United States District Court, Western District; Docket No. G88-557 CA6;
Judge Richard A. Enslen; Unpublished
Official Federal Reporter Citation: Not Applicable; Link to Opinion
In this written Opinion, Judge Enslen addressed a coordination of benefits issue in the context of an "ERISA" plan where the plan totally excluded coverage for automobile accident injuries.
In this case, Nationwide sought recovery of $20,930 of medical expenses it paid to its insured as a result of automobile accident related injuries. Nationwide had a coordinated benefits policy. The injured party was insured under an employee medical benefit plan pursuant to the Employee-Retirement Income Security Act (ERISA).
The ERISA plan providing medical coverage to the injured party, had an exclusionary clause which provides that "expenses are not covered and no benefits shall be paid on account of medical charges for services incurred as a result of a motor vehicle accident."
The ERISA plan did not dispute that the Federal Kemper, supra, decision applied to ERISA employee welfare benefit plans. However, it contended that its plan totally excluded coverage for automobile accident related expenses, and therefore, the Federal Kemper rule did not mandate that it provide coverage for the insured party's expenses.
Judge Enslen distinguished the Federal Kemper, supra, decision as a case which involved a health insurance policy containing an "excess coverage" clause. Here, the ERISA plan involved did not provide any coverage for injuries sustained in automobile accidents. The plan does not contain a coordination of benefits clause, it contains an outright exclusion of coverage.
Judge Enslen rejected the argument that the exclusionary clause was void as a matter of "public policy" because it subverted the Federal Kemper holding. Judge Enslen held that Federal Kemper, supra, did not require health insurance plans to offer coverage for automobile accident related injuries. Rather, it held only that, where such coverage existed, it was primary to the coverage available under no-fault insurance policies.
Similarly, Judge Enslen held that federal law does not require ERISA plans to provide coverage for automobile accident injuries. Therefore, Judge Enslen held that the ERISA plan was not required to provide benefits in this case.
[Editor's Note: The holding in this case is identical to the holding in Transamerica v Peerless (Item No. 1194).]