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CONCLUSION:

Thank you to everyone (esp. HighTechnology) who gave advice/consul to help my family resolve this situation.  I am truly grateful for this community and their brain trust of knowledge.

Results:

  • We elected the highest option of Supplemental Retiree Life Insurance offered.
  • We agreed to pay the back premiums for 14 months.
  • We received confirmation from the DOL and the company that my father is now covered.

Company Error:

  • In a letter sent to the DOL, but which was forwarded to us by the DOL.  The company claims that after researching our case they found the Benefits Administrator (Third Party Co.) did not mail the original notice to my father to make an election.
  • Which I find ironic because they denied our original appeal based on the fact they claimed to have sent the letter.
  • Spoke with a supervisor at the company HR department for over an hour.  He apologized for the mistake.  I expressed my concerns about the back premiums and he said they don't do hypotheticals but agrees the company would not have paid out the highest election amount if my father would have died.
  • It's a company group life policy and there are no individual policies.  The insurance company doesn't even know the participants names.  I know that might be obvious to some but it's all new to me.
  • The insurance is term life.  Every 5 years the premium adjusts for age.  65-70 is $1/month/ 1k, 70-75 is $2.50/month/$1k.

DOL / Future Consequences:

  • Extremely impressed with their engagement and professionalism.
  • In my last conversation with DOL they told me they have formally requested information from the company pertaining to anyone who else who may have been affected by the Benefits Administrator not sending out age 65 notices.
  • I also saw the return letter which asked the company for other plan participants who were potentially affected.

Takeaways:

  • This was stressful.  For an senior in poor health who was banking on having this coverage for their spouse this was just cruel.  The added stress did not help my father's health situation this last year.
  • With how generous of a retiree benefit this is, I can see a motivation to shrink the roll.  "Accidentally" not send out election notices that automatically switch to "no coverage".  And when the employee appeals: deny, ignore, deny, deny, ignore.  Until threatened with legal consequences from the DOL for not responding.
  • I wonder how many people would have given up.  I know my parents would have given up, if I hadn't engaged in this the company would have made out.   Probably to the tune of six figures, they have been collecting premiums from my father for the last 40 years.
  • Hopefully the DOL investigating further might be a future deterrent for this behavior. 

Again, Thank you to everyone who has helped!

UPDATE 3:

Okay, the company responded yesterday 3 days before the end of the last 3 week extension.

The Good:

  1. The company is allowing my father to make an election for retiree life insurance.
  2. They acknowledged they "might" have not issued a notice to my father to make the election
  3. The retire premium is about $1.00 / month / $1k in coverage, which from research is a very good rate for age of 65+.
  4. No physical required (which we could not pass because of health issues).

The Bad:

  1. They want retro-active premium payments for the last 14 months!

    • There are over 5 coverage options ($15k - $100k) and depending on the coverage selected the retroactive premium is higher.
    • If my father would have died, I can't see how we would have collected because there was no option selected.

  2. We have 14 days to enroll, which because of the retro active question doesn't give us time to research this.

I talked to the company last night and asked about the retroactive premium payments and questioned it.  They said they would have paid out if he would have died... I can't believe this because there was no option selected.  I know they would not have paid out the $100k which is the option we are considering. 

I also contacted the DOL this morning and I'm awaiting a response from them on the retro active premiums.

Questions for the FWF crowd:

  1. Does anyone have any experience with retroactive premiums (esp with regards to life insurance)?
  2. Looking at $1,300 in retro active premium for the ~$100k in coverage, I think it still makes sense to go forward even if we have to pay the past premiums.  Any thoughts?
  3. Is the $1 /month/ $1k in coverage good for a 65+ in poor health?
  4. Any general HR advice how to proceed? 

Thanks Again!!!

UPDATE 2:

Despite the early enthusiastic response from the DOL, they are after all a big government bureaucracy and took their time (had to get supervisor approvals and sign offs).

  • It took DOL 1.5 months to send a letter to the company.
  • The letter demanded a response within 10 days from the company of why benefits were stopped without notice.
  • Company did not respond to the letter.
  • After 2 weeks, DOL followed up with an email to the Plan Administrator
  • Company Plan Administrator wrote back and requested a 3 week extension to respond to the letter.

In conclusion, this update doesn't have much that is meaningful and is more of status update.  Other then the DOL sent a certified letter and the company initially didn't respond with an a email follow-up.

At this point it's one of two things:  

  1. The company plans on stonewalling and believes legally we don't have a case.
  2. They extremely disorganized and don't have a process in place to handle these issues.


OP:

In the spirit of updates today -- here we go.

OP: https://www.fatwallet.com/forums/finance/1477225 

TLDR: Retiree Parent lost a lifetime retiree benefit; subsidized group life insurance, from a DOW 30 company.  Appeal to the company for reinstatement was denied with no explanation other then missing the enrollment deadline.  Company claims that the enrollment form was sent, but was never received.  The benefit had auto-enrolled every year for over 15 years.  Received advice to file a Level 2 appeal by HighTechnology.

UPDATE:

  • February - Filed a Level 2 Appeal, per HighTechnoly's advice.
  • Never received a response back from the Company
  • May - After 60 days, sent a second certified letter with the appeal to the Company
  • Received back a request from the Company for an additional 60 days to consider the Level 2 Appeal
  • August - Still NO response from the Company
  • August - Contacted Department of Labor, ERISA division per HighTechnolgy's advice.
  • September - DOL is sending the company a letter based on the paperwork we sent to the DOL.

Take Aways:

  • Called ERISA and within 5 minutes was on the phone with a competent Federal Employee who was taking notes and building a case.  Sent all letters sent and received along with mail tracking receipts.  I'm pleasantly surprised with the level of engagement from the Federal Government. 
  • Shocked that the Company didn't respond to a Level 2 appeal.  Not sure what gives there.
  • ERISA said based on the evidence we presented they were going to request to the company that our appeal be approved.

Questions:

  • How much pull does ERISA have?  
  • Can they force the company to reinstate the benefit?
  • Is there any recourse if the company denies ERISA's request on our behalf?
  • Anyone have any experience with this HR process?

Thanks again!

 

Member Summary
Most Recent Posts
Thanks for the updates - glad your persistence paid off!

brajalle (Dec. 17, 2016 @ 1:31a) |

Congrats!

xerty (Dec. 17, 2016 @ 3:58a) |

Thanks, I just put together a 2" think pile of papers in a folder for my parents to file.  I think this has been inadver... (more)

pocketTHEdifference (Dec. 18, 2016 @ 10:12a) |

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No answers, but thank you for the update and good luck!  Looks like you may win this one with their inaction.

I've dealt with ERISA laws indirectly and companies are generally terrified of violating ERISA law. They seem to carry a big stick.

I don't have any advice for you, good luck and thanks for the update!

Good for you and thanks for the update. If it wasn't for ERISA we'd all likely be screwed out of a lot of money.

jerosen said:   Good for you and thanks for the update. If it wasn't for ERISA we'd all likely be screwed out of a lot of money.
  Tell that to the United folks who somehow got screwed out of their pensions while the company still had assets.

gatzdon said:   
jerosen said:   Good for you and thanks for the update. If it wasn't for ERISA we'd all likely be screwed out of a lot of money.
  Tell that to the United folks who somehow got screwed out of their pensions while the company still had assets.

  
and the retirees at GE who had insurance and then didn't. 

You can file complaints and they may look into them, but they may well do nothing as well.  As with any guv'ment agency, you are shooting craps as to the outcome.



 

I forgot to add a couple comments from the DOL representative:

  1. "I can't say this isn't common with COMPANY these days, we have seen a lot of cases with denial of medical benefits for life based on missing a letter."
  2. "This is the first time I have heard of Life Insurance benefit being denied based on missed election."

That adds some context to my concerns about the outcome.  Seems this very large multi-national company is actively using the system to screw retirees.  

Hopefully because they didn't respond within the 60 day time frame we will have a case with them.

I am also concerned that Retiree Life Insurance benefits aren't protected under the law the same way pension and health benefits are.

Big picture my t&p disabled father has been without life insurance coverage for 12 months now and we are unable to find coverage based on his health/age that is remotely close to the $100/month premium group coverage for $250k.

pocketTHEdifference said:   I forgot to add a couple comments from the DOL representative:

  1. "I can't say this isn't common with COMPANY these days, we have seen a lot of cases with denial of medical benefits for life based on missing a letter."
  2. "This is the first time I have heard of Life Insurance benefit being denied based on missed election."

That adds some context to my concerns about the outcome.  Seems this very large multi-national company is actively using the system to screw retirees.  

Hopefully because they didn't respond within the 60 day time frame we will have a case with them.

I am also concerned that Retiree Life Insurance benefits aren't protected under the law the same way pension and health benefits are.

Big picture my t&p disabled father has been without life insurance coverage for 12 months now and we are unable to find coverage based on his health/age that is remotely close to the $100/month premium group coverage for $250k.

  

From what I recall, GE retirees found out that neither life or health insurance are covered by the ERISA acts.  In theory, health insurance is, but that is a matter of opinion (from what I recall happening.)  GE cut the benefit to retirees and said it was a "change." 

http://www.ctpost.com/news/article/Changes-to-GE-health-plans-le...


ERISA's stated goal is:  "The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for most voluntarily established pension and health plans in private industry to provide protection for individuals in these plans."  (from DOL web site.)

Nothing is said anywhere that I could find about life insurance.




 

Mickie3 said:   
pocketTHEdifference said:   I forgot to add a couple comments from the DOL representative:

  1. "I can't say this isn't common with COMPANY these days, we have seen a lot of cases with denial of medical benefits for life based on missing a letter."
  2. "This is the first time I have heard of Life Insurance benefit being denied based on missed election."

That adds some context to my concerns about the outcome.  Seems this very large multi-national company is actively using the system to screw retirees.  

Hopefully because they didn't respond within the 60 day time frame we will have a case with them.

I am also concerned that Retiree Life Insurance benefits aren't protected under the law the same way pension and health benefits are.

Big picture my t&p disabled father has been without life insurance coverage for 12 months now and we are unable to find coverage based on his health/age that is remotely close to the $100/month premium group coverage for $250k.

  

From what I recall, GE retirees found out that neither life or health insurance are covered by the ERISA acts.  In theory, health insurance is, but that is a matter of opinion (from what I recall happening.)  GE cut the benefit to retirees and said it was a "change." 

http://www.ctpost.com/news/article/Changes-to-GE-health-plans-le... 


ERISA's stated goal is:  "The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for most voluntarily established pension and health plans in private industry to provide protection for individuals in these plans."  (from DOL web site.)

Nothing is said anywhere that I could find about life insurance.




 

  The life insurance could technically be part of the pension plan.

stanolshefski said:   
Mickie3 said:   
pocketTHEdifference said:   I forgot to add a couple comments from the DOL representative:

  1. "I can't say this isn't common with COMPANY these days, we have seen a lot of cases with denial of medical benefits for life based on missing a letter."
  2. "This is the first time I have heard of Life Insurance benefit being denied based on missed election."

That adds some context to my concerns about the outcome.  Seems this very large multi-national company is actively using the system to screw retirees.  

Hopefully because they didn't respond within the 60 day time frame we will have a case with them.

I am also concerned that Retiree Life Insurance benefits aren't protected under the law the same way pension and health benefits are.

Big picture my t&p disabled father has been without life insurance coverage for 12 months now and we are unable to find coverage based on his health/age that is remotely close to the $100/month premium group coverage for $250k.

  

From what I recall, GE retirees found out that neither life or health insurance are covered by the ERISA acts.  In theory, health insurance is, but that is a matter of opinion (from what I recall happening.)  GE cut the benefit to retirees and said it was a "change." 

http://www.ctpost.com/news/article/Changes-to-GE-health-plans-le... 


ERISA's stated goal is:  "The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for most voluntarily established pension and health plans in private industry to provide protection for individuals in these plans."  (from DOL web site.)

Nothing is said anywhere that I could find about life insurance.




 

  The life insurance could technically be part of the pension plan.

  

and the IRS could be collecting jellybeans, but they aren't. 

Seriously, unless congress authorized them to do so, they cannot go beyond their mission of protecting pensions and health insurance, which the folks at the DOL have done a piss poor job of protecting.

 

Mickie3 said:   ....
and the IRS could be collecting jellybeans, but they aren't. 

....

  
Jelly Belly wishes!!  Everyone knows the IRS only takes iTunes gift cards.

stanolshefski said:   
Mickie3 said:   
pocketTHEdifference said:   ...
I am also concerned that Retiree Life Insurance benefits aren't protected under the law the same way pension and health benefits are.
...

From what I recall, GE retirees found out that neither life or health insurance are covered by the ERISA acts.  In theory, health insurance is, but that is a matter of opinion (from what I recall happening.)  GE cut the benefit to retirees and said it was a "change." 

http://www.ctpost.com/news/article/Changes-to-GE-health-plans-le... 

ERISA's stated goal is:  "The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for most voluntarily established pension and health plans in private industry to provide protection for individuals in these plans."  (from DOL web site.)

Nothing is said anywhere that I could find about life insurance.
 

  The life insurance could technically be part of the pension plan.

In comparison to the GE "change".  That was a company decision to eliminate ("change") a retiree benefit.  The difference here is this company hasn't "changed" the plan for all retirees, just denying a benefit other retirees still currently receive. 

I found a thread from 15 years ago that seems to suggest Supplemental Life Insurance falls under ERISA : http://benefitslink.com/boards/index.php/topic/1490-applicability-of-erisa-to-optional-group-term-life-insurance/

Thoughts??
 

Thoughts??


OP: Wait and see what DOL thinks, their opinion is the only one that counts, the rest is conjecture.

Updated OP:

Despite the early enthusiastic response from the DOL, they are after all a big government bureaucracy and took their time (had to get supervisor approvals and sign offs).

  • It took DOL 1.5 months to send a letter to the company.
  • The letter demanded a response within 10 days from the company of why benefits were stopped without notice.
  • Company did not respond to the letter.
  • After 2 weeks, DOL followed up with an email to the Plan Administrator
  • Company Plan Administrator wrote back and requested a 3 week extension to respond to the letter.


In conclusion, this update doesn't have much that is meaningful and is more of status update.  Other then the DOL sent a certified letter and the company initially didn't respond with an a email follow-up.
At this point it's one of two things:  

  1. The company plans on stonewalling and believes legally we don't have a case.
  2. They extremely disorganized and don't have a process in place to handle these issues.

UPDATE 3:

Okay, the company responded yesterday 3 days before the end of the last 3 week extension.

The Good:

  1. The company is allowing my father to make an election for retiree life insurance.
  2. They acknowledged they "might" have not issued a notice to my father to make the election
  3. The retire premium is about $1.00 / month / $1k in coverage, which from research is a very good rate for age of 65+.
  4. No physical required (which we could not pass because of health issues).

The Bad:

  1. They want retro-active premium payments for the last 14 months!

    • There are over 5 coverage options ($15k - $100k) and depending on the coverage selected the retroactive premium is higher.
    • If my father would have died, I can't see how we would have collected because there was no option selected.

  2. We have 14 days to enroll, which because of the retro active question doesn't give us time to research this.

I talked to the company last night and asked about the retroactive premium payments and questioned it.  They said they would have paid out if he would have died... I can't believe this because there was no option selected.  I know they would not have paid out the $100k which is the option we are considering. 

I also contacted the DOL this morning and I'm awaiting a response from them on the retro active premiums.

Questions for the FWF crowd:

  1. Does anyone have any experience with retroactive premiums (esp with regards to life insurance)?
  2. Looking at $1,300 in retro active premium for the ~$100k in coverage, I think it still makes sense to go forward even if we have to pay the past premiums.  Any thoughts?
  3. Is the $1 /month/ $1k in coverage good for a 65+ in poor health?
  4. Any general HR advice how to proceed? 

Thanks Again!!!
 

Yes, you would need to maintain continuous coverage as part of any plan and that means retroactive premiums. Same thing if you use Cobra or any other "back-dated" insurance.

At $1 per 1k per month, it seems he'd have to live eighty two more years for them to make a profit.

soundtechie said:   At $1 per 1k per month, it seems he'd have to live eighty two more years for them to make a profit.
  Which includes the retroactive premium.

Looks like a good deal.

Congrats on the win OP. I know it stings a little, but as RedWolf said, if they had sent the paperwork correctly a year ago you'd have already paid the $1300 to them. Great job on no giving up. (No snark here, just want to congratulate you for being there for your parent and fighting for what they deserve).

Congrats on getting this resolved -- persistence sometimes pays off...

Most of the time that employee benefit matters are resolved, the desired position is to put both parties (the plan and the participant) in the same position they would have been in had the issue never occured.  So yes, they are, in my opinion, correct in asking for back premiums. Primarily, they need to do this so that the correction would not result in one party or the other gaining a financial benefit. 

Also, all flat-rate premiums (even for term policies) are essentially collecting money and investing it for later premiums.  Most employer provided retiree plans don't raise premiums as people get older (i.e., they have a flat premium for retirees), otherwise that $1/month premium would go up to several-fold over the course of the retiree's lifetime.  That said, the $1/month per $1k of death benefit is a good deal for most 65+ year old people (even those in very good health), and it would be a great deal for someone that is older and/or in poor health (who as you point out will no be insurable).  It would certainly seem that the company is subsidizing the cost of this insurance coverage.

 

I love how you all just flat out accept "retroactive premiums". I call this a "freeroll" for the insurance company. There isn't a chance in hell they would have paid out if he had died during this "retroactive" peroid.

KatoKrazy said:   I love how you all just flat out accept "retroactive premiums". I call this a "freeroll" for the insurance company. There isn't a chance in hell they would have paid out if he had died during this "retroactive" peroid.
  
Since no amount was selected, you are probably correct - they would not have voluntarily paid out anything.

However, OP would have been paying premiums all along if he had selected, so he's only out the hassle and no extra money if they had done it right the first time.  Additionally, this is a heck of a deal as there is no way OPs father would have lived to ~140+ when the premiums = the benefit (ignoring time value of money for simplification).

I'd say it's not worth the fight as the company theoretically could pull the offer or run out the clock if they are willing to deal with the backlash.

civ2k1 said:   
KatoKrazy said:   I love how you all just flat out accept "retroactive premiums". I call this a "freeroll" for the insurance company. There isn't a chance in hell they would have paid out if he had died during this "retroactive" peroid.
  
Since no amount was selected, you are probably correct - they would not have voluntarily paid out anything.

However, OP would have been paying premiums all along if he had selected, so he's only out the hassle and no extra money if they had done it right the first time.  Additionally, this is a heck of a deal as there is no way OPs father would have lived to ~140+ when the premiums = the benefit (ignoring time value of money for simplification).

I'd say it's not worth the fight as the company theoretically could pull the offer or run out the clock if they are willing to deal with the backlash.

  
I agree with what you are saying, and agree that it probably isn't worth the fight. Doesn't make it right though.  

KatoKrazy said:   I love how you all just flat out accept "retroactive premiums". I call this a "freeroll" for the insurance company. There isn't a chance in hell they would have paid out if he had died during this "retroactive" peroid.
  Retro payments makes him an existing customer with continuous coverage.  I bet they'd be happy to waive the retroactive payments if he was willing to go through regular "new customer" screening, which likely requires a physical. Which would be grounds to deny the policy.  Paying $1,400 that he would have been paying anyway seems like a pretty good deal to me.

KatoKrazy said:   I love how you all just flat out accept "retroactive premiums". I call this a "freeroll" for the insurance company. There isn't a chance in hell they would have paid out if he had died during this "retroactive" peroid.
Don't be so negative. I know one specific case where something similar happened and the problem was found after the insured died. There was a bit of back and forth but the claim was paid out. 

Not to be morbid, but the company has said they will reinstate and would pay out backdated claims. How do they know he's still alive? 

Regardless of people's opinions about OP's opinions...Green for coming back and posting updates.

Stubtify said:   
KatoKrazy said:   I love how you all just flat out accept "retroactive premiums". I call this a "freeroll" for the insurance company. There isn't a chance in hell they would have paid out if he had died during this "retroactive" peroid.
Don't be so negative. I know one specific case where something similar happened and the problem was found after the insured died. There was a bit of back and forth but the claim was paid out. 

Not to be morbid, but the company has said they will reinstate and would pay out backdated claims. How do they know he's still alive? 

  They know because he is signing the letters to the company for reinstatement

supersnoop00 said:   
KatoKrazy said:   I love how you all just flat out accept "retroactive premiums". I call this a "freeroll" for the insurance company. There isn't a chance in hell they would have paid out if he had died during this "retroactive" peroid.
  Retro payments makes him an existing customer with continuous coverage.  I bet they'd be happy to waive the retroactive payments if he was willing to go through regular "new customer" screening, which likely requires a physical. Which would be grounds to deny the policy.  Paying $1,400 that he would have been paying anyway seems like a pretty good deal to me.

  There is no "new customer screening" it's a group policy and the only requirement is to be an employee or retiree.

Updated OP with Conclusion.  Thanks everyone.

Thanks for the updates - glad your persistence paid off!

Congrats!

xerty said:   Congrats!
Thanks, I just put together a 2" think pile of papers in a folder for my parents to file.  I think this has been inadvertently stressing me as well, because I feel a great sense of relief this process is over.  Handing off that packet of documentation had a great feeling.

I also setup a durable power of attorney with the company so I can contact them directly to discuss my father's pension, health & life insurance without us having to be physically together.

Also, I'm sending the DOL ERISA rep a Christmas gift, she was great (though I'm not sure she can accept it, I might just send it to her home address anonymously).
 



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