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Employment Law Alert: Retroactive Enrollment In Long-Term Disability Plan

On January 19, a Utah District Court issued a ruling in an ERISA case brought by an employee denied coverage under his employer’s long-term disability plan, after it was discovered that he had not correctly completed the plan’s enrollment forms within the enrollment period.

The plaintiff, Scott Atwood, began working for Swire Coca-Cola USA (a Coca-Cola bottling plant in Salt Lake City, Utah) on August 28, 2000. That same day, Atwood completed various employment forms, including insurance forms. However, his application for certain benefits -- including long-term disability coverage -- was incorrectly completed. Atwood opted for coverage, but also signed a “waiver of insurance” on the reverse of the enrollment form.
Two years later, Atwood filed a claim for long-term disability benefits, but his claim was denied on the basis that the forms had not been correctly completed within the plan’s enrollment period. After Atwood sued Swire under ERISA, the Court, citing what it described as Swire’s having “breached its duty to competently administer the plan and maintain plan records,” ordered Swire to retroactively enroll Atwood in its disability plan.

Bottom Line

This rather novel and interesting decision reflects at least one court’s opinion that an employer’s duties under ERISA with respect to benefits plans extends to ensuring that employees properly complete their enrollment forms.

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