Court Allows ERISA Fiduciary Breach Claim Over Life Insurance Continuation

In Erban v. Tufts Med. Ctr. Physicians Org., Inc., No. 22-CV-11193-PBS, —F.Supp.3d—-, 2025 WL 2319055 (D. Mass. Aug. 12, 2025), the court addressed whether Tufts Medical Center and its HR director breached their fiduciary duties under ERISA when they failed to advise Dr. John Erban and his widow, Lisa Erban, of the option to continue his life insurance coverage following his terminal cancer diagnosis. The ruling offers important guidance on fiduciary obligations of plan administrators and HR personnel, particularly in situations where beneficiaries face life-altering illnesses.

Background

Dr. John Erban, a long-time oncologist at Tufts Medical Center, was diagnosed with terminal glioblastoma in August 2019 and never returned to work. While on medical leave, his employer continued to pay premiums on his basic life insurance, and his supplemental coverage premiums were deducted from his pay. As his condition worsened, Dr. Erban and his family sought guidance from Tufts’ HR director, Nicholas Martin, about how to preserve his life insurance benefits. Martin provided some information and forms related to conversion but did not inform the Erbans of their right to continue coverage under the plan’s “Sickness or Injury” continuation provision. Following Dr. Erban’s termination in February 2020 and his death that September, Hartford Life denied his widow’s claim for benefits, citing nonpayment of premiums and failure to submit a timely conversion application. Lisa Erban then brought suit under ERISA Section 502(a)(3), alleging fiduciary breaches and seeking equitable relief.

Fiduciary Status of the Defendants

The court first considered whether the defendants acted as ERISA fiduciaries. Tufts, as the named Plan Administrator, clearly qualified. The closer question was whether Nicholas Martin, Tufts’ HR director, was merely performing ministerial functions or acting in a fiduciary capacity.

The court concluded Martin acted as a functional fiduciary. He had positioned himself as the Erbans’ point of contact for benefit questions, invited them to direct inquiries to him, and provided detailed guidance regarding coverage options. Given his knowledge of Dr. Erban’s terminal brain tumor and diminished capacity, Martin was not simply processing paperwork; he was advising beneficiaries on plan rights. Citing the U.S. Supreme Court decision in Varity Corp. v. Howe, the court emphasized that answering participant questions about plan terms can itself constitute fiduciary activity, particularly when beneficiaries reasonably rely on the employer or HR staff for accurate guidance.

Breach of Fiduciary Duty: Continuation of Coverage

The central fiduciary breach arose from the defendants’ failure to inform the Erbans of their right to continue group life coverage under the Plan’s “Sickness or Injury” continuation provision. This provision allowed coverage to remain in force for up to twelve months after the participant was last actively at work, so long as they paid premiums.

Tufts argued that no continuation right existed absent a separate employer-adopted continuation “program.” The court rejected this argument, holding that the plan’s inclusion of standardized continuation provisions itself satisfied the condition. Both textual analysis and Hartford’s own interpretation supported the conclusion that continuation rights extended beyond termination so long as the participant ceased working due to sickness and premiums remained current.

Because Martin failed to disclose this continuation right—even when Lisa Erban specifically asked if she could “just private pay” to maintain coverage—the court held that defendants breached their duty to provide accurate and complete information. The court cited First Circuit precedent that fiduciaries cannot remain silent when they know (or should know) that a beneficiary is laboring under a material misunderstanding about benefits.

Conversion of Coverage

The court distinguished between the Erbans’ claims regarding conversion rights for basic and supplemental life coverage:

• Basic Life Insurance: Defendants provided multiple written communications describing the conversion right and its deadline, including emails and the termination letter. While the Erbans failed to act, the court held that ERISA does not impose a duty on fiduciaries to ensure beneficiaries fully understand conversion deadlines. Written materials were sufficient, and summary judgment was granted to Tufts on this claim.
• Supplemental Life Insurance: By contrast, the defendants failed to adequately disclose that Dr. Erban had a $400,000 supplemental life policy that also required conversion. Their communications were at best ambiguous, and Martin’s knowledge of Dr. Erban’s illness created a heightened duty to provide clarity. The court found this omission a fiduciary breach and granted summary judgment in Lisa Erban’s favor.

Remedies and Surcharge Damages

Lisa Erban sought surcharge damages equal to the lost policy benefits. While the First Circuit has not definitively ruled on whether surcharge is available under ERISA § 502(a)(3), the court here held it was an appropriate equitable remedy. Relying on CIGNA Corp. v. Amara and aligning with the majority of circuits, the court concluded that surcharge remains a traditionally equitable remedy against fiduciaries, designed to make beneficiaries whole for losses caused by fiduciary breach. The court rejected the Fourth Circuit’s contrary approach in Rose v. PSA Airlines as inapplicable where fiduciaries are involved.

Conclusion
The Erban decision underscores the heightened scrutiny courts apply to fiduciary conduct under ERISA when participants and their families seek clarity about critical benefits during times of severe illness. Plan administrators and HR departments must tread carefully, ensuring that their communications are not only accurate but also complete. Failure to do so risks liability for breach of fiduciary duty and exposure to surcharge damages.