Lawsuit Over FEGLIA Benefits Dismissed From Federal Court Over Lack of Subject Matter Jurisdiction

Last month, the Sixth Circuit Court of Appeals dismissed a case pertaining to the Federal Employee’s Group Life Insurance Act (FEGLIA) for lack of subject matter jurisdiction. The FEGLIA is the largest group life insurance program in the world, covering over 4 million federal employees and retirees, operated by the Office of Personal Management (OPM).

In Miller v. Bruenger, 949 F.3d 986 (6th Cir. 2020), a couple was issued a divorce, and pursuant to their property settlement agreement, the surviving spouse was to remain the beneficiary of the decedent’s life insurance policy, and it was included in the court order. FEGLIA requires that the court order be sent to OPM or the employing agency prior to death, and in this case, it was not. Upon the death of the policy holder the death benefit was paid to his only child, and the former spouse made a claim in state court. By agreement of the parties, the claim was dismissed. However, the daughter then filed an action for declaratory relief in federal court, seeking a declaration that she is the rightful owner of the death benefit.

The case was dismissed for lack of subject matter jurisdiction in the federal district court, and the Appeals Court affirmed, holding that no federal cause of action existed to allow for the enforcement of a marital settlement agreement in federal court regarding FEGLIA death benefits. According to the Court, FEGLIA does not contain an express cause of action for one private party to sue another private party over death benefits governed by FEGLIA, only suits against the federal government are expressly authorized.

See Lawsuit Over FEGLIA Benefits Dismissed From Federal Court Over Lack of Subject Matter Jurisdiction, Probate Stars, March 10, 2020.