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Allen v. South Carolina Public Employee Benefit Authority

Supreme Court of South Carolina

March 4, 2015

Jeffrey D. Allen, on behalf of Jane Doe, Appellant,
v.
South Carolina Public Employee Benefit Authority, Employee Insurance Program, Respondents

Heard: December 5, 2013.

Appeal from the Administrative Law Court. Appellate Case No. 2012-212988. Shirley C. Robinson, Administrative Law Judge.

Terry E. Richardson, Jr., of Richardson, Patrick, Westbrook & Brickman, LLC, of Barnwell, and John A. Massalon, of Wills Massalon & Allen, LLC, of Charleston, for Appellant.

Theodore D. Willard, Jr., of Montgomery Willard, LLC, and Stephen Van Camp, both of Columbia, for Respondent.

CHIEF JUSTICE TOAL. BEATTY, KITTREDGE and HEARN, JJ., concur. PLEICONES, J., dissenting in a separate opinion.

OPINION

Page 667

[411 S.C. 613] TOAL, CHIEF JUSTICE.

Jeffrey D. Allen (Appellant), on behalf of his daughter, appeals the Administrative Law Court's (ALC) order affirming the Appeals Committee of the South Carolina Budget and Control Board Employee Insurance Program's (EIP Appeals Committee) decision to deny Appellant's insurance claim for his daughter's diabetes educational training session. We reverse.

Facts/Procedural Background

Appellant, a South Carolina public school district employee, is insured under the Group Health Benefits Plan of the Employees of the State of South Carolina, the public school districts, and participating entities (the State Health Plan).[1] The State Health Plan is

Page 668

offered through EIP.[2]

[411 S.C. 614] In November 2007, Appellant's daughter was diagnosed with Type 1 diabetes at the age of two years old.[3] Appellant's daughter's doctor prescribed her an insulin pump to regulate her insulin levels. In August 2008--two weeks prior to attaching the pump to Appellant's daughter's body--her family and two school nurses attended a two-hour training session at the Medical University of South Carolina, during which a diabetic educator taught the caregivers how to operate the insulin pump.

Appellant submitted a $560 claim for the educational training session.[4] Blue Cross Blue Shield of South Carolina (Blue Cross) denied the claim on the grounds that the " benefit plan does not cover education and/or training for this condition." [5] Appellant appealed the denial through Blue Cross's appeals process. Ultimately, Blue Cross's Appeals Review Committee upheld the denial of benefits on the basis that diabetes educational training is excluded under the State Health Plan, and that section 38-71-46 of the South Carolina Code,[6] which mandates coverage for diabetes educational training in certain health insurance policies, does not apply to the State Health Plan.

Appellant appealed to the EIP Appeals Committee. The EIP Appeals Committee denied Appellant's claim, concluding that Appellant's State Health Plan policy expressly excluded diabetes educational training and that section 38-71-46 did not apply to the State Health Plan.

Appellant appealed to the ALC. In the ALC, Appellant argued that diabetes educational training is covered under the State Health Plan,[7] and in the alternative, the State Health [411 S.C. 615] Plan should be reformed to comply with section 38-71-46. Additionally, Appellant requested that the ALC allow the matter to proceed as a class action lawsuit. On August 13, 2012, the ALC issued an order affirming the EIP Appeals Committee's decision that the terms of the State Health Plan do not cover diabetes educational training because the State Health Plan does not qualify as " health insurance coverage" as defined by the South Carolina Code.[8] In light of the ALC's disposition of the case, the ALC declined to address whether it had the authority to permit the case to proceed as a class action.

Appellant appealed the ALC's order to the court of appeals. This Court certified the appeal pursuant to Rule 204(b), SCACR.

Issues

I. Whether the ALC erred in concluding that section 38-71-46 does not apply to the State Health Plan?
II. Whether the ALC erred in failing to address the availability of class action relief?

Standard of Review

A party who has exhausted all administrative remedies available within an agency and who is aggrieved by an ALC's final decision is entitled to judicial review.

Page 669

S.C. Code Ann. § 1-23-380 (Supp. 2012). In an appeal from a decision by the ALC, the Administrative Procedures Act (APA) provides the appropriate standard of review. See S.C. Code Ann. ยง 1-23-610(B) (Supp. 2012). Under ...


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