“The stories of an employer and a long-term disability insurer and claims fiduciary for an ERISA plan, defendants in two recent cases, ring so true. In the first case the insurer was designated as claims fiduciary for an employer’s long-term disability plan, and ended up in litigation with the least friendly standard of review – de novo review – of the disability benefit determination. This happened because the claims administrator failed to timely respond to the employee’s challenge of the amount of disability benefits awarded. In the second case, the employer had to pay a $750,000 death benefit due to its failure to notify a disabled, and then terminated, employee of his right and the process to convert his group life insurance policy to an individual policy. This failure was coupled with assurances from human resources to the former employee’s spouse that nothing more was required to ensure that all benefits would continue, and was found to be a breach of the employer’s fiduciary duty.”

“Neither case involved difficult ERISA concepts, and neither set new precedent. They drew our attention because both involved seemingly small and avoidable mistakes with costly implications for well-meaning employers or administrators.” [Stinson, Leonard, Street]