ERISA Accidental Death Benefits

Dallas area attorneys handling life insurance benefits under an ERISA plan need to read this 5th Circuit opinion. It is styled, Judy Hagen v. Aetna Insurance Company; Hewlett Packard Company.
David Hagen was an employee of Hewlett and had life insurance coverage under a company benefits plan administered by Aetna.
The terms of the Policy state that to receive payment under the accidental death benefit provisions, Aetna must receive proof that, inter alia, death “was a direct result of a bodily injury suffered in an accident.” The Policy states that an “accident” is “a sudden and external trauma that is; unexpected; and unforeseen; and is an identifiable occurrence or event producing, at the time, objective symptoms of an external bodily injury.” To qualify as a covered “accident,” an occurrence or event “must not be due to, or contributed by, an illness or disease of any kind including a reaction to a condition that manifests within the human body or a reaction to a drug or medication regardless of the reason the insured has consumed the drug or medication.” The Policy defines “injury” as “an accidental bodily injury that is the sole and direct result of . . . an unexpected or reasonably unforeseen occurrence or event . . . or the reasonable unforeseeable consequences of a voluntary act by the person.” The Policy specifies that “an injury is not the direct result of illness,” and defines illness as “[a] pathological condition of the body that presents a group of clinical signs and symptoms and laboratory findings peculiar to it and that sets the condition apart as an abnormal entity differing from other normal or pathological body states.”
Additionally, the Policy contains several exclusions that preclude receipt of benefits for a loss when the loss is caused or contributed to by “bodily or mental infirmity,” “illness, ptomaine, or bacterial infection,” “use of alcohol,” “use of intoxicants,” or “medical or surgical treatment.” However, a loss that is caused or contributed to by illness, ptomaine, or bacterial infection, or medical or surgical treatment is not excluded when the loss is caused by “an infection which results directly from the injury … or surgery is needed because of the injury.”
On August 6, 2010, Mr. Hagen fell in his home, fracturing his right hip. Mr. Hagen was taken to the hospital where he was told he would require hip surgery. The doctors who examined him noted Mr. Hagen’s extensive medical history and that he suffered from a number of ongoing health problems. He was a regular smoker and a chronic alcoholic who drank two six-packs of beer a day; he had previously suffered from lung cancer; he suffered from increased pedal edema, hyperkalemia, and a deep vein thrombosis in his right leg; and at the time of the fall, he suffered from Chronic Obstructive Pulmonary Disorder (COPD). One physician’s notes discuss Mr. Hagen’s diagnosis of COPD, and state that Mr. Hagen reported that he could not walk long distances, had a history of difficulty with falls, and felt he was severely limited. The doctor concluded that his level of functioning due to his COPD had been very poor. Additionally, Mr. Hagen was generally malnourished, was minimally ambulatory, and spent most of his time lying in bed or sitting. Mr. Hagen had surgery for his hip; although he initially seemed to be recovering from surgery, he ultimately died a couple of weeks afterward.
An autopsy was performed the following day, and the report states that Mr. Hagen’s cause of death was “complications of blunt force trauma of lower extremity with intertrochanteric fracture of femur” and lists as contributory causes Mr. Hagen’s COPD, chronic alcoholism, and hypertensive cardiovascular disease. Under manner of death, the report reads: “Accident (Fell).”
Mrs. Hagen made a request for benefits and was denied because:
there was nothing in the file indicating that Mr. Hagen suffered a bodily injury in an accident that was significant enough to cause his death and his death was the result of that injury, rather his death was caused or contributed to by a bodily infirmity, illness and disease, use of alcohol, use of intoxicants and medical or surgical treatment which are limitations excluded by the Policy.
Mrs. Hagen requested that Aetna review its first determination, and on March 7, 2012, Aetna denied Mrs. Hagen’s claim for a second time. Aetna acknowledged in this denial letter that it should not have initially denied the claim based on the Policy’s exclusions for medical or surgical treatment, or Mr. Hagen’s use of alcohol or use of intoxicants, but concluded that Mr. Hagen’s “death was more consistent with his pulmonary compromise, and not injuries from his fall.” Further, it concluded that “his fall was caused or contributed to by his overall poor health status, and would therefore be excluded under the terms of the Policy.” Thus, two possible bases for Aetna’s denial emerge: (1) that Mr. Hagen’s fall was not an “accident” because it was caused or contributed to by his various illnesses; and (2) that his death was not a covered “loss” because it was not caused by injury from the fall, but rather resulted from his contributing medical conditions.
Mrs. Hagen argues that the fact that Aetna’s reason for denying her claim in its second denial was different from the reason given in the first letter denying her claim evinces procedural reasonableness. Mrs. Hagen is correct that Aetna, to some extent, changed its rationale for denying her claim in its second denial. But the fact that Aetna slightly altered its basis for denial during its second review, which included the medical review of a nurse consultant, is not evidence of procedural unreasonableness. If anything, it demonstrates that Aetna’s review process involved giving Mrs. Hagen’s claim a meaningful second look. Ultimately, Mrs. Hagen has not provided evidence that suggests that the method by which Aetna made its determination in her case was procedurally unreasonable.
The Court considered whether substantial evidence supports Aetna’s determination that Mr. Hagen’s fall was not an “accident,” as that term is defined under the Policy. To be entitled to payment of an accidental death benefit under the Policy, the claimant must provide proof that death “was a direct result of a bodily injury suffered in an accident.” “Accident” is a defined term that means “a sudden external trauma that is; unexpected; and unforeseen; and is an identifiable occurrence or event producing, at the time, objective symptoms of an external bodily injury” and is not “due to, or contributed by, an illness or disease of any kind.” Aetna contends that Mr. Hagen did not suffer a covered “accident,” because his fall was due to or contributed to by his illness. Thus, the inquiry is whether there is substantial evidence in the record to support Aetna’s determination that Mr. Hagen’s fall was due to or contributed to by his illness. The Court then examined the evidence Aetna had reviewed in reaching it’s determination to deny benefits and sustained the lower court ruling in Aetna’s favor.