We occasionally hear that an employer wants to promise greater health care coverage than is provided under the plan terms, either in a sympathetic scenario, or to facilitate a separation. Unfortunately, this “generosity” can leave the employer obligated to provide costly benefits, without insurance coverage. 

Treating a Qualified Beneficiary on Short-term Disability as Continuing to be an Eligible Employee

Take, for example, Clarcor v. Madison National Life Insurance.  The employer maintained a self-funded health plan, and purchased a stop-loss policy.  The policy provided that coverage was limited to benefits paid in accordance with plan terms. Under the plan terms, …