Should I Say Something? A Plan Administrator’s Duty to Provide Individualized Benefits Communications

The employee benefits implications of any termination can seem self-defining; in other words, it is easy to believe that both the employer and the affected employee can determine those implications by reading a governing plan document, especially the summary plan description (SPD) required under the Employee Retirement Income Security Act (ERISA)¹ for a given plan. In the typical termination, human resources representatives are rightly focused on guarding against unlawful discrimination, harassment, or retaliation; assembling required documentation; satisfying various notice requirements; and the like. Beyond providing required COBRA notices, it is easy—and often right—to believe that the contents of various benefit plan SPDs will adequately inform terminated employees of their rights and obligations.

However, a recent unpublished ruling by the U.S. Court of Appeals for the Ninth Circuit, Estate of Foster v. American Marine SVS Group Benefit Plan, illustrates how hidden employee benefits issues can complicate a termination and even cause an otherwise-routine employment separation to generate litigation and corresponding potential liability.² This article describes the Foster decision, sets out relevant background law, and provides input concerning the potential implications of the Foster case (and similar cases) on an employer’s analysis of termination decisions—especially those involving potentially disabled employees.

The Ninth Circuit’s Decision in Foster

Kirk Foster was employed by American Marine Corporation (AM) and enrolled in AM’s life insurance plan. He received an SPD that indicated that life insurance would end on “the last day of the month in which [an employee] ha[s] been laid off or go[es] on a leave of absence approved by [AM].”³ However, the SPD also provided that a “totally disabled” employee could qualify for continued group life insurance benefits without payment of premiums if, among other things, the employee had completed a nine-month “disability elimination period” during which the employee remained totally disabled and premium payments by the employer continued.⁴ The SPD also informed employees of a right to apply to the insurer to convert coverage into an individual policy (conversion coverage), an option that had to be exercised within 31 days after termination of group coverage. If an employee died during the disability elimination period (and while employer premiums were being paid), benefits would be paid to the employee’s beneficiary.

Foster became terminally ill in early 2015. On February 1, 2016, AM laid off Foster for reasons unrelated to his health condition. Despite the termination of his employment, AM helped Foster file a claim for long-term disability benefits and permitted Foster to exhaust accrued vacation and sick-leave days, thereby allowing Foster to stay on AM’s payroll until April 15, 2016. AM instructed the insurer for the life insurance plan to terminate Foster’s coverage as of April 30, 2016, at which time AM stopped paying premiums for him.

Largely as a way to help himself cope with his illness, Foster volunteered to provide training to his replacement at AM and continued to do so on an uncompensated basis until April 26, 2016. A few months later, on June 24, 2016, Foster died. He never applied for conversion coverage.

Foster’s beneficiary filed a claim for life insurance benefits. The insurer denied the claim because AM ceased paying premiums for Foster as of April 30, 2016, and he never applied for conversion coverage. Additionally, the insurer determined that Foster did not qualify for life insurance benefits under the disability exception because AM ceased paying premiums for Foster before the end of the nine-month disability elimination period.

Foster’s beneficiary brought an ERISA action against both AM and the insurer. The district court found that the insurer had no liability because AM ceased paying premiums for Foster. As to AM, the trial court found that the life insurance plan’s SPD adequately informed Foster of the circumstances under which coverage would terminate, along with his conversion privilege. The court therefore granted summary judgment for both AM and the insurer.⁵

On appeal, the Ninth Circuit affirmed summary judgment in favor of the insurer but rejected AM’s position that it had no duty to provide information to Foster beyond that contained in the plan’s SPD. The appellate court held that under the circumstances of Foster’s termination and illness, AM had a fiduciary duty under ERISA to provide Foster with specific information concerning his termination date and the deadline for applying for conversion coverage. “Given [AM]’s awareness of [Foster’s] circumstances, the company should have realized that [Foster] would be interested in maintaining his life insurance coverage and would need information about precisely when he would need to act to do so.”⁶ According to the court, in a situation like Foster’s, an employer-fiduciary “has an obligation to convey complete and accurate information material to the beneficiary’s circumstance, even when a beneficiary has not specifically asked for the information.”⁷ Because the court found a potential factual dispute concerning whether and how AM had informed Foster of this information, it remanded the case to the district court.⁸

The potential implications of the Foster decision for employers, particularly those with operations in the Ninth Circuit footprint, are discussed below. It is helpful, however, to consider the framework of existing law concerning an employer’s potential fiduciary duties when communicating about employee benefits.

ERISA and Fiduciary Communications

Mandatory ERISA disclosures. Benefit plans sponsored by private employers are, in general, regulated by ERISA. This federal statute establishes employee benefit plan regulation as “exclusively a federal concern.”⁹ To accomplish this, ERISA preempts any state law, decision, or rule that “relates to” employee benefit plans¹⁰—that is, any state law that “has a connection with or reference to such a plan.”¹¹ ERISA further provides a civil enforcement scheme that is “interlocking, interrelated and interdependent”¹² within ERISA generally and is “intended to be exclusive.”¹³

Among other things, ERISA sets out detailed requirements for the communication of benefit plan contents to plan participants.¹⁴ These requirements include the publication of SPDs for all benefit plans, which are to communicate in plain terms the rights and obligations of participants under a plan,¹⁵ including “the plan’s requirements respecting eligibility for participant and benefits; . . . circumstances which may result in disqualification, ineligibility, or denial or loss of benefits; . . . [and] the procedures to be followed in presenting claims for benefits under the plan.”¹⁶

Additionally, ERISA requires disclosure of various kinds of information relevant to the administration of, and participant rights under, pension benefit plans.¹⁷ Some of ERISA’s disclosure requirements (beyond those applicable to SPDs and annual reports) apply to welfare plans.¹⁸ The most significant welfare plan disclosure requirement is the COBRA notice of continuation rights, which a plan administrator is required to provide with respect to health plan continuation rights upon the occurrence of a “qualifying event” (such as death, termination of employment, etc.).¹⁹ But ERISA contains no disclosure requirement (beyond the content of the SPD) concerning continuation rights with respect to other welfare benefits, such as life insurance.

Most of ERISA’s disclosure requirements, including those applicable to SPDs, are directed toward plan “administrators,”²⁰ a role required and defined by ERISA.²¹ Potential fiduciary implications of this role are discussed below.

Fiduciary duties under ERISA. Analogizing employee benefit plans to common-law trusts, ERISA also establishes that the roles of various employee benefit plan actors are fiduciary in nature.²² Determining fiduciary status under ERISA is a more complex subject than can be comprehensively covered in this article. But, in general, such status can arise in one of two ways: (1) a person²³ is named as a fiduciary in governing plan documents;²⁴ or (2) a person assumes functional fiduciary status by virtue of exercising discretionary authority or control over plan assets, management, or administration.²⁵

ERISA articulates a number of express fiduciary duties, several of which are potentially applicable to employer communications concerning employee benefits. Among other things, ERISA requires fiduciaries to “discharge [their] duties with respect to a plan solely in the interest of the participants and beneficiaries and . . . for the exclusive purpose of . . . providing benefits to participants and their beneficiaries [and] defraying reasonable expenses of administering the plan.”²⁶ Fiduciaries also must discharge their duties “with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent [person] acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims.”²⁷ When carrying out fiduciary functions, a fiduciary must act “in accordance with the documents and instruments governing the plan.”²⁸

ERISA’s enumerated fiduciary duties are not exclusive. In enacting the statute, Congress expected the courts to develop a “federal common law of rights and obligations under ERISA-regulated plans,” including fiduciary conduct.²⁹ The common law of trusts, to the extent that it is incorporated into “federal common law,” can “inform” the application of ERISA’s fiduciary duties.³⁰

Employers acting in a fiduciary capacity. ERISA’s fiduciary standards do not apply to every action or omission of a fiduciary. For these standards to apply, the fiduciary must be acting in a fiduciary capacity. ERISA allows an employer to both sponsor a benefit plan and serve as a fiduciary with respect to that plan.³¹ Employers often designate themselves as the plan administrator for the employer’s own benefit plans. A plan administrator is generally considered to be a named fiduciary.³² “But, obviously, not all of [an employer’s] business activities involve[] plan management or administration.”³³ ERISA imposes fiduciary standards on a person, including an employer, only “to the extent” that person is engaged in fiduciary activity.³⁴ Thus, an employer can wear two hats, acting in “dual roles as plan sponsor [nonfiduciary] and plan administrator [fiduciary]; [but] an employer’s fiduciary duties under ERISA are implicated only when it acts in the latter capacity.”³⁵ “ERISA does require, however, that the fiduciary with two hats wear only one at a time, and wear the fiduciary hat when making fiduciary decisions.”³⁶

Consequently, a threshold question in every case involving a dual-role employer is this: Which hat was the employer–plan administrator wearing when engaging in the complained-of conduct? Even when dealing with an employee benefit plan, not all of an employer’s actions are fiduciary in nature. Some activities, such as routine transmission of notices and forms concerning the plan, may be nothing more than administrative or “ministerial” in nature and therefore not fiduciary.³⁷ But when an employer conveys “information about the likely future of plan benefits” or offers beneficiaries “detailed plan information in order to help them decide whether to remain with the plan,” the communication is likely fiduciary in nature.³⁸ At least one court has suggested that an employer–plan administrator speaks in a fiduciary capacity when furnishing information to participants to help them make benefit plan decisions.³⁹

Employers’ fiduciary duties when communicating about benefits. What are an employer’s fiduciary duties when communicating in a fiduciary capacity with employee participants about benefit plan matters? Few bright-line principles have emerged from the case law because so many decisions turn on very specific facts. One near-certain rule is that if an employer is speaking in a fiduciary capacity, intentional misrepresentations concerning benefit plan matters constitute a breach of fiduciary duties.⁴⁰ As one appellate court succinctly put it, “[l]ying is inconsistent with the duty of loyalty.”⁴¹ Beyond that, however, application of fiduciary principles becomes highly fact dependent.

Depending heavily on case-specific circumstances, when an employer-fiduciary knows that a participant is making potentially self-harming benefits decisions based upon erroneous information (particularly where the employer provided the erroneous information) or a dearth of information (in other words, where the employer’s silence might be harmful), fiduciary principles may require the employer-fiduciary to provide correct and complete information even where the participant has not asked for it.⁴² Another very fact-specific guideline is that when responding to participant questions regarding benefits, the employer-fiduciary may have a duty to make the response complete and accurate.⁴³

Beyond these concepts, what fiduciary duty does an employer–plan administrator have in connection with communications regarding employee benefit plans? And, most importantly, when does an employer–plan administrator have an affirmative duty to provide information not otherwise required by the express terms of ERISA?

There are a number of “guardrails” on an employer–plan administrator’s communication obligations. Most courts have held that, in general, because ERISA already requires various detailed plan disclosures, an employer–plan administrator’s obligations are limited to those express requirements (such as providing an SPD).⁴⁴ Courts have often noted that the fiduciary duty borne by a plan administrator is not personal and individualized; rather, the duty is “for the limited purpose of overseeing whatever plan it creates for what may be thousands of employees and other beneficiaries.”⁴⁵ Individualized communications, specific to various employees’ personal circumstances, are therefore not normally required.⁴⁶ As a number of courts have recognized, the burden of anticipating and providing guidance concerning individual circumstances, both existing and hypothetical, would present a “practically impossible burden.”⁴⁷ In particular, the requirement to individualize communications with respect to life insurance conversion rights has been rejected by a significant majority of courts.⁴⁸

Contrary to this majority, however, there have been a handful of federal district court decisions that presage the Foster line of thought. For example, in Hauth v. Prudential Insurance Co. of America, there was a dispute about whether a plan participant received notice of his conversion rights.⁴⁹ Notwithstanding this dispute, the court found that the plan fiduciary had failed to give the participant notice of his conversion rights because the plan participant was terminally ill and there was “no logical reason” a person in the plan participant’s circumstance would not seek to convert his group life insurance policy to an individual policy if given adequate notice of his right to do so.⁵⁰ Similarly, the court in Perras v. Coca-Cola Co. of North America looked at the “special circumstances” surrounding a terminated employee and found that those specific circumstances created an affirmative duty on the employer to disclose information about the life insurance conversion.⁵¹ In Harris v. Life Insurance Co. of North America, a U.S. District Court for the Northern District of California decision, the court also placed a fiduciary duty to disclose upon an employer based upon circumstances establishing that the employer knew that the plan participant was severely ill.⁵²

Insurers’ communication requirements. Under many ERISA welfare plans, benefits are provided only through a group insurance policy. This is especially true for plans involving life, accidental death, and dismemberment, and long-term disability insurance plans. Many health plans—particularly those sponsored by small employers—are also provided solely through insurance.

Even for fully insured plans, the employer usually retains the statutorily defined role of plan administrator. The insurer makes claims decisions (a role that usually involves fiduciary responsibilities) but most often is limited to no more than that.

The courts recognize the distinction between the statutory role of plan administrator—which carries with it statutory responsibilities for formal employee communications—and the role of claims administrator.⁵³ Thus, an insurer that performs the limited function of claims administration does not thereby assume fiduciary responsibility for employee communications.⁵⁴

Notably, some state insurance statutes impose various forms of notice requirements or other conditions with regard to the conversion rights of insureds under group policies. Many of these statutes do not affirmatively mandate a notice; instead, they provide that if an individual insured has not received such a notice, the deadline for exercise of conversion rights may be extended for a short period.⁵⁵ A few, however, do affirmatively require such notice.⁵⁶ In most states, notice may be provided by either the insurer or group policyholder (e.g., the employer).⁵⁷ These state statutes may be preempted by ERISA as applied to employee benefit plans.⁵⁸

Employer liabilities arising from plan communications. ERISA’s civil remedies include a detailed provision expressly creating a number of liabilities for fiduciaries.⁵⁹ This remedial provision is focused (albeit not exclusively) on damages resulting from a fiduciary’s misuse of plan assets.⁶⁰ In any event, ERISA’s express remedial provisions dealing with breach of fiduciary duty can be asserted only on behalf of the plan itself; claims for individual losses are not permitted.⁶¹

An individual claim for breach of fiduciary duty can proceed only under ERISA’s “catchall” remedial provision, which permits the court to award only “other equitable relief.”⁶² The U.S. Supreme Court has held that, as applied to this provision, “equitable relief” includes only such relief as was traditionally available in equity (before the merger of law and equity courts), not including monetary damages.⁶³ Subsequently, the Supreme Court suggested that “equitable relief” could potentially include the historically equitable remedy of “surcharge,” which might include some form of compensation for a loss occasioned by a breach of fiduciary duty.⁶⁴ Although the Supreme Court has even more recently characterized its previous discussion of surcharge as dicta,⁶⁵ some lower courts have used a surcharge-type remedy to award damages against an employer that failed to provide specific communications to a terminating employee concerning life insurance conversion rights, where the employer was found to have had a fiduciary duty to do so.⁶⁶ For example, in one case, a court ordered an employer to pay “lost” life insurance benefits in the amount of $750,000 under a surcharge theory.⁶⁷

ERISA provides that plan administrators may be liable for statutory penalties for failure to provide certain disclosures.⁶⁸ While such penalties may be applicable to an administrator’s failure to provide a COBRA health plan continuation notice (and the failure to respond to written requests for governing plan documentation), there are no ERISA penalties directly applicable to a supposed failure to provide individualized information regarding a terminating employee’s life insurance continuation rights.⁶⁹

Implications for Employer–Plan Administrators

It is difficult to fully reconcile the Ninth Circuit’s decision in Foster with the majority of previously decided cases dealing with a supposed fiduciary duty to provide individualized employee benefits communications. The majority of pre-Foster cases suggest, at least with regard to an employee’s life insurance conversion rights, that it is enough for the employer–plan administrator to generally describe those rights in an SPD. It would then be the employee’s obligation to read the SPD and ask any specific questions necessary to determine how those rights might apply to the employee’s individual circumstances. The departure of the Foster court (and a handful of other district courts) from this approach suggests that employers, particularly those with operations within the Ninth Circuit footprint, may want to consider whether and when to provide more individualized communications to terminating employees concerning a life insurance conversion privilege.

Typically, an employer–plan administrator has no reason to believe that a separating employee has any particularly compelling reason for wanting to exercise life insurance conversion rights. Most employees will go on to work in other jobs where life insurance is available. And, of course, it is rare that an employer knows, or would want to inquire about, factors that might affect a given employee’s interest in converting group life insurance coverage to an individual policy. These typically unknown and unknowable factors include the confidential specifics of the employee’s medical condition; the employee’s assets and net worth; the existence of other life insurance covering the employee; the employee’s retirement plans and other financial plans; the number (if any) and financial circumstances of the employee’s heirs and dependents; whether continuation coverage premiums are, on balance, worth the expenditure in light of the employee’s circumstances; etc. Without undertaking an analysis worthy of a sophisticated financial planner, an employer is simply not in a position to know whether a given employee should consider the conversion of life insurance coverage to be an important option.

However, given the Foster decision and a handful of cases like it, where employment ends for an employee who is or may be totally disabled (and presumably won’t work again, at least for the time being), the employer, in its capacity as plan administrator, might consider whether to provide individualized information. Such information need not necessarily “interpret” the employee’s conversion rights but instead would focus on specific facts that the employee might need to glean to apply the necessary details found in the SPD. In Foster, such information would have included, at the least, the effective date of the employee’s separation (supposedly an unclear date in the Foster case because of some unusual facts) and the date that group life coverage for the employee has ceased (which typically triggers the deadline for applying for conversion coverage).

The same precautions might apply where a separating employee has a serious, even terminal, health condition. Again, in such a situation, the employer–plan administrator might be found to have been on notice of the employee’s heightened interest in, or need for, life insurance conversion.

This is not to say that these steps are mandated by the Foster decision and similar cases; they are not. The Foster decision is unpublished and (at least officially) nonprecedential. Further, the Foster decision (just as with the handful of district court decisions similar to it) appears to be limited to its facts. But viewed another way—in terms of a litigation prevention strategy—an employer–plan administrator might consider taking the precautionary steps discussed above at the point where employment ends for an employee who is disabled, potentially disabled, or otherwise known by the employer to be seriously ill. Preventing litigation is, for most employers, even better than winning it.

Notes

1. 29 U.S.C. §§ 1001 et seq.

2. No. 20-35023, 2021 WL 930257 (9th Cir. Mar. 11, 2021).

3. Id.

4. Id.

5. Est. of Foster v. Am. Marine SVS Grp. Benefit Plan, No. CV 17-165-M-DLC, 2019 WL 7020192 (D. Mont. Dec. 20, 2019).

6. Foster, 2021 WL 930257, at *4.

7. Id. at *3 (citing and quoting Farr v. U.S. W. Commc’ns, Inc., 151 F.3d 908, 914 (9th Cir. 1998); Barker v. Am. Mobil Power Corp., 64 F.3d 1397, 1403 (9th Cir. 1995)).

8. Id. In fact, AM had presented evidence to the trial court that it had mailed detailed information to Foster concerning his conversion rights, even enclosing a partially completed application for his use. The Ninth Circuit held that this evidence created a rebuttable presumption that Foster had received it and left it to the district court to resolve the question. Id. at *3 n.3.

9. Alessi v. Raybestos-Manhattan, Inc., 451 U.S. 504, 523 (1981).

10. 29 U.S.C. § 1144(a). However, state laws that “regulate insurance” are saved from preemption. Id. § 1144(b)(2). The application and significance of this “saving clause” with respect to state laws that address notification of employees’ group insurance conversion rights are addressed below. See infra note 58.

11. Shaw v. Delta Air Lines, Inc., 463 U.S. 85, 97 (1983).

12. Mass. Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 146 (1985).

13. Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 54 (1987).

14. See generally 29 U.S.C. §§ 1021–1025, 1166.

15. Id. § 1022(a).

16. Id. § 1022(b).

17. Such disclosures include, for example, various notices with respect to pension plan funding and assets (29 U.S.C. § 1021(d)–(f), (h), (j), (m)); periodic account statements (29 U.S.C. § 1025); notices concerning multiemployer pension plans (29 U.S.C. § 1021(k)); and “blackout” period notices with respect to the exercise of investment options under 401(k)-type plans (29 U.S.C. §§ 1021(i)).

18. 29 U.S.C. § 1023 (requiring disclosure of annual reports (also required for pension plans)); see also, e.g., 29 U.S.C. §§ 1021(g), 1024(d) (disclosure and reporting requirements applicable to multiemployer welfare (as opposed to pension) arrangements).

19. 29 U.S.C. § 1166.

20. Id. § 1021(a).

21. Id. § 1002(16).

22. Id. §§ 1102(a), 1002(21)(A).

23. “Person,” as defined by ERISA, includes business entities. Id. § 1002(9).

24. Id. § 1102(a).

25. Id. § 1002(21)(A).

26. Id. § 1104(a)(1)(A).

27. Id. § 1104(a)(1)(B).

28. Id. § 1104(a)(1)(D).

29. Firestone Tire & Rubber Co. v. Bruch, 489 U.S. 101, 110–11 (1989).

30. Varity Corp. v. Howe, 516 U.S. 489, 497 (1996).

31. Id. at 498; see also 29 U.S.C. § 1002(16).

32. E.g., Dawson-Murdock v. Nat’l Counseling Grp., Inc., 931 F.3d 269, 277 (4th Cir. 2019).

33. Varity Corp., 516 U.S. at 498.

34. 29 U.S.C. § 1002(21)(A); Pegram v. Herdrich, 530 U.S. 211, 225–26 (2000).

35. Beck v. PACE Int’l Union, 551 U.S. 96, 101–02 (2007).

36. Pegram, 530 U.S. at 225.

37. E.g., Chaganti v. Ceridian Benefits Servs., Inc., 208 F. App’x 541 (9th Cir. 2006) (sending COBRA continuation notices was not a fiduciary act); Milofsky v. Am. Airlines, Inc., 404 F.3d 338 (5th Cir. 2005) (transmission of forms and notices was not fiduciary); Hatteberg v. Red Adair Co., Inc. Employees’ Profit Sharing Plan, 79 F. App’x 709 (5th Cir. 2003) (sending letters and other routine benefits communications was not a fiduciary act); Monper v. Boeing Co., 104 F. Supp. 3d 1170, 1178 (W.D. Wash. 2015) (recruiters and human resources representatives, in providing general benefits information, did not act in fiduciary capacity); Cerasoli v. Xomed, Inc., 47 F. Supp. 2d 401 (W.D.N.Y. 1999) (providing routine benefits information to new employees was not a fiduciary act). In fact, even the preparation of required employee communications material may be ministerial, not fiduciary, in nature. E.g., Xiaohong Xie v. JPMorgan Chase Short-Term Disability Plan, No. 15-cv-04546 (LGS) (KHP), 2017 WL 2462675, at *5–6 (S.D.N.Y. June 7, 2017). The U.S. Department of Labor has provided advisory guidance concerning activities that are, and are not, to be considered fiduciary in nature. See 29 C.F.R. § 2509.75-8.

38. Varity Corp., 516 U.S. at 502.

39. Mathews v. Chevron Corp., 362 F.3d 1172, 1178–79 (9th Cir. 2004); see also In re Unisys Corp. Retiree Med. Benefits ERISA Litig., 579 F.3d 220, 230 (3d Cir. 2009) (“[A]n employer ‘acts as a fiduciary when explaining plan benefits . . . to its employees.’”).

40. Varity Corp., 516 U.S. at 506; see also McGrath v. Lockheed Martin Corp., 48 F. App’x 543 (6th Cir. 2002) (employer provided false and misleading information regarding retirement benefits).

41. Peoria Union Stock Yards Co. v. Penn Mut. Life Ins. Co., 698 F.2d 320, 326 (7th Cir. 1983).

42. E.g., Griggs v. E.I. DuPont de Nemours & Co., 237 F.3d 371, 380 (4th Cir. 2001).

43. E.g., Bixler v. Cent. Pa. Teamsters Health & Welfare Fund, 12 F.3d 1292, 1300 (3d Cir. 1993) (“[O]nce an ERISA beneficiary has requested information from an ERISA fiduciary who is aware of the beneficiary’s status and situation, the fiduciary has an obligation to convey complete and accurate information material to the beneficiary’s circumstance . . . even if that information comprises elements about which the beneficiary has not specifically inquired.”); Eddy v. Colonial Life Ins. Co. of Am., 919 F.2d 747, 751 (D.C. Cir. 1990) (holding that once a beneficiary makes his predicament known, the fiduciary “is under a duty to communicate . . . all material facts in connection with the transaction which the trustee knows or should know” regarding that specific participant’s status and options); Echague v. Metro. Life Ins. Co., 43 F. Supp. 3d 994, 1017–19 (N.D. Cal. 2014) (holding that an employer breached its fiduciary duty to provide “complete and accurate” information in response to a beneficiary’s request for information where the response consisted of “form letters” that did not answer questions).

44. E.g., Vest v. Resolute FP US Inc., 905 F.3d 985, 987 (6th Cir. 2018) (“A fiduciary may not be liable ‘for a failure to disclose information that it is not required to . . . disclose,’ for ‘[i]t would be strange indeed if ERISA’s fiduciary standards could be used to imply a duty to disclose information that ERISA’s detailed disclosure provisions do not require to be disclosed.’”); Walker v. Fed. Express Corp., 492 F. App’x 559, 566 (6th Cir. 2012) (“ERISA does not contain any provision that requires a plan administrator to provide notice to plan participants other than a summary plan description and information of the benefits plan as discussed under 29 U.S.C. §§ 1021(a)(1) and 1022.”); Braden v. Wal-Mart Stores, Inc., 588 F.3d 585, 598 (8th Cir. 2009) (noting that courts “are not quick to infer specific duties of disclosure under § 1104 because of the extent of the statutory and regulatory scheme”); Watson v. Deaconess Waltham Hosp., 298 F.3d 102, 105 (1st Cir. 2002) (“When ERISA itself has specified a duty and a corresponding remedy, we will impose a further duty on fiduciaries only in very narrow circumstances.”); Stahl v. Tony’s Bldg. Materials, Inc., 875 F.2d 1404, 1408 (9th Cir. 1989); Bernstein v. Metro. Life Ins. Co., 453 F. Supp. 2d 554, 559 (D. Conn. 2006).

45. Bernstein, 453 F. Supp. 2d at 559; see also Barrs v. Lockheed Martin Corp., 287 F.3d 202, 207 (1st Cir. 2002); 29 U.S.C. § 1102(21)(A)(iii).

46. E.g., Watson, 298 F.3d at 112 (“Absent a promise or misrepresentation, the courts have almost uniformly rejected claims by plan participants or beneficiaries that an ERISA administrator has to volunteer individualized information taking account of their peculiar circumstances.”); Banks v. Prudential Ins. Co. of Am., 100 F. Supp. 3d 697, 708 (E.D. Ark. 2015) (finding no duty to provide “specialized notification” of “the specific impact of a plan’s terms on [participants] based on their personal circumstances”).

47. Maxa v. John Alden Life Ins. Co., 972 F.2d 980, 986 (8th Cir. 1992); see also, e.g., Walker, 492 F. App’x at 566; Tuhey v. Ill. Tool Works, Inc., No. 17C3313, 2017 WL 3278941, at *6 (N.D. Ill. Aug. 2, 2017) (“Because Tuhey’s right to convert arose from his idiosyncratic circumstances—namely, termination coupled with ongoing health issues that could qualify him for long-term disability—the danger of overburdening the fiduciary recognized by the Seventh Circuit precludes recovery for the alleged lack of disclosure here.”); Boyd v. Conagra Foods, Inc., No. 4:14-CV-1435-JAR, 2016 WL 759326, at *10–11 (E.D. Mo. Feb. 26, 2016) (“Fiduciaries are not required to anticipate every possible application of a plan to the plan participant.”); Saylor v. Ret. Comm., No. 4:05-CV-138-JLH, 2007 WL 2156409, at *9 (E.D. Ark. July 25, 2007) (“A plan administrator does not have a duty to individually notify participants of the impact of general terms of the plan upon them [because] a fiduciary cannot be expected to anticipate the individualized concerns of employees.”); Bernstein, 453 F. Supp. 2d at 560 (“[Applying such a fiduciary duty under ERISA] would require keeping, and constantly updating, records of every employee, every employee’s dependents and every dependent’s potential life insurance beneficiaries. The burden, and expense, would be enormous. The fiduciary duty under ERISA is not that broad.”).

48. E.g., Beazley v. Metro. Life Ins. Co., 413 F. Supp. 3d 535, 541 n.5 (W.D. La. 2019); Chelf v. Prudential Ins. Co. of Am., No. 3:17-CV-00736-GNS, 2018 WL 4219424, at *6 (W.D. Ky. Sept. 5, 2018); Tuhey, 2017 WL 3278941, at *7; Est. of Moceri v. Ratner Cos., LC, No. 2:14-cv-579-FtM-29CM, 2015 WL 1538109, at *2 (M.D. Fla. Apr. 7, 2015); Prouty v. Hartford Life & Accident Ins. Co., 997 F. Supp. 2d 85, 86–87 (D. Mass. 2014).

49. No. C08-3025-MWB, 2010 WL 3168279 (N.D. Iowa Aug. 10, 2010).

50. Id. at *8.

51. No. 1:19-cv-01831-MHC, 2020 WL 5551028 (N.D. Ga. Jan. 24, 2020) (finding that where an employer knew that the employee had a disability and had erroneously continued benefits, the employer should have known that the participant’s conversion rights would be impacted by its error).

52. 419 F. Supp. 3d 1169 (N.D. Cal. 2019) (finding that where the employer knew that the participant was severely ill, this awareness triggered the employer’s fiduciary duty to inform because it was on notice that the participant would be interested in continued life insurance).

53. E.g., Plumb v. Fluid Pump Serv., Inc., 124 F.3d 849, 854–55 (7th Cir. 1997).

54. See id. at 854–55; see also Est. of Foster v. Am. Marine SVS Grp. Benefit Plan, No. 20-35023, 2021 WL 930257, at *4 (9th Cir. Mar. 11, 2021) (“Unlike [AM, the insurer’s] fiduciary responsibilities were limited to claim administration and policy interpretation.”); Can. Life Assurance Co. v. Est. of Lebowitz, 185 F.3d 231, 237–38 (4th Cir. 1999) (holding that the insurer was not responsible for plan communications from a fiduciary standpoint, but plan provision ostensibly required it to provide notice of conversion rights); Justice v. Reliance Standard Life Ins. Co., No. 2:15-CV-00134-JRG, 2017 WL 1369470 (E.D. Tenn. Jan. 27, 2017) (holding that the plan administrator is responsible for communicating plan terms to participants; failure to do so cannot be imposed on the insurer); Prouty v. Hartford Life & Accident Ins. Co., 997 F. Supp. 2d 85, 90 (D. Mass. 2014) (“The unambiguous language of the statute places the responsibility for provision of SPDs on plan administrators and not insurers.”); Gilbert v. LaSalle Bank Corp., No. 06-CIV-4799 (LAK)(JCF), 2007 WL 1290598, at *5 (S.D.N.Y. May 2, 2007) (“[A]lthough [the insurer] might well be considered a fiduciary with regard to other aspects of the plan, the duty to provide notice of the benefit of conversion was the duty of the employer, not the insurer.”), aff’d, 402 F. App’x 538 (2d Cir. 2010).

55. E.g., Ariz. Rev. Stat. Ann. § 20-1269; Cal. Ins. Code § 10209(b); Ga. Code Ann. § 33-27-5(a); Haw. Rev. Stat. § 431:10D-214; 215 Ill. Comp. Stat. 5/231.1(H)(4); Kan. Stat. Ann. § 40-435. These statutes are based upon the National Association of Insurance Commissioners’ Group Life Insurance Definition and Group Life Insurance Standard Provisions Model Act (https://content.naic.org/sites/default/files/inline-files/MDL-565.pdf). However, not all states have adopted this model act verbatim. Further, a number of states have adopted the provisions of the model act in many respects without including the conversion rights notice and extension provisions.

56. E.g., Mass. Gen. Laws ch. 175, § 134A; N.Y. Ins. Law § 4216(d).

57. E.g., Ariz. Rev. Stat. Ann. § 20-1269; Cal. Ins. Code § 10209(b); Ga. Code Ann. § 33-27-5(b); Haw. Rev. Stat. § 431:10D-214; Mass. Gen. Laws ch. 175, § 134A; N.Y. Ins. Law § 4216(d).

58. In Kentucky Ass’n of Health Plans, Inc. v. Miller, the U.S. Supreme Court held that, to be saved from preemption, a state law that purports to regulate insurance must meet two requirements: (1) it must be specifically directed toward entities engaged in insurance, and (2) it must substantially affect the risk-pooling arrangement between the insurer and the insured. 538 U.S. 329, 342 (2003). A number of courts have held that a state conversion rights notice statute did not meet this test and therefore was not saved from preemption. E.g., Howard v. Gleason Corp., 901 F.2d 1154, 1157 (2d Cir. 1990) (applying a pre-Miller version of the saving clause test and holding that the state conversion rights notice statute was “not directed toward the insurance industry at all, much less ‘specifically’”); Haymaker v. Reliance Standard Life Ins. Co., No. 15-06306, 2016 WL 3258439, at *3–4 (E.D. Pa. June 14, 2016) (statute did not substantially affect risk-pooling arrangement); Terry v. Northrop Grumman Health Plan, 989 F. Supp. 2d 401, 409 (M.D. Pa. 2013) (statute was not saved from preemption where notice could be provided either by insurer or employer); Est. of Trovato v. Marcal Mfg. LLC, No. 11-CV-181 (DMC) (MF), 2011 WL 4550169, at *3–4 (D.N.J. Sept. 29, 2011) (state statute satisfied neither of the Miller prongs); Rogers v. Perry Dean Rogers & Partners, Architects, Inc., No. 08-11730-NG, 2009 WL 5124652, at *10 (D. Mass. July 27, 2009) (statute not saved from preemption); Noel v. Laclede Gas Co., 612 F. Supp. 2d 1051, 1059–60 (E.D. Mo. 2009) (statute was not saved from preemption and, in addition, was conflict preempted). However, a few courts have held that similar statutes were saved from preemption as laws regulating insurance. E.g., Est. of Foster v. Am. Marine SVS Grp. Benefit Plan, No. CV 17-165-M-DLC, 2018 WL 5810506, at *7 (D. Mont. Nov. 6, 2018) (holding Hawaii conversion rights notice law saved from preemption under Miller (this ruling by the district court on a motion to dismiss was not considered as part of the Ninth Circuit’s ruling in Foster)); Meyers v. Metro. Life Ins. Co., No. 12-3699, 2013 WL 820591, at *3–4 (E.D. Pa. Mar. 6, 2013).

59. 29 U.S.C. §§ 1109, 1132(a)(2).

60. Mass. Mut. Life Ins. Co. v. Russell, 473 U.S. 134, 142 (1985).

61. Id. at 140–41 (holding that although 29 U.S.C. § 1109 allows for the plan to recover for fiduciary breach, it precludes claims seeking recovery on behalf of individuals, as opposed to a plan).

62. 29 U.S.C. § 1132(a)(3).

63. E.g., Great-W. Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 217 (2002).

64. CIGNA Corp. v. Amara, 563 U.S. 421, 442 (2011).

65. Montanile v. Bd. of Trs. of Nat’l Elevator Indus. Health Benefit Plan, 577 U.S. 136, 148 n.3 (2016).

66. Harris v. Life Ins. Co. of N. Am., 419 F. Supp. 3d 1169, 1175–76 (N.D. Cal. 2019); Erwood v. Life Ins. Co. of N. Am., No. 14-1284, 2017 WL 1383922, at *12 (E.D. Pa. Apr. 13, 2017).

67. Erwood, 2017 WL 1383922, at *12.

68. See generally 29 U.S.C. § 1132(c).

69. Even state laws that affect notice of continuation rights do not provide any particular penalties for lack of notice. These statutes typically only extend the potential period within which a participant must apply for conversion coverage. See supra notes 55–57 and accompanying text.