Miscommunicating the Benefit Plan, Still The Same

Bob Seger and the Silver Bullet Band on their Rock and Roll Never Forgets Tour this Spring. Still The Same.

And still the same is the miscommunication that sometimes happens between the employee and the employer about the benefit program.

It could be, for example, the Summary Plan Description and plan document don't gibe as discussed in my earlier blog post, Plan Administrator between rock and hard place when plan document and Summary Plan Description conflict.

Or it could be what was the employee was told and what the plan document says are different. Consider this, for example. Employee seeks verification that her surgery would be covered before undergoing treatment. Customer service representative confirms coverage. Claim denied after surgery. Employee files lawsuit.

Not a made up set of facts, but a real case which was the subject of a recent article, Seventh Circuit Makes Damages More Available for Employees Given Wrong Information About Benefits, written by McDermott Will & Emery attorneys, Prashant Kolluri and Nancy G. Ross.

I’m not an ERISA attorney so I'll the leave the legal analysis and the application of this case to other situations including retirement plans to them.

But there's a practical aspect to all of this. Simply, we can expect more of these conflict situations to arise as the aging workforce retires and take distributions; and as the Affordable Care Act changes the health insurance landscape.

My suggestion? Employers should consider having an experienced ERISA attorney review the plan documentation: plan document, Summary Plan Description; and any other employee communication or handbooks that discuss benefits. File that expense under Risk Management.

Old Time Rock and Roll Note: The song, Still The Same, written and recorded by Bob Seger in 1978, peaked at number 4 on the U.S. Billboard Hot 100. It was on his tenth studio album, Stranger In Town.

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