QUESTION ONE:

The Sunshine Cab Company employs Anthony “Tony” Banta as a full-time cab driver. Tony recently married his long-time girlfriend, Vicki. Weeks after the wedding, Vicki gave birth to Anthony, Jr.

Anthony, Jr. was born with a cleft palate. Tony previously elected family coverage under the Sunshine Cab Company’s health care plan. Before scheduling surgery to repair Anthony, Jr.’s cleft palate, Tony submitted a written request for approval of the procedure to Louie De Palma, Head Dispatcher and the Plan Administrator for the Sunshine Cab Company. Pursuant to Sunshine Cab Company’s health care plan, “surgery to correct a deformity or birth defect for psychological reasons, where there is no functional impairment, is not covered.”

Louie denied Tony’s request, pursuant to the terms of the health care plan, calling the procedure “cosmetic.” Tony asked Louie to reconsider his decision. Tony even submitted letters from Anthony, Jr.’s treating physician and a second letter from Sanjay Gupta, MD, CNN contributor and an expert in the field of cleft palates, stating that the surgery was “medically necessary.” Louie refused to accept the letters, stating that his decision was “final and binding.” 

Answer each of the following short-answer questions in 50 words or less. While some questions may be amenable to a one-word answer, to score the points, explain your answers. 

•   

Did Louie violate any of his obligations to the Sunshine Cab Company or to Tony?  If so, explain.

•    Did Sunshine honor its obligations to provide reasonable claims and appeals procedures for its benefit plans? 

•    Is there anything else that Tony is required to do before filing a claim in court?

•    What legal standard will be applied to review Sunshine Cab Company’s denial of Tony’s claim for benefits?

•    What is the court likely to conclude? 

Under Title I of ERISA (29 U.S.C.S. §§ 1001-1461 (2011)), Louie has violated his obligations to both Sunshine Cab Company and Louie.  Under the ERISA language, employers are required to inform employees about their benefits, deliver promised benefits, provide claims and appeals procedures, manage plans wisely and in employees’ interests, and refrain from interfering with or retaliating against beneficiaries.    

  

Louie failed to inform Tony regarding his benefits, as well as, failing to even attempt to review his appeal on his said claim. 

The exclusion of coverage for treatment of cleft palate is not classified as a preexisting condition exclusion because the exclusion applies regardless of when the condition arose relative to the effective date of coverage. The plan provision, therefore, is not prohibited. (But see 45 CFR 147.150, which may require coverage of cleft palate as an essential health benefit for health insurance coverage in the individual or small group market).  (ii) Conclusion.  In this Example 8, the exclusion of coverage for treatment of cleft palate for individuals who have not been covered under the plan from the date of birth operates to exclude benefits in relation to a condition based on the fact that the condition was present before the effective date of coverage. The plan provision, therefore, is prohibited.

 

QUESTION TWO

Fearing that Anthony, Jr.’s conditions will result in skyrocketing healthcare premiums, the owner of the Sunshine Cab Company and his right-hand man, Louie De Palma, Head Dispatcher, concocted a plan to get Tony fired.

Knowing that Tony has a short temper and that he is sensitive about his unsuccessful boxing career, Louie referred to Tony as a “washed up boxer.” In response, Tony punched Louie. Not surprisingly given Tony’s level of success in the ring, Louie was not affected by Tony’s punch. Louie nevertheless discharged Tony for workplace violence. Immediately following the termination, Louie canceled Tony’s health insurance. 

In 250 words or less, analyze the fact pattern using the IRAC formula.

•    First, identify the narrow Issue(s) identified in the fact pattern.

•    Second, identify the Rule or Test the courts use to analyze such issues.

To receive points for this part of the question, you must reference the case in which the rule/test was identified using a complete case citation.

•    Third, identify the court’s likely Application or Analysis of the salient/most important facts to the rule/test.

•    Finally, using the court’s analysis, identify the Conclusion that you anticipate the court would reach based on the facts presented in the fact pattern.

Assume that Sunshine Cab Company has employed more than 20 employees for a number of years and continues to do so).

QUESTION THREE

The Sunshine Cab Company did not issue COBRA notice to Tony following the termination of his employment. In 250 words or less, analyze the fact pattern using the IRAC formula.

•    First, identify the narrow Issue(s) identified in the fact pattern.•    Second, identify the Rule or Test the courts use to analyze such issues.

•    Third, identify the court’s likely Application or Analysis of the salient/most important facts to the rule/test.

•    Finally, using the court’s analysis, identify the Conclusion that you anticipate the court would reach based on the facts presented in the fact pattern.