Employers that changebeware! Employees are entitled to know when their benefits will change under the Employee Retirement Income Security Act (ERISA).
It’s best to make sure everyone knows about the changes before they go into effect—especially if the new plan requires the employee to do something to qualify for a benefit. Get your employees’ acknowledgment that they were notified—either via signature or proof of delivery. Put the proof of receipt in the employee’s personnel file.
Recent case: Verizon Corporate Services employee Cynthia Boyce-Idlett took time off for pregnancy, child care leave and several illnesses, but lost her job after exhausting her short-term disability benefits. She thought she had signed up for a more generous long-term disability plan, but discovered too late that the plan required employees on short-term disability leave to return to work for at least 28 days before becoming eligible. She thought she could return to work for one day, go back on leave and still receive the benefits.
At issue was whether Boyce-Idlett received a letter outlining the 28-day requirement. She said if had she known, she would have found a way to return for those days in order to qualify. The court said she could take that claim to trial, and the employer will have to show it gave her notice. (Boyce-Idlett v. Verizon Corporate Services, No. 06-Civ-975, SD NY, 2007)
Final note: ERISA was passed, in part, to dissuade employers from terminating employees before important benefits vested. In effect, it is illegal to intentionally manipulatein order to avoid paying promised benefits such as retirement or disability payments. Not telling employees how to qualify for a benefit may have the same effect.