Background
Arthur Vest worked for Resolute for nearly forty years and bought $300,000 of optional group life coverage on top of his base coverage. He stopped working because of complications from diabetes and moved onto disability benefits. Under the plan, his base coverage continued but the optional coverage ended, with a right to “port or convert” it within 31 days. Resolute ended the optional coverage in May 2016 without telling him about that right. He died that October, and the carrier paid his widow only the base amount. She sued Resolute under ERISA section 502(a)(3) for breach of fiduciary duty.
What the court held
The panel affirmed dismissal. Under circuit precedent, a fiduciary can breach its disclosure duty by giving a misleading answer to a participant’s question, by offering misleading information on its own initiative, or by failing to give a disclosure ERISA requires. None of those applied. ERISA and its regulations do not require conversion information in a summary plan description, and the widow conceded there is no general duty to send conversion notices. In any case, the plan description here said coverage would end and could be converted. The complaint did not allege that the Vests asked about benefits before his death or that Resolute knew facts showing its silence would be harmful.
Judge Stranch dissented. Without being asked, Resolute had sent a benefits summary saying the optional coverage was no longer in effect, and the summary did not mention the conversion deadline. In her view, that omission made the document misleading.
Why it matters
Lost conversion and portability rights are a common source of group life disputes when someone leaves work because of illness. Vest shows how much depends on the facts: what the plan documents said, whether anyone asked the employer or insurer a question, and what the employer knew or sent. Other circuits and other facts can lead to different results. See our employer group life guide.
Read the opinion
Vest v. Resolute FP US Inc., 905 F.3d 985 (6th Cir. 2018) (CourtListener).
Not legal advice. This page summarizes general rules and the specific statutes cited. Your policy's wording, the state whose law applies, and whether the coverage came through an employer can all change the result. See the disclaimer and editorial policy.