One of my partners emailed me the other day with kind words about my blog, and I responded that there was plenty to write about these days when it comes to ERISA and insurance. Amusingly, this morning’s inbox ended up presenting the perfect exemplar. I was sitting down to write some follow up comments on the idea of crypto in 401(k) plans, which I wrote about last week, in light of this excellent article in the Guardian on the crypto crash and its impact on individual investors, when this article from Bloomberg Law (subscription may be required) popped into my inbox, discussing a new Eleventh Circuit decision holding that “[a] doctor’s widower can seek $350,000 in supplemental life insurance payments [because] ERISA authorizes claims for equitable relief based on alleged fiduciary breaches in the benefit plan enrollment process.” As the article explains, the Court held that the equitable relief remedies authorized by ERISA provide the proper avenue for the putative beneficiary of the life insurance to recover the life insurance benefits that would have been available, had the employee been properly enrolled, where errors in plan administration prevented actual enrollment. In other words, the Court held that equitable remedies allow recovery of the value of the lost life insurance benefits, even though the employee was never actually enrolled and thus never technically actually qualified for the benefit under the plan terms.
I have litigated this issue several times, and its been a slow evolution. Initially, courts tended to treat the fact that the employee was never enrolled, and thus entitlement to the absent life insurance benefits never existed, as an existential level barrier to recovery. Courts were open to hearing how the deceased employee’s beneficiary might nonetheless be entitled to recover, but they were initially skeptical of arguments in favor of recovery under these circumstances. Over time, however, including in cases I have prosecuted, district courts have come to accept the premise that, in light of the Supreme Court’s recognition in Amara of equitable remedies for fiduciary errors, the value of the absent life insurance benefits should be recoverable as equitable relief independent of the plan and the lack of coverage for that amount under the plan itself. The acceptance of this premise has now progressed to the Circuit Court of Appeal level, with the article depicting this ruling by the Eleventh Circuit as a decision of first impression at the appellate level.
The decision is here, and a Massachusetts Lawyers Weekly article discussing a district court decision to the same effect in favor of my client in one of my cases that anticipated this type of appellate ruling several months ago, is here.