• Estate of John Cecil Spinner, Deceased v. Anthem Health Plans of Virginia, et al. Civil No. 6:07CV00050 (W.D. Va. Dec. 18, 2008)
  • December 13, 2009 | Authors: Arthur N. Lerner; Bruce O. Tavel
  • Law Firm: Crowell & Moring LLP - Washington Office
  • On December 18, 2008, the United States District Court for the Western District of Virginia held that a health plan was not required to pay medical fees in excess of $1 million for a plan participant who neglected to switch to individual coverage or continued group benefits before his benefits were discontinued. Plaintiff, the estate of a brain hemorrhage victim, sued the health plan and the deceased’s former employer for wrongful denial of benefits, equitable estoppel and ERISA violations as well as other claims. The Court granted Defendants’ motion to dismiss all claims.

    Before ending his coverage, the deceased’s former employer wrote the deceased’s wife explaining that he was no longer entitled to coverage by his plan or COBRA benefits and that she could seek to have her husband added to her own insurance plan or to take out an individual plan on his behalf. The health plan also sent the wife a Summary Plan Description providing similar options for continuing coverage. The deceased did not switch to his wife’s plan, individual coverage or seek a 90-day extension under state law.

    The District Court held that COBRA, ERISA and Virginia law did not require the health plan to give the deceased or his wife notice of other insurance options upon termination of his plan beyond the information already provided. The deceased’s former employer was not subject to COBRA because the company employed fewer than 20 workers. The Court rejected Plaintiff’s breach of fiduciary duty claims under ERISA because it was an attempt to recover benefits for an individual beneficiary rather than for the plan as a whole as prescribed by the statute. Additional ERISA claims were dismissed because there was no indication that the health plan misrepresented or omitted material information or that the deceased’s wife relied upon any misrepresentation. The Court speculated that the letter should have induced the wife or another representative to contact the insurer or former employer to explore coverage options, rather than do nothing.