A Dell Inc. employee’s widow has been allowed to pursue part of her lawsuit against the company, alleging that she lost $775,000 in life insurance benefits because her husband wasn’t properly informed about the need to convert his group coverage to an individual policy.
Judge David Alan Ezra ruled that the widow can proceed with claims that Dell breached its fiduciary duties by failing to adequately inform her husband that his coverage would lapse if he didn’t submit paperwork to convert to individual coverage while on disability leave for cancer treatments.
The lawsuit stems from the employee’s decision to take disability leave for cancer treatments. During this period, he was required to convert his company-sponsored life insurance to an individual policy to maintain coverage. The widow alleges that Dell failed to properly notify her husband of this requirement, resulting in the lapse of his coverage and the subsequent loss of $775,000 in benefits.
While the claims against Dell can proceed, Judge Ezra dismissed the claims against Metropolitan Life Insurance Co., the insurer, as it was not clear that they were aware of the employee’s health status.
This case highlights the importance of clear communication by employers regarding employee benefits, particularly during significant life events such as disability leave. The outcome of this lawsuit could have implications for how companies manage their employee benefit programs and communicate with their workforce about critical benefit details.
