In Bicknell v. Lockheed Martin Group Benefits Plan, No. 10-1212 (3rd Cir. 2011) (Non-precedential Opinion), the plaintiff was a participant in the Lockheed Group Benefits Plan, an employer-sponsored plan subject to ERISA (the “Plan”). As a Plan participant, the plaintiff purchased accidental death insurance covering his dependent children. This purchase was made online. The insurer was defendant Prudential Insurance Company of America (“Prudential”). Later, the plaintiff’s son, Michael, died in a car accident at the age of twenty seven. Following Michael’s death, the plaintiff filed a claim for the accidental death benefit from the Plan. Prudential denied the claim because, as a result of his age, Michael was ineligible for coverage under the Plan. The plaintiff then filed this suit under ERISA. The district court granted summary judgment to the defendants, thereby denying the plaintiff’s benefit claim. The plaintiff appealed, and the Third Circuit Court affirmed the district court’s decision.
Two issues stand out. First, the plaintiff alleged that Michael’s coverage under the Plan could not be denied, because certain employees of his employer had advised him that, if the coverage of any dependent could be purchased online-and here it was-then the dependent is eligible for coverage. To this, the Court said that the plain language of the documents for the Plan, including the summary plan description, clearly indicate that coverage of a dependent child for accidental death benefits under the Plan ends prior to age 27. Therefore, Michael was ineligible for this coverage at the time of his death. Under ERISA, the written terms of the plan documents control and cannot be modified or superseded by the employer’s oral statements. The participants in an ERISA plan have a duty to inform themselves of the details provided in their plans.
Second, the plaintiff argued that he is entitled to convert the dependent coverage, provided by the Plan while Michael was eligible for benefits, to an individual policy retroactively. This obtains because Prudential failed to provide him with notice of the conversion privilege as required by the Plan. The plaintiff argued that the following language in the governing Group Life Contract creates a notice requirement:
“The individual contract must be applied for and the first premium paid by the later of: (1) the thirty-first day after you cease to be insured for [an accidental death benefit] with respect to the dependent; and (2) the fifteenth day after you have been given written notice of the conversion privilege. But, in no event may you convert the insurance to an individual contract if you do not apply for the contract and pay the first premium prior to the ninety-second day after you cease to be insured for [an accidental death benefit] with respect to the dependent.”
To this, the Court said that the above language does not affirmatively obligate Prudential to provide separate written notice of the conversion privilege. This language alerted the plaintiff to the fact that he needed to apply to convert coverage to the individual policy within a limited period of time after his dependent child became ineligible for coverage under the Plan. It is the only notice required by ERISA. Again, participants in a plan subject to ERISA have a duty to inform themselves of the details provided in their plans.