One of the most common employer mistakes in group life insurance claims involves inaccurate tracking of employee work hours. Eligibility for coverage often depends on whether the employee meets a minimum hour requirement. When employers fail to track hours correctly, employees are misclassified as eligible or ineligible. The error stays hidden until a claim is filed. Then the insurer denies coverage because the employee supposedly did not meet the hour threshold. Families are blindsided. The employer blames the system. The insurer points to the policy. The result is a denial caused entirely by administrative failure.
This is not a technicality. It is a breakdown in the employer’s duty to administer benefits accurately. When employers miscalculate hours, fail to update status, or rely on flawed HR systems, employees lose coverage without notice and families lose the benefit they paid for.
How Hour Tracking Errors Happen
Hour based eligibility rules are simple on paper. Employees must work a minimum number of hours per week or per pay period to qualify for coverage. In practice, employers make mistakes that distort eligibility. The most common failures include:
HR systems that do not sync with timekeeping software
Manual entry errors when updating employee status
Failure to update hours after a schedule change
Misclassification of part time employees as full time
Misclassification of full time employees as part time
Failure to track variable hour employees under ACA rules
Outdated job codes that no longer reflect actual hours worked
These errors often go unnoticed for months or years. The employee continues working. Premiums continue to be deducted. The benefits portal shows active coverage. Only after death does the insurer claim the employee was never eligible.
Why Insurers Deny Claims Based on Hour Requirements
Insurers rely on employer supplied eligibility data. If the employer reports that the employee did not meet the hour requirement, the insurer denies the claim. Insurers do not audit time records. They do not investigate whether the employer tracked hours correctly. They simply accept the employer’s data and deny coverage.
Insurers often take the following positions:
The employee did not meet the minimum hour requirement
The employee was not eligible for coverage at the time of death
The employer incorrectly enrolled the employee
Premium deductions do not create coverage
The insurer cannot retroactively approve coverage for an ineligible employee
These positions ignore the fact that the employer created the error.
Why Employers Are Liable for Hour Tracking Failures
Employers are responsible for administering eligibility accurately. They must track hours correctly. They must update status when schedules change. They must ensure that HR systems reflect actual work patterns. When they fail, they are liable for the resulting denial.
Courts consistently hold employers responsible when:
The employer misclassified the employee
The employer failed to update hours after a schedule change
The employer deducted premiums for coverage the insurer never approved
The employer relied on flawed or outdated systems
The employee was never notified of any eligibility issue
Employers cannot shift responsibility to the insurer. They cannot claim the employee should have known. They cannot rely on system errors to defeat coverage.
How These Cases Turn Into Multi Party Disputes
When hour tracking errors surface, insurers often deny the claim outright. In some cases, they file an interpleader if multiple beneficiaries are involved. The employer then becomes the primary defendant because the denial was caused by its inaccurate records.
These disputes often involve:
Timekeeping logs
Payroll records
HRIS system data
Job classification codes
Emails showing the employer knew of hour discrepancies
Evidence that the employee consistently worked enough hours
The case becomes a question of who caused the eligibility failure and who must pay.
What Beneficiaries Should Do When Hour Tracking Errors Are Suspected
Beneficiaries should gather evidence immediately, including:
Timekeeping records
Pay stubs
Work schedules
Job descriptions
HR communications
The full claim file from the insurer
The goal is to show that the employee met the hour requirement or that the employer failed to track hours correctly.
Why These Cases Require Immediate Legal Action
Hour tracking failures are among the strongest employer liability cases in life insurance litigation. The employee worked the hours. The employer failed to track them. The insurer denied the claim. Without legal intervention, families risk losing the benefit entirely.
A lawyer can force the employer to produce time records, uncover system failures, and hold both the employer and insurer accountable. The focus is always on proving that the employee was eligible and that the employer’s mistake should not defeat coverage.