Insurance Claims And Issues

COBRA Ending for Your Clients as the Great Recession Continues.

   More potentially useful information on COBRA comes from "Patient Money/Steps to Take Before Cobra Subsidy Ends" by Walecia Konrad (New York Times Online, Saturday, December 12,  2009).

   Sadly, inevitably, assistance in paying the very high COBRA Premiums is coming to an end for many people, which means that their Health Insurance Coverage Premiums will rise like a rocket if things remain as they are, let alone if things get worse.  See  Patrick McGeehan, "Unemployed Facing End of Subsidy for Insurance Bought Through Cobra" p. A39, col. 1 (New York Times Nat'l ed., Thursday, December 17, 2009).

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No ERISA and No COBRA, But No Bad Faith Appeal.

   In a recent appeal from a ruling of the United States District Court for the Southern District of Florida, the Eleventh Circuit Court of Appeals was confronted with Issues, among others, of ERISA, COBRA, and whether there was Bad Faith in the appeal in Download Harris v. United Auto Insurance Group, Inc., a Florida Corporation (11th Cir. Opinion Filed August 18, 2009).

    For several reasons not addressed by the District Judge, the Eleventh Circuit affirmed an Order of Dismissal With Prejudice under Federal Rule 12(b)(6).  The Plaintiff-Policyholder was an in-house Counsel for United Automobile Insurance Group, Inc.  The Case may be made a bit confusing because the Employer is an Insurance Company, but not the Plaintiff's former Health Insurance Company.  When the Plaintiff was terminated from employment, he signed up for continuing Health Insurance Coverage under COBRA.

    The Plaintiff dutifully paid Premiums until February, 2008.  The Premium payment was due to be postmarked by February 11, 2008.  The Premium payment for that month was paid, but unfortunately "the envelope containing the payment was not post-marked until February 12."  Download Harris v. United Auto Insurance Group, Inc., a Florida Corporation (11th Cir. Opinion Filed August 18, 2009).

    The Plaintiff argued, among other things, that his Employer should be held to be bound by a Federal Regulation which, he further argued, would provide an additional timeframe for payment of Premiums.  The Eleventh Circuit held that the particular Federal Regulation "applies only to those plans that are fully-funded," and since Plaintiff's Employer's plan was "self-funding" and not "fully-funded," the Regulation did not apply, there was no extended timeframe for paying Premiums, and "UAIG was within its rights in terminating Harris's coverage."  Download Harris v. United Auto Insurance Group, Inc., a Florida Corporation (11th Cir. Opinion Filed August 18, 2009).

    Not content with victory on the merits, the Appellee Employer did something rarely done in Appeals involving Insurance Companies, particularly in Appeals originating in Florida:  It requested fees from the Insured, arguing "that Harris acted in bad faith by filing this appeal ...."   Download Harris v. United Auto Insurance Group, Inc., a Florida Corporation (11th Cir. Opinion Filed August 18, 2009).  [Emphasis added.]  As might have been anticipated before such a motion was even filed, the Eleventh Circuit refused to assess attorney's fees against Mr. Harris in addition to affirming the Order of Dismissal With Prejudice of Mr. Harris's Complaint:

    Considering these factors, an award of fees is not warranted in this case.  First, the district court made no finding that any party acted in bad faith, and the record on appeal does not establish any bad faith.

Download Harris v. United Auto Insurance Group, Inc., a Florida Corporation (11th Cir. Opinion Filed August 18, 2009).  [Emphasis added.]

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