Appeals court rules against Boeing, Aetna in benefits dispute

By John Revak | Jun 1, 2017

SAN FRANCISCO — The U.S. Court of Appeals for the Ninth Circuit recently overturned a district court ruling that upheld insurance company Aetna’s decision to cancel a former Boeing employee's long-term disability benefits because she allegedly met the criteria for the plan’s discretionary “mental health exception.”

Talana Orzechowski, a former Boeing employee, filed the suit against Boeing and its insurer, Aetna, after the insurer cancelled her benefits in 2011. 

In 2004, Orzechowski was diagnosed with fibromyalgia and chronic fatigue. By 2009, her condition had evolved, and she began experiencing issues with memory loss and a host of other ailments. She had ceased working at this time and filed for short-term disability benefits.

Aetna approved her application for short-term disability benefits for a maximum of 26 weeks. At this time, Aetna also approved long-term disability benefits that would start when the short-term benefits expired.

In July 2011, before the long-term benefits activated, Aetna canceled the plaintiff’s plan, claiming that “there was insufficient evidence to support [her] continued disability for the period of July 29, 2011 and beyond based upon any physical conditions,” according to court documents. Aetna cited a discretionary clause as the authority allowing them to terminate the contract.

Though California voided these kinds of discretionary clauses in 2012, the plaintiff’s insurance plan was written in 2011, prompting the district court to rule that the new rules did not apply retroactively.

The appeals court, however, held that because the plan was renewed in 2012, the new rules applied and the discretionary clause was no longer valid.

“Boeing’s policy here ‘renewed’ when it continued in force beyond its anniversary date of Jan. 1, 2012,” the appeals court said in its ruling.

The appeals court sent the case back to the district court for further proceedings.

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Aetna Inc. The Boeing Company U.S. Court of Appeals for the Ninth Circuit

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