Greenville Hosp. System v. PROVIDENT LIFE, 2820.
| Decision Date | 30 March 1998 |
| Docket Number | No. 2820.,2820. |
| Citation | 330 S.C. 436,499 S.E.2d 232 |
| Court | South Carolina Court of Appeals |
| Parties | GREENVILLE HOSPITAL SYSTEM, Respondent, v. PROVIDENT LIFE & ACCIDENT INSURANCE COMPANY, Trustmark Insurance Company (Mutual), Foothills Staffing & Development, Inc., Health Care Savings, Inc., and Cooper Machinery, Incorporated, Defendants, of whom Trustmark Insurance Company (Mutual), is Appellant, and of whom Cooper Machinery Incorporated is Respondent. |
Timothy W. Bouch, Stephen P. Groves, and Stephen L. Brown, of Young, Clement, Rivers & Tisdale, Charleston, for appellant.
Annette Roney, of The Laddaga Law Firm, Charleston, and H. Michael Spivey, of Spivey & Ingles, Mauldin, for respondent. HOWELL, Chief Judge:
Greenville Hospital Systems (GHS) brought this action to recover the hospital bills incurred by Roger Dale Morgan. The trial court granted GHS partial summary judgment against Trustmark Insurance Company. Trustmark appeals, and we affirm.
I.
Morgan was hired by Cooper Machinery in fall of 1991. On April 1, 1992, Cooper Machinery entered into an agreement with Foothills Staffing and Development Incorporated, whereby Cooper Machinery would lease its employees from Foothills. Pursuant to this agreement, Foothills was primarily responsible for procuring and providing employee benefits. On or about June 1, 1993, Foothill merged with Hazar, Incorporated.
Hazar had a policy of insurance through Provident Life and Accident Insurance Company, which covered Morgan. Provident's group insurance policy became effective July 1, 1992, and was amended several times. On October 31, 1993, Provident terminated its policy with Hazar because Hazar failed to pay the delinquent balance on premiums owed under the contract.1 According to the policy, Morgan's coverage ceased on the same day Provident terminated the policy.
By letter dated November 29, 1993, Julie Ranks, a benefits administrator with Foothills, informed Foothills' clients that starting on December 1, 1993 all of the accounts currently under Provident would be transferred to a new carrier, Trustmark. As stated in Ranks's letter, the group insurance contract between Hazar and Trustmark became effective on December 1, 1993, at 12:01 a.m. standard time.
Prior to the activation of the Hazar and Trustmark policy, on November 30, 1993, Morgan was admitted to GHS. GHS treated Morgan until February 4, 1994, with the cost totaling $263,033.08. During his admission to GHS, Morgan signed an assignment of benefits to GHS.
On February 25, 1994, Cooper Machinery sent a letter to Foothills complaining about problems employees were having with their health insurance coverage. By letter dated February 14, 1994, Brian Main of Hazar wrote a letter detailing the history of Hazar's insurance coverage. Main explained that Provident offered to provide coverage through November 30, 1993, if Hazar paid the November premium plus terminal funding. On the other hand, Hazar could simply cancel the policy on October 31, 1993. Hazar chose the October 31, 1993 cancellation date. According to Main, Hazar was self-insured from November 1, 1993 through November 30, 1993.
In an effort to sort out the confusion about which insurance coverage was in effect, counsel for GHS sent letters to Trustmark, Provident, and Hazar seeking information about insurance coverage and requesting copies of their plans. Provident responded that its contract with Hazar terminated on October 31, 1993. In a letter to GHS's attorney, Karen Kalcic, a Trustmark representative, claimed Trustmark was not responsible for Morgan's medical bills until after Morgan was discharged from the hospital. Kalcic stated, "It was my understanding that these charges were to be the responsibility of his employer, Hazar, as there was a lapse of coverage between the termination with the prior carrier and the beginning of their coverage with Trustmark."
GHS filed suit against Provident, Trustmark, Health Care Savings,2 Foothills, Cooper Machinery, and Morgan to collect Morgan's hospital bill. After the trial court removed Morgan as a defendant, all of the parties moved for summary judgment. The trial court granted Health Care Savings summary judgment on all claims. It also granted Provident summary judgment, finding the effective termination date of Provident's policy was October 31, 1993. Next, the trial court denied GHS's motion against Cooper Machinery and Cooper Machinery's motion against GHS. Finally, the trial court held Trustmark liable to GHS as a succeeding carrier under S.C.Code Ann. § 38-71-760(m) (1989 & Supp.1997)3 for 85% of Morgan's hospital bills from December 1, 1993 to February 4, 1994. Trustmark appeals.
II.
Trustmark argues that the trial court erred in granting summary judgment without deciding whether S.C.Code Ann. § 38-71-760(i) (1989 & Supp.1997) forced Provident to extend benefits to Morgan. In addition, Trustmark complains that the trial court incorrectly granted summary judgment without first determining whether Hazar had a policy of self insurance effective when Morgan checked into GHS. We find the trial court properly granted summary judgment.
A.
Trustmark contends that the trial court should not have determined that it was responsible without first finding whether Provident was liable under section 38-71-760(i). Section 38-71-760(i) states:
In the case of hospital or medical expense coverages other than dental expense, a reasonable extension of benefits or accrued liability provision is required. The provision is considered reasonable if it provides an extension of at least twelve months under major medical and comprehensive medical type coverages and under other types of hospital or medical expense coverages provides either an extension of at least ninety days or an accrued liability for expenses incurred during a period of disability or during a period of at least ninety days starting with a specific event which occurred while coverage was in force such as an accident.
Id. Trustmark reasons that if Provident was legally obligated to provide extended benefits, then Provident should be solely liable for Morgan's bill.
For section 38-71-760(i) to apply, however, the claimant must be injured or disabled at the time the prior plan terminates. Id. The trial court ruled that Provident's plan terminated on October 31, 1993, several weeks before Morgan checked into GHS. Because Provident's October 31, 1993 termination date is the unappealed law of the case, Provident could not be liable under section 38-71-760(i).
B.
Before applying section 38-71-760(m) to mandate coverage, Trustmark argues that the trial court should have determined whether Hazar had an intervening self-insurance plan. Section 38-71-760(m) creates a duty for "succeeding carriers" to continue coverage, including benefit extensions, for persons validly covered under a prior plan. S.C.Code Ann. § 38-71-760(m) (1989 & Supp.1997). "A replacement carrier is considered to be a succeeding carrier within the meaning of this section if the effective date of the coverage provided by it is sixty-two days or less after the date of termination of coverage of the prior carrier." S.C.Code Ann. § 38-71-760(k) (1989 & Supp.1997). According to Trustmark, it would not have been a succeeding carrier under section 38-71-760(m) if Hazar was self-insured between the termination of Provident's policy and the beginning of Trustmark's policy.
When construing a statute, a court must seek to ascertain and effectuate legislative intent. The cardinal rule of statutory construction is that words used in a statute must be given their plain and ordinary meaning without resort to subtle or forced construction to limit or expand the operation of the statute. The language must be read in a sense which harmonizes with its subject matter and accords with its general purpose.
Koenig v. South Carolina Dept. of Public Safety, 325 S.C. 400, 403-04, 480 S.E.2d 98, 99 (Ct.App.1996) (citations omitted).
To qualify as a succeeding carrier, Trustmark merely had to be a carrier that replaces a prior carrier within sixty-two days. See S.C.Code Ann. § 38-71-760(k) (1989 & Supp.1997). Regardless of whether Hazar was an intervening self-insured, Hazar could not have been a prior carrier. The plain language of S.C.Code Ann. § 38-71-760(l) (1989 & Supp.1997) recognizes a difference between carriers and self-insurers.4 By phrasing the definition of succeeding insurer in terms of a carrier that follows another carrier, Hazar's status as a possible self-insurer has no effect on Trustmark being a succeeding carrier.
Our interpretation is consistent with the legislative intent behind section 38-71-760(m). As Trustmark admitted, "The Legislature clearly intended that when one group policy is passed from carrier to carrier, a certain minimum level of benefits should be maintained." We simply do not think that an intervening self-insurer in any way affects whether a replacement carrier constitutes a "succeeding carrier." Thus, we do not believe that the trial court erred in not deciding whether Hazar was a self-insurer prior to ruling that section 38-71-760(m) rendered Trustmark liable as a succeeding carrier.
III.
Trustmark next argues that section 38-71-760 is preempted by the Employee Retirement Income Security Act of 1974 (ERISA).5 We disagree.
Under ERISA, all state laws that "relate to" an employee benefit plan are preempted. 29 U.S.C. § 1144(a) (1985). The ERISA savings clause, however, prescribes that ERISA shall not "be construed to exempt or relieve any person from any law of any State which regulates insurance." 29 U.S.C. § 1144(b)(2)(A) (1985). To determine if a state law regulates insurance, and is thereby saved from ERISA preemption, a court should examine whether the state law regulates insurance from a common sense perspective, whether the application of the savings clause to the particular state law comports...
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