ERISA-Fifth Circuit Upholds Plan Administrator’s Denial Of Death Benefits

In Hagen v. Aetna Insurance Company, No. 15-40597 (5th Cir. 2015), Plaintiff Judy Hagen (“Mrs. Hagen”) brought a suit against defendants Aetna Life Insurance Company (“Aetna”) and Hewlett Packard Company (“Hewlett Packard”) to recover a death benefit, as the beneficiary of her husband’s group life insurance plan under section 502(a)(1)(B) of ERISA. She appeals from the district court’s final judgment affirming the decision of the ERISA plan administrator to deny her the death benefit.

In this case, Mrs. Hagen’s husband, David Hagen, was an employee of Hewlett Packard and participated in the company’s Comprehensive Welfare Benefits Plan (the “Plan”), which included Basic Life Insurance Coverage and Basic and Supplemental Accidental Death and Personal Loss (“AD&PL”) coverage under a plan issued and administered by Aetna. David had named his wife, Mrs. Hagen, as the beneficiary under the Plan. David later died, following hip surgery necessitated by a fall at home. Mr. Hagen filed a claim with Aetna for a death benefit under the Plan. However, Aetna denied the claim, on the grounds that David’s death was not caused by the accidental fall, but by other preexisting, contributing medical conditions. This suit ensued.

On appeal, Mrs. Hagen contends that the district court erred by: (1) failing to reduce the deference afforded Aetna’s determination in light of Aetna’s conflict of interest, primarily due to procedural irregularities, Aetna’s history of biased claims administration, and failure to take steps to reduce bias in the instant case; (2) concluding that substantial evidence supported Aetna’s determination that Mr. Hagen’s fall was not an accident; and (3) failing to conclude that Aetna’s interpretation of the Plan’s exclusions clause was contradictory to the plain language of the Plan. The Fifth Circuit Court of Appeals (the “Court”) considered the contentions in (1) and (2) and found them to be without merit, since they were not supported by the evidence. As such, the Court did not feel that it had to consider (3). Accordingly, the Court affirmed the district court’s decision.

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