portability-rights-termination-employment/
Timestamp: 2019-04-23 14:47:43+00:00

Document:
In Vest v. Resolute FP US, Inc., 905 F.3d 985 (6th Cir. 2018), the Sixth Circuit Court of Appeals upheld dismissal of a claim by the beneficiary of a deceased employee that the employer breached its fiduciary duty under ERISA §502(a)(3), 29 U.S.C. §1132(a)(3) by failing to notify the decedent of his right to port or convert his group life insurance coverage to an individual life insurance policy after he ceased active employment.
Under the governing Plan, employees had the right to port or convert group optional life insurance coverage to individual coverage within 31 days of ending active employment. The decedent did neither, and therefore lost the optional life insurance coverage. After his death, his wife and beneficiary sued the employer, alleging that it did not provide the decedent “with any information concerning his right to port or convert the coverage that ended,” and that such failure constituted a breach of fiduciary duty under ERISA §502(a)(3), 29 U.S.C. §1132(a)(3). The district court held that the employer had no such duty and dismissed the complaint. On appeal, the Sixth Circuit affirmed.
The holding in Vest is in line with other case law concerning fiduciary duties under ERISA in the context of group life insurance conversion in that “[c]ourts adjudicating apposite claims in that context consistently find no fiduciary duty to provide specific information about conversion rights.” Tuhey v. Ill. Tool Works, Inc., No. 17 C 3313, 2017 U.S. Dist. LEXIS 121802, *22 (N.D. Ill. Aug. 2, 2017). See, e.g., Howard v. Gleason Corp., 901 F.2d 1154, 1161 (2d Cir. 1990) (“We agree with plaintiff that employers could, with little burden or expense, include notices in employees’ final paychecks reminding them that in order to continue their life insurance coverage, they must exercise their conversion privileges; [h]owever, ERISA does not mandate such notice”); Prouty v. Hartford Life & Accident Ins. Co., 997 F. Supp. 2d 85, 91 (D. Mass. 2014) (holding that employer did not breach fiduciary duty under ERISA by failing to provide plan participant with post-termination notice of life insurance conversion rights because “there is no requirement under the statute to provide notice of conversion rights for life insurance policies”); see also Maxa v. Alden Life Ins. Co., 972 F.2d 980, 986 (8th Cir. 1992) (“[T]his Court does not construe ERISA or the regulations under it to require that the appellee had a duty individually to warn, upon their sixty-fifth birthdays, each and all of the members of the plans which it insured that their benefits would be reduced according to the plan’s coordination of benefits provision unless they enrolled in Medicare”).

References: v. 
 §502
 §1132
 §502
 §1132
 v. 
 v. 
 v. 
 v.