There is a general impression that federal employee benefits are great. Many employees jump at the chance to be a federal employee often because of the benefit packages available. However, some of those benefits such as Federal Employee Group Life Insurance (FEGLI) may be illusory (A/K/A “junk”). In fact, some might say this benefit is a waste of taxpayer dollars and a means to pad the pockets of insurers like MetLife. Survivors of deceased federal employees agree.

FEGLI claims are funded through the Employees' Life Insurance Fund, 5 U.S.C. § 8714, held at the United States Treasury, with amounts paid to the Fund under 5 U.S.C. §§ 8707 and 8708. The government subsidizes FEGLI, but employees pay 2/3 of the total cost for Basic coverage and 100% of the cost for Optional insurance. The act is known as FEGLIA. Usually, ERISA controls group benefits in the workplace. However, federal employees are exempt from ERISA, so they have FEGLIA. 

The plan terms in FEGLIA and ERISA plans are often identical, and the statutes are very similar.  You would think that plans and laws which are similar would be interpreted similarly. Not so however to the detriment of FEGLI participants. FEGLIA borrows from ERISA common law for some things, but as noted by the 11^th Circuit, not for everything.

A common problem provision in FEGLI and ERISA accidental death plans is an exclusion of the life benefit for any death where sickness contributed to the death. Even if it is not a significant contribution, any contribution is enough to not pay.  Thus, if you are a diabetic and you fall 25 feet to the pavement, if your diabetes contributes in some minor way to your death, your claim will be denied. That exclusion as noted by the 11^th Circuit can lead to “untenable results”. As far as I know, there are few perfect humans. Most people have some condition that can contribute in some way to an injury that causes death.

Under ERISA in the case Dixon v. Life Ins. Co. of N. Am., 389 F.3d 1179 (11th Cir. 2004), an insured died of heart failure immediately after a motor vehicle accident. His widow submitted a claim for accidental death benefits, but the insurance company refused to pay the claim contending that cardiovascular disease played a role in the death. Suit was filed but the district court ruled against the widow.

On appeal, the 11^th Circuit affirmed that decision but corrected the district court's approach on how to interpret policy language. The 11^th Circuit adopted the reasoning of the 4^th and the 9^th Circuits requiring that any pre-existing condition must "substantially contribute" to an accidental death to bar the claim. Any slight or small contribution would not suffice. That standard was adopted to prevent “untenable” - illusory or unfair results.

However, the 11^th Circuit in the recent case, Finney v. Metro. Life Ins. Co., No. 24-13140, 2026 LX 29491 (11th Cir. Jan. 26, 2026) rejected the reasoning in the Dixon case. It basically ruled that “any contribution” of a sickness toward a death is enough to exclude payment of benefits.  The saying "you take your plaintiffs as you find them", which is often used with tort claims, is not applicable with an accidental death claim under FEGLIA. There is a real risk that nearly every claim except the most catastrophic instant deaths can be denied.

In the Finney case, Ms. Selena Anderson was exiting a motor vehicle and fell in the parking lot. She suffered multiple fractures to her right leg below the knee. She was taken to the hospital, but died 6 days later. Ms. Anderson, who had interstitial lung disease previously, died from a pulmonary embolism because of blood clots from the fractures. MedlinePlus explains a pulmonary embolism is “a sudden blockage in a lung artery. It usually happens when a blood clot breaks loose and travels through the bloodstream to the lungs”.  In this case, blood clots from the fractures traveled to Ms. Anderson's lungs and killed her. “But for” the fractures, she would not have died.

Ms. Finney filed a claim for the death of her mother, Ms. Anderson. MetLife denied the claim as excluded because interstitial lung disease contributed to Ms. Anderson's death. While it is true that interstitial lung disease can increase the risk of blood clots (up to 34%), it also remains true that interstitial lung disease did not cause Ms. Anderson to fall, nor did she die from the disease. Ms. Finney filed suit and the district court ruled against Ms. Finney.

The district court, while agreeing that ERISA's common law arbitrary and capricious standard of review applied, when it came to applying ERISA's common law interpretation of this plan language under Dixon, that was ignored.  Why? Because FEGLIA is a different statute. How is FEGLIA different? It just is. Does this not produce an untenable result, the same concern as noted in Dixon? That does not matter. So federal employees don't deserve the same protection as private employees? I guess not.

The court ruled “If these [ERISA] cases controlled, the court would agree with Finney that her mother's preexisting health conditions must have substantially contributed to her death, rather than played any part in her death. But … these cases applied federal common law to ERISA … . None looked at FEGLIA, the controlling statute here.” So FEGLIA is a different acronym than ERISA, but with similar rules and plans, and that makes it fine to produce harsh, untenable, and unfair results? 

On appeal the 11^th Circuit concluded, “The physical illness exclusion in Anderson's insurance policy may seem harsh. But we cannot undo the bargain underlying that policy by rewriting the contract to say what it does not. Because MetLife's denial decision was not arbitrary and capricious, we AFFIRM.” 

FEGLI participants beware. The coverage you think you have may just be an illusion. Based on the cause of most accidental deaths (falls and motor vehicle accidents) you likely have no coverage at all.