Did a retired Connecticut state employee's life insurance payout depend on receiving the Comptroller's coverage-reduction letter before death?

Plain-English summary

After many Connecticut state employees retired through an early retirement program, the Comptroller asked whether its letter adequately notified retirees that life insurance coverage fell at retirement. The Attorney General said neither the State Personnel Act, state insurance laws, nor the policy required the state to send such a letter. The text of section 5-257(d) and an employee benefits booklet provided notice of reduced coverage. The opinion called reminder letters prudent and said they should arrive before the policy's 31-day conversion window closed to be meaningful.

The Comptroller also asked what benefit a retiree's beneficiary would receive if the retiree died before the letter arrived. The opinion answered that receipt of the letter did not determine coverage. Under the Aetna group policy described, coverage fell immediately at retirement. If the retiree died within 31 days, the beneficiary received the reduced coverage plus the maximum amount the retiree could have bought through conversion, as if the conversion right had been used. After that period, without conversion, the benefit was only the reduced coverage.

Currency note

This opinion was issued in 1990. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Historical summary

For retirees and beneficiaries: Under the policy the opinion analyzed, death within 31 days of retirement triggered the reduced benefit plus the maximum available conversion amount. After 31 days without conversion, only the reduced benefit applied. Receipt of the Comptroller's letter made no difference to that result.

For the Comptroller and state agencies: The Attorney General found no legal requirement to send the reminder letter or prescribed time for sending it. The opinion nevertheless called the letter prudent and said it should arrive before the conversion period ended to remind retirees of that right.

Common questions

Was Connecticut required to mail retirees a life insurance reduction notice in 1990?

The Attorney General found no requirement in the sources it reviewed. It said the statute and the benefits booklet provided notice, while a reminder letter was a prudent practice.

What happened if a retiree died before the Comptroller's letter arrived?

The letter's arrival did not determine the payout. The opinion said the statute and Aetna policy controlled, including the 31-day conversion period after retirement.

What benefit applied if death occurred within 31 days of retirement?

Under the policy described, the beneficiary received the reduced retiree coverage plus the maximum additional coverage the retiree could have bought under the conversion privilege, even if the retiree had not converted it.

What if the retiree had not converted coverage after 31 days?

The opinion said the death benefit then consisted only of the reduced retiree coverage.

Background and statutory framework

The opinion described section 5-257(d) as ending ordinary group coverage at employment termination, subject to any conversion right, while giving retired employees reduced life insurance without a required contribution. It then described the state's Aetna group policy as permitting a retiree to buy an individual policy for additional coverage up to the earlier employee coverage amount. That policy allowed 31 days for conversion and protected the full potential benefit during that period if the retiree died.

The Attorney General separated the legal coverage rule from the state's reminder practice. The opinion found no required notice letter, although it urged a timely one and said agencies should tell employees about the coverage reduction and conversion right in retirement discussions. Its answer about death benefits depended on the statute and policy terms, not on whether a letter had been received.

Citations and references

The opinion discusses Conn. Gen. Stat. section 5-257(d) and the state's Aetna group life policy. The official HTML renders the section symbol as “e” in several citations; the original-text section preserves that rendering.

Source

• Landing page: https://portal.ct.gov/AG/Opinions
• Opinion page: https://portal.ct.gov/ag/opinions/1990-formal-opinions/honorable-j-edward-caldwell-office-of-the-comptroller-1990017-formal-opinion-attorney-general-of-con

Original opinion text

Honorable J. Edward Caldwell, Office of the Comptroller, 1990-017 Formal Opinion, Attorney General of Connecticut

Attorney General's Opinion

Attorney General, Richard Blumenthal

May 30, 1990

Honorable J. Edward Caldwell

Office of the Comptroller

55 Elm Street

Hartford, CT 06106

Dear Mr. Caldwell:

This office has been asked to respond to two questions concerning life insurance coverage for retirees. Specifically, you have asked (1) whether the letter sent by the Comptroller's Office to retirees provides adequate notice to such retirees of the reduction in life insurance coverage that occurs upon retirement and (2) what benefit amount would a retiree receive who dies prior to receipt of the aforementioned letter from the Comptroller's Office. These questions were prompted by the large number of employees who retired under the State's recent early retirement program.

Life insurance for State employees and retirees is governed by Conn. Gen. Stat. e 5-257. Subsection (d) of e 5-257 provides in part:

The insurance of any employee insured under this section shall cease on termination of employment ... subject to any conversion privilege provided in the group life insurance policy or policies. Notwithstanding anything to the contrary in this section, the amounts of life insurance of insured employees retired in accordance with any retirement plan for state employees shall be as follows: ... [specific reduced coverage provisions omitted]. In no case shall a retired employee be required to contribute to the cost of any such reduced insurance.

Thus, under the provisions of e5-257, the amount of insurance provided a retiree by the group policy is lower than the amount provided the individual while the individual was employed by the State. However, as allowed by e5-257, the State's group life insurance policy with Aetna provides a conversion privilege. Under the conversion privilege a retired state employee may elect to convert his group policy to an individual policy and purchase additional insurance coverage up to the amount of insurance coverage the retiree had under the group policy while an employee of the state. The conversion privilege must be exercised within 31 days of retirement, and during that 31 day period, if an employee dies, his beneficiary is entitled to receive the maximum benefit possible as if the maximum conversion privilege had been exercised.

In response to your first question, there is no requirement in the State Personnel Act, state insurance laws, or in the policy that requires the State to provide notice to retirees of the reduction in life insurance coverage. However, the text of e 5-257(d) provides employees with notice that their insurance coverage will be reduced upon retirement. In addition, employees are given a booklet explaining their benefits when they begin employment with the State, and this booklet includes information on reduced coverage upon retirement and of the conversion privilege. However, since employees may not keep such booklets over many years of employment, sending letters to retirees reminding them of the reduced coverage and the conversion privilege is a prudent practice.

As there is no requirement that the letters be sent, there is also no prescribed time frame for sending them. However, for the letters to provide a meaningful reminder of the conversion privilege, they should be sent before the 31 day period expires for exercising the conversion privilege. It is worth noting that the Aetna administration manual provided to State personnel officers indicates that each agency should have forms relating to the conversion privilege. Agencies should be reminded to inform employees of the reduction in coverage and conversion privilege when discussing retirement with employees.

In response to your second question, the coverage amount applicable to an employee who dies is not dependent upon receipt of the letter from the Comptroller's Office. Rather, it is governed by e 5-257 and the policy. As indicated previously, an employee's coverage is reduced immediately upon retirement. However, an employee who dies within 31 days of retirement is entitled to a benefit equal to the reduced coverage plus the maximum amount he was eligible to purchase under the conversion privilege. In effect, the policy provides coverage to such employees as if they had exercised the conversion privilege. After 31 days, if an employee has not exercised the privilege, upon death he is entitled to only the reduced amount of coverage.

I trust this is responsive to your request for advice. Please feel free to contact me if you have any further questions.

Very truly yours,

CLARINE NARDI RIDDLE

ATTORNEY GENERAL

Shelagh P. McClure

Assistant Attorney General

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