When a life insurance claim is denied because of an enrollment mistake, many beneficiaries ask a critical question: can the employer be held responsible?
In some situations, the answer is yes. But these cases are governed by federal ERISA law, which has very specific rules about when an employer can be sued and what remedies are available.
Attorney Christian Lassen represents beneficiaries nationwide in ERISA life insurance disputes.
How Enrollment Errors Lead to Denials
Employer provided life insurance plans rely on administrative systems to track elections, eligibility, and coverage levels. When something goes wrong in that system, coverage may never be properly activated.
Common enrollment errors include:
HR failing to submit enrollment data to the insurer
Incorrect coverage amounts entered into the system
Failure to process evidence of insurability
Misclassification of the employee’s eligibility status
Failure to process conversion or portability elections
After the insured dies, the insurer may deny the claim based on what its records show, even if the employer’s records tell a different story.
When the Employer May Be Liable
Under ERISA, employers and plan administrators have fiduciary duties when they manage employee benefit plans.
An employer may face liability if it:
Provides incorrect information about coverage
Fails to follow plan procedures
Misrepresents whether coverage is in place
Fails to properly handle enrollment or continuation rights
Does not act in the best interest of plan participants
These cases often focus on whether the employer breached a fiduciary duty.
The Role of the Plan Administrator
If a life insurance claim was denied because of an enrollment error, legal review may help determine whether the employer or plan administrator can be held responsible under ERISA.