No Life Insurance Benefits for Overdose

The United States District Court for the Northern District of Illinois, in an opinion written by Judge Rowland, applying federal law, held that a decedent’s lethal overdose of cocaine and fentanyl did not trigger coverage under an Accidental Death & Dismemberment (“AD&D”) provision in an employee health plan. Specifically, the District Court found that the decedent’s parents could not recoup $50,000 for their son’s death under AD&D coverage because his lethal overdose was not “accidental” under the terms of the plan.

The decedent, an employee of the Chicago Museum of Contemporary Art and participant in the Museum’s employee welfare benefit plan, had a years-long history of drug and alcohol abuse prior to his death due to an overdose of cocaine and fentanyl. The medical examiner ruled the death “accidental,” and found no evidence of foul play. The decedent’s parents, as beneficiaries under their son’s life insurance plan, sued the insurer pursuant to ERISA seeking the $50,000 benefit under the plan’s AD&D benefits provision, which states: “We’ll pay the benefits described below if you suffer an irreversible covered loss due to an accident that occurs while you are insured. The loss must be a direct result of the accident, independent of disease or bodily infirmity.”

The insurer, Guardian Life Insurance Company of America (“Guardian”), argued that the overdose was not “an accident,” and that, even if it were, the plan’s exclusion for any loss caused “by your voluntary use of a controlled substance, unless: (1) it was prescribed for you by a doctor; and (2) it was used as prescribed” precluded coverage.

The District Court ruled in favor of Guardian. The District Court found that the death was not accidental, noting that the relevant definition of “accidental” was not the same as used by the medical examiner. Instead, the District Court ruled that, even if the decedent had a subjective expectation of surviving the usage of drugs, that expectation was objectively unreasonable, given the perils that mixing drugs presents. Given the decedent’s history with addiction and treatment, he would have been well aware of these dangers prior to consuming the drugs. Additionally, the District Court found that the decedent’s addiction was a disease, diagnosed as such by an expert witness, and that the death was not independent of disease under the plan.

Finally, the District Court held that, even if the death were accidental and independent of disease, the plan’s exclusion for losses caused by the voluntary use of a controlled substance barred coverage. The District Court again noted the decedent’s history of drug and alcohol abuse to hold that the decedent was likely aware of the dangers of mixing drugs, and yet nonetheless voluntarily did so. As such, the District Court found that Guardian did not owe a $50,000 AD&D benefit to the decedent’s parents. McNinch v. Guardian Life Ins. Co. of Am., 2022 WL 444133 (N.D. Ill. Feb. 14, 2022).