Group Life Insurance Employer and Plan Administrator Errors Fact Sheet

Christian Lassen, Esq. | Quoted in The Wall Street Journal | 25 Years Experience Helping beneficiaries nationwide challenge group life insurance denials caused by employer errors

What Are Employer and Plan Administrator Errors in Group Life Insurance

Employer and plan administrator errors occur when mistakes by an employer, human resources department, or benefits administrator cause a life insurance claim to be denied, delayed, or underpaid. These errors are especially common in employer provided group life insurance policies governed by ERISA.

Unlike individual life insurance, group policies rely heavily on employer payroll systems, enrollment records, beneficiary processing, and coverage reporting. When these systems fail, beneficiaries are often unfairly denied benefits.

Common Employer and Plan Administrator Errors

Employer and plan administrator mistakes frequently include:

• Failure to deduct premiums from payroll
• Failure to remit deducted premiums to the insurer
• Incorrect reporting of coverage amounts
• Errors during open enrollment or initial enrollment
• Failure to process beneficiary designation changes
• Failure to provide conversion or continuation notices
• Incorrect termination dates reported to the insurer
• Loss or mishandling of enrollment forms
• Failure to notify employees of coverage changes

Many claim denials blamed on the insured are actually the result of employer error.

How Employer Errors Lead to Denied Claims

When a life insurance claim is submitted, insurers often rely entirely on information provided by the employer or plan administrator. If that information is inaccurate, incomplete, or outdated, the insurer may deny the claim without conducting further investigation.

Common denial scenarios include claims denied for alleged lapse despite continued payroll deductions, denial due to missing beneficiary forms that were submitted but never processed, or denial after termination when required conversion notices were never provided.

Under ERISA, employers and plan administrators have fiduciary duties. Failure to meet those duties can invalidate denials and support recovery of benefits.

Legal Principles Beneficiaries Should Know

Several legal principles protect beneficiaries when employer errors occur:

• Employers and plan administrators owe fiduciary duties under ERISA
• Insurers cannot blindly rely on incorrect employer records
• Failure to provide required notices can preserve coverage rights
• Administrative errors may override technical policy defenses

Courts often focus on fairness, reliance, and procedural compliance when employer fault is established.

What Beneficiaries Should Do When Employer Error Is Suspected

If a group life insurance claim has been denied and employer error may be involved, beneficiaries should act promptly.

Request the full claim file and plan documents
Obtain payroll records showing premium deductions
Collect enrollment and beneficiary designation forms
Request employer correspondence regarding coverage
Preserve communications with human resources or benefits staff

Early documentation is often critical to proving employer fault.

Key Takeaways

• Employer and plan administrator errors are a leading cause of group life insurance denials
• Payroll and enrollment mistakes often invalidate denials
• ERISA imposes duties on employers and plan administrators
• Beneficiaries have strong rights when employer errors cause coverage disputes

For detailed legal guidance, see our pages on ERISA life insurance denials or contact our office for a free consultation.