Navigating Life Insurance as a Union Member
According to the Bureau of Labor and Statistics, approximately 14.6 million workers were members of unions in the United States in 2019. Almost one million of those union members were in Pennsylvania alone. As we all know, labor unions work to protect their members by negotiating a contract with employers called a collective bargaining agreement (“CBA”). The CBA lays out agreements on all major parts of employment including: work schedules, compensation, processes and procedures, and benefits. Life insurance is one of the most common employer-provided benefits in the United States.
Obviously, a life insurance policy is a contract with its own set of provisions governing how benefits will be paid in the event of a loss. These provisions reflect a set of discussions between an insurance company and the employer. However, a CBA is also a contract with its own set of provisions reflecting thorough and complicated negotiations between an employer and the union. As you might imagine, these two contracts don’t always line up to produce a seamless set of rules and guidelines for employees and their families.
For example, an employee is about to retire from their company and is looking into what their benefits will look like once they are in retired status. When the employee asks their company whether their company paid life insurance will continue after retirement, the company provides information given by the insurance company which indicates that the employee will need to convert their coverage to an individual policy. However, when the employee speaks with the union representative, they are advised that the CBA provides for retiree life insurance. A clear conflict arises between the provisions of the life insurance contract and the CBA. Is the retired employee entitled to company-paid retiree coverage?
Another example would be if an employee’s spouse attempts to make a claim for accidental death benefits after the employee’s passing and the company-paid life insurance policy includes an accidental death benefit rider but the CBA does not mention accidental death coverage whatsoever. Does the employee’s spouse have a right to accidental death benefits?
Generally, in situations where there is a conflict between a CBA and a life insurance policy, the CBA will decide the outcome. However, in the two situations above, the outcome isn’t quite so clear. That’s when a contract attorney needs to get involved. Let’s face it, the person who drafts a contract is only a human who makes human mistakes such as; gaps in the contract provisions, contradictions, and unclear language. It is the job of a contract attorney to look at how the law has treated these errors in the past and advocate for the interpretation that will benefit his or her client. Instead of simply accepting a denial of life insurance benefits through company-paid and union-governed life insurance policies, contact an attorney that is well-versed in life insurance contract disputes.
