What happens if your employer switches providers for an ERISA benefit? It can mean that you start over in meeting certain terms, such as a pre-existing condition exclusion or some other limitation. This recently happened with a two-year suicide exclusion in Cole v. American Heritage Life Insurance Company, 2018 WL 1875632 (N.D. Ind. Apr. 18, 2018). Mr. Cole, for unreported tragic reasons, took his own life on January 2, 2016. His wife sought benefits for their minor children, which the Defendant refused to pay.

The Facts

• January 1, 2014: Mr. Cole started paying for a Lincoln National Life Insurance Company policy endorsed by his employer that did not include a suicide exclusion.
• January 1, 2016: Coverage under the Lincoln National Life Insurance Company policy continued for two years until this date.
• January 1, 2016: Mr. Cole's employer switched the plan insurer to American Heritage Life Insurance Company, and that policy contained a suicide exclusion for the first two years.
• January 2, 2016: Mr. Cole took his life.

The Second Tragedy

When Mr. Cole took his life, he must have thought he was at least providing for his children. Also, he may not have known there was a switch in carriers by his employer. In court, his wife argued that, despite the switch, the coverage was continuous even though the company providing the benefit was not. The court ruled against the children, finding that the company and the policy were different, and there was no continuity provision in the policy.

What We Learned

If your employer is considering a switch of insurance companies for any type of plan, it is important that the new policy credit the past coverage. There are many insurance companies with policies that have this continuity. It is critical to consider this with ALL types of group policies, including long-term disability. Employees must request new policies, read them carefully, and ask questions about the impact. Insurers are eager enough to provide coverage that they can later avoid.