Death Benefit Decision on Illegal Immigrant Overturned

December 8, 2005 ( - The administrator of a life insurance plan should not have refused to pay benefits to the father of a beneficiary who lied about being an illegal Mexican immigrant when he was hired.

US Magistrate Judge Paul Zoss of the US District Court for the Northern District of Iowa ordered the plan to pay the father $15,000 in benefits despite Juan Alberto Chavez having fraudulently completing the plan’s enrollment forms.

The administrator’s decision was not supported by substantial evidence, but instead “was reached at the behest of the employer to avoid setting a ‘precedent’ ” among illegal workers, Zoss ruled.

According to the court, an individual named Juan Alberto Chavez enrolled in his employer’s life insurance plan in May 2003. Chavez listed his date of birth as September 30, 1980, and named “Elias Garcia” as his beneficiary. The court noted that Chavez identified Garcia as a “friend.”

In October 2003, Elias Garcia-Moreno, who claimed he was Chavez’s father and plan beneficiary, filed a claim for $15,000 in benefits from the plan’s administrator, Great-West Life and Annuity Insurance Co. Garcia-Moreno sent to Great-West a death certificate for someone named Orlando Garcia who was born on January 18, 1980, and died on June 19, 2003, after he hanged himself.

While conducting an investigation into whether Chavez and Orlando Garcia were the same person, Great-West contacted the employer who suggested Great-West deny the claim because it was “afraid it might set a precedent with workers when a family member dies, they will claim it was the employee, collect the insurance and move back to Mexico,” the court said.

Great-West denied Garcia-Moreno’s claim for benefits, noting that Chavez and Orlando Garcia had different birth dates and Social Security numbers. In addition, Great-West pointed out that the designation form had listed Elias Garcia as a “friend” rather than as Chavez’s father.

Reversing Great-West’s decision and ordering it to pay $15,000 in benefits to Garcia-Moreno, the court said the “only reasonable conclusion” was that Chavez and Orlando Garcia were the same person and that Orlando Garcia had used the information of a Juan Chavez to hide the fact that he was an illegal immigrant

The court also noted that after Great-West denied Garcia-Moreno’s claim, it conducted a search and found that a Juan Chavez with a birth date of September 30, 1980, was alive and living in California.

The case is Garcia-Moreno v. Great-West Life and Annuity Insurance Co., N.D. Iowa, No. C05-4017-PAZ, 12/1/05.