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A Lowe's employee was properly denied ERISA benefits on her death because of an insurance administrator's interpretation of her plan's coverage of work trips.
In a very sad case before the Fifth Circuit, Elizabeth Porter died in 2008 when a car hit hers head-on, killing herself and her unborn child. Porter had insurance benefits through her employer, Lowe's, but the company refused to pay those benefits to her husband because Porter had died while going to and from work.
The Fifth Circuit sided with the insurance administrator in Porter v. Lowe's Companies, finding that despite the gruesome facts, the decision was reasonable enough.
Porter's Employee Insurance Policy
Porter's policy in question was the Business Travel Accident Insurance Plan ("Plan"), one that covered employees like Porter for injury or death when on business for Lowe's during a "bonafide trip." The policy also explicitly notes that injuries during "travel to and from work" are not included.
Here's where the case gets tricky: Porter was technically on her way back to Lowe's, but she wasn't "going to work." She was responding to a security alarm that went off at the store. She was actually headed home, then turned around to respond to the alarm when she was hit and killed by a reckless driver.
The admin for the Plan resolved this ambiguity by deciding that the terms excluded Porter's death, which prompted Porter's husband to sue in federal district court under the Employment Retirement Income Security Act (ERISA).
The district court ruled that the denial of benefits was an abuse of discretion, and the Fifth Circuit reviewed the case under the same standard.
Denial Not Abuse of Discretion
The Plan administrator's decision was based on the evidence that Porter's conduct leading up to the accident didn't qualify her dependents for coverage. The Fifth Circuit reviewed that decision for abuse of discretion.
Meeting this standard is a fairly low bar, and the Fifth Circuit agreed that this decision was not arbitrary or capricious and was based on substantial evidence.
There was a 1975 case on point, involving someone killed while picking up a coworker for company business. But the Fifth Circuit brushed aside this case as non-instructive because the policy language was different.
With no other compelling evidence or case law opposing the Plan administrator's decision, the Porter court was free to sidestep any determination of the coverage decision's legal merits and determine it was not an abuse of discretion.
While denying a widower benefits is always a bummer, the policy's language did allow for a less-than-generous interpretation of coverage. Choosing the less crowd-pleasing option, in the Fifth Circuit's opinion, was not an abuse of discretion.