Many families are shocked to learn that a group life insurance claim can be denied even though the employee paid premiums and reasonably believed coverage was in place. One of the most common reasons insurers give is that the insured was not actively at work when coverage allegedly became effective.
These denials almost always surface only after death and most often involve employer sponsored life insurance plans governed by federal law.
What “Actively at Work” Means in Group Life Insurance Policies
Most group life insurance policies require an employee to be actively at work before coverage begins or increases. While the precise definition varies by plan, insurers typically argue that actively at work means the employee was:
• Physically present and working
• Performing their regular job duties
• Working the required minimum number of hours
• Not on medical leave, disability leave, or extended absence
If the insurer claims these conditions were not met on the effective date, it may deny the death benefit entirely by asserting that coverage never attached.
Why These Denials Usually Appear Only After Death
Employees are rarely told that coverage did not take effect. Premiums are commonly deducted automatically through payroll, which reinforces the belief that coverage is active and secure.
The issue typically arises only after a death claim is submitted. At that point, the insurer reviews employment records, attendance history, and medical information and looks for a basis to retroactively deny coverage.
Families often learn for the first time that the insurer is disputing whether coverage ever existed.
Common Situations That Trigger Actively at Work Denials
These denials frequently occur when the insured:
• Returned to work briefly after a serious illness
• Worked remotely or under modified duties
• Was on approved medical or family leave
• Increased coverage shortly before death
• Enrolled during open enrollment while ill
• Was transitioning between positions or schedules
Insurers often apply a rigid and narrow interpretation of what qualifies as active work, even when the employee continued contributing to the employer.
Why Paying Premiums Does Not Automatically Prevent Denial
One of the most confusing aspects of these cases is that premiums were paid. Families understandably assume that payment equals coverage.
Group life insurance does not always operate that way. Insurers often argue that premium collection does not override eligibility requirements. After denying the claim, they may refund premiums and assert that coverage never existed.
That refund does not mean the denial is legally correct.
Employer Errors That Commonly Contribute to These Denials
Many actively at work denials stem from employer mistakes, including:
• Allowing enrollment when eligibility requirements were not met
• Failing to explain coverage conditions clearly
• Misreporting employment or leave status
• Submitting delayed or inaccurate enrollment paperwork
Under federal law, these errors may still expose the insurer or plan administrator to liability in certain circumstances.
How ERISA Changes the Claim Process
Most employer sponsored life insurance plans are governed by ERISA. This significantly affects how these disputes must be handled:
• Strict appeal deadlines apply
• Administrative appeals are mandatory before filing suit
• Evidence must be submitted early
• Courts often defer to plan administrators
Failing to build a strong administrative record during the appeal can permanently damage the claim.
Challenging an Actively at Work Denial
These denials can often be challenged successfully. Key issues frequently include:
• Whether the policy definition was actually satisfied
• Whether the insurer applied the rule consistently
• Whether the employee performed job duties in any capacity
• Whether the employer misrepresented eligibility
• Whether the insurer waived or ignored the requirement
Medical records, payroll data, supervisor statements, job descriptions, and enrollment materials often play a decisive role.
Why These Cases Are High Stakes
Group life insurance benefits are often substantial and may represent the primary financial protection for surviving family members. An actively at work denial can leave families without the support they were counting on.
Because these denials arise only after death, beneficiaries are often grieving while facing short deadlines and complex federal rules.
Take Action Quickly if Coverage Is Disputed
If a group life insurance claim was denied because the insurer claims the insured was not actively at work, do not assume the denial is final. These cases require prompt and strategic legal review.
Our firm represents beneficiaries nationwide in denied group life insurance claims and has successfully challenged actively at work denials under ERISA. We offer free case evaluations and charge no fee unless benefits are recovered.
If your claim was denied for this reason, contact us before critical deadlines expire.