ERISA TIP: You Must Appeal A Denied Claim and Submit Evidence to Prove the Insurer Was Wrong
Diana Werbianskyj’s husband died after being electrocuted while installing lights from a scissor lift at work. While dealing with this horrible tragedy, she filed a claim for Accidental Death benefits under her husband’s accidental death insurance policy that he had through his employer, Parker Hannifin Corporation. Parker Hannifin’s plan was insured by a group Accidental Death & Dismemberment (AD&D) policy underwritten by Zurich American
Insurance Company. Zurich denied the claim, citing a policy exclusion for death caused when drugs contributed to the death, because her husband had high THC levels in his blood at the time he was electrocuted, indicating he had smoked marjiuna. When Ms. Werbianskyj appealed, she did not submit any evidence proving that her husband’s death was not caused by the influence of THC. The failure to submit opposing evidence proved to be key reason why she lost the case.
When Mr. Werbianskyj died, an autopsy found that his blood tested positive for THC. Zurich hired a doctor to review the records, and that doctor concluded that Mr. Werbianskyj’s “THC level was high enough to significantly impair the deceased and contribute to the events that led to his electrocution.” That led to Zurich denying the claim, citing a policy exclusion barring claims when someone was “under the influence” of a drug, and the drug caused or contributed to their death.
Because Mr. Werbianskyj’s AD&D policy was an employer group policy, Mrs. Werbianskyj had to appeal the denial before filing suit. This is required under the federal law that regulates employee benefits called ERISA, the Employee Retirement Income Security Act. Another peculiar aspect of ERISA is that a court will only review the evidence in the claim file from the original claim and the appeal. During the appeal, Mrs. Werbianskyj needed to provide Zurich with evidence that its policy exclusion did not apply.
Unfortunately, when Mrs. Zerbianskyj appealed Zurich’s decision, she failed to submit any documentation to prove why Zurich was wrong. When the case later went to court, the judge explained why this was a crucial error: in ERISA cases like this one, Mrs. Werbianskyj—the plaintiff—has the burden to show that Zurich American Insurance Company acted unreasonably in making their determination to deny benefits. To prove this, Mrs. Werbianskyj should have attempted to offer evidence that her husband’s death was not related in any way to being under the influence. Some things she could have shown might have included:
- Actual facts about why he died that would show impairment had nothing to do with it – perhaps he was pushed by a co-worker or a tool fell and he tried to catch it, losing his balance;
- Proof that he had worked while using marijuana for years without any incident, including being around electric wires;
- The opinion of expert witness explaining why Zurich’s doctor had to be wrong about the interpretation of the the TCH levels or how they would have impaired Werbianskyj.
- Perhaps even showing that Mr. Werbianskyj was not familiar with the operation of the scissor lift, and that contributed to his touching the live electric wires.
It was important for Ms. Werbianskyj to show that her husband’s judgment was not impaired by the THC in his system and that his death was, therefore, not caused/directly related to the THC in his system.
Since Mrs. Werbianskyj did not provide any evidence in light of her husband, the court found that Zurich American Insurance Company acted reasonably in following the policies as outlined in their Accidental Death Insurance Policy. When the case went to court in the U.S. District Court for the Northern District of Indiana, the federal judge held that Zurich American Insurance Company’s denial of accidental death benefits to Mr. Werbianskyj’s wife was appropriate. Zurich’s policy explicitly stated that coverage is denied when the death is related to drug use. Since Mrs. Webianskyj did not provide any evidence to disprove the insurance company’s claim that Mr. Werbiansky’s judgment was impaired due to the THC in his system, denial was appropriate.
Therefore, when appealing a decision made by the insurance company, it is crucial to provide additional documents in favor of the deceased to prove to the insurance company that the death really was an accident and was not caused or contributed by anything in a listed exclusion. Without any evidence rebutting the insurance company’s documentation, the insurance company’s decision will most likely be upheld.
Takeaway: In group benefits cases covered by ERISA, after an insurance company denies benefits, the beneficiary is entitled, by law, to file suit against the insurance company. However, it is crucial to supply evidence throughout the appeal process that proves that the insurance company’s denial was not only wrong, but completely unreasonable. Without evidence or documentation showing that the insurance company’s claim is wrong and not based in facts, someone challenging an insurance company decision in an ERISA case is destined to lose.
Case: Werbianskyj v. Zurich American Insurance Company, No. 3:15-CV-104, 2016 WL 4076367 (N.D.I.N. August 1, 2016).
If you need to appeal an Accidental Death or Life Insurance appeal under an employer’s ERISA plan, call our team of experienced ERISA attorneys from anywhere in the country to learn about your rights at (866) 282-5260.