ERISA alert: Federal courts have pushed the door open a little further for ERISA plaintiffs to go after personal losses caused by a fiduciary’s wrongdoing.
As you know, the Employee Retirement Income Security Act (ERISA) is a federal law setting standards for pension plans for private-sector companies. Employers are not required to establish pension plans, but ERISA requires the ones that do to meet certain minimum standards.
The McCravy v. Metropolitan Life Insurance Co. decision is being described as a victory for workers who’ve been hurt by the wrongdoing of the people who are supposed to be minding the insurance and pension store.
Essentially, an insurance company accepted premium payments and then refused to pay the beneficiary. The beneficiary argued the insurance company misled her by continuing to accept her payments, when she could’ve turned to another insurance supplier and purchased coverage.
The Bank of America employee who filed the suit had a life insurance policy for her daughter through her employee benefits plan. She paid on the plan from the time her daughter was 19 until she was murdered at age 25.
The employee, who was the beneficiary, filed a claim with MetLife for life insurance benefits.
MetLife declined to pay, saying the daughter wasn’t an eligible dependent child, since she was older than 24. MetLife offered to refund $300 in premiums the mother had paid; the mother refused the check and headed for court.
The case made its way through the legal system.
Ultimately, it was decided that people had the right under ERISA to pursue “other appropriate equitable relief” for monetary recovery.
