United States District Court, D. Colorado
THE CLAUDIA NELSON FAMILY TRUST, by Elizabeth A. Spanel, trustee, Plaintiff,
HARTFORD LIFE AND ACCIDENT INSURANCE COMPANY, Defendant.
ORDER AFFIRMING DEFENDANT’S DENIAL OF BENEFITS
William J. Martínez United States District Judge
This case arises under the Employee Retirement Income Security Act of 1974, 29 U.S.C. §§ 1001 et seq. (“ERISA”). Plaintiff, the Claudia Nelson Family Trust (“Trust”), claims that Defendant Hartford Life and Accident Insurance Company (“Hartford”) violated ERISA when it issued its final determination letter denying supplemental life insurance benefits to Claudia Nelson (“Nelson”), who died on January 8, 2013. (ECF No. 1.)
For the reasons set forth below, Hartford’s denial of benefits is affirmed and the Trust’s claim for disability benefits is denied.
I. FACTS & PROCEDURAL HISTORY
A. The Plan and the Policy
Nelson was a copy editor for her employer, Swift Communications (“Swift”). (ECF No. 29 at 7, ¶ 1.) Nelson was therefore a participant in Swift’s group employee benefits plan (“Plan”). (Id. at 8, ¶ 2.)
Effective January 1, 2013, Hartford funded the Plan through Group Policy No. GL-872957 (“Policy”). “The Policy [was] incorporated into, and form[ed] a part of, the Plan.” (Administrative Record (“R.”) (ECF Nos. 21-1 to 21-4 and 37-1 to 37-2) at 35.) ERISA governs both the Plan and the Policy. (Id. at 26, 35.) The Plan designates Hartford as the claims fiduciary for benefits provided under the Policy. (Id. at 35.) The Plan grants Hartford “full discretion and authority to determine eligibility for benefits and to construe and interpret all terms and provisions of the Policy.” (Id.)
B. The Supplemental Life Insurance Policy
Sometime in 2012, Nelson developed cancer. (Id. at 194.) Her “actual date last physically at work” was September 7, 2012. (Id. at 198.) In November 2012, however, Nelson took advantage of Swift’s open enrollment period for 2013 to enroll for a supplemental life insurance benefit of $50, 000. (Id. at 189.) On January 8, 2013, Nelson succumbed to her cancer. (Id. at 194.)
C. The Trust’s Claim
By letter dated May 28, 2013, Nelson’s husband (apparently acting on the Trust’s behalf) made a claim on Hartford both for basic life insurance benefits in which Nelson had been enrolled for many years, as well as for the supplemental benefits in which she had just enrolled. (Id. at 186.) Hartford began to investigate the claim, and in particular communicated several questions to Swift, including an e-mail asking Swift to clarify whether Nelson’s supplemental life insurance was a continuation of a previous year’s benefits or whether Nelson instead had enrolled for the first time in the previous year’s open enrollment period. (Id. at 184.) Swift replied, confirming that Nelson had enrolled for the first time in the previous year’s open enrollment period, for a policy effective January 1, 2013. (Id. at 179.) Swift further clarified that Nelson “was off work, but on a paid medical leave (vacation, sick, MML [Swift’s major medical leave program]) through December 2012.” (Id. at 174.)
Swift also filled out and sent to Hartford a Hartford-issued “proof of death form.” (Id. at 198.) One line in that form states, “Provide employee’s actual date last physically at work, ” to which Swift responded, “09/07/2012.” (Id.) The next line of the form states, “Provide a reason employee did not return to work on their next scheduled workday, ” and provides checkboxes for four responses: “Illness, ” “FMLA (provide approval form), ” “Retirement, ” and “Other (please explain).” (Id.) Swift checked “FMLA (provide approval form), ” but apparently did not attach any approval form. (Id.)
Through other parts of the form, Swift informed Hartford of Nelson’s earnings, stating that “[e]ffective . . . 01/09/2013” (i.e., the day after Nelson’s death) her “[r]egular hours scheduled to work” were “40.” (Id.) Swift also reported that Nelson’s insurance was “discontinued” as of “01/31/2013.” (Id.)
D. Hartford’s Denial of Supplemental Life Insurance Benefits
By letter dated July 16, 2013, Hartford informed the Trust that it had approved Nelson’s basic life insurance benefits but denied Nelson’s supplemental life insurance benefits (“Denial Letter”). (Id. at 71–75.) Noting that Nelson’s supplemental life benefit was scheduled to become effective January 1, 2013, at the earliest, Hartford pointed to the following portion of the Policy regarding circumstances in which that effective date could be deferred:
Deferred Effective Dated: When will my effective date for coverage or a change in my coverage be deferred?
If, on the date You are to become covered:
1) under The Policy;
2) for increased benefits; or
3) for a new benefit;
You are not Actively at Work such coverage will not start until the date You are Actively at Work.
(Id. at 72 (quoting id. at 11) (formatting in original).) Hartford’s Denial Letter then quoted the definition of “Actively at Work”:
Actively at Work means at work with Your Employer on a day that is one of Your Employer’s scheduled workdays. On that day, You must be performing for wage or ...