United States District Court, D. South Carolina
ORDER AND OPINION
RICHARD MARK GERGEL, UNITED STATES DISTRICT COURT JUDGE.
matter is before the Court for review of Defendant Nucor
Corporation Group Health Plan's decision to deny a claim
for benefits under an insurance policy governed by the
Employee Retirement Income Security Act of 1974, 29 U.S.C.
§§ 1001-1461 ("ERISA"). The parties filed
a joint stipulation (Dkt. No. 27) and cross-memoranda (Dkt.
Nos. 26, 28) in support of judgment pursuant to the
court's Specialized Case Management Order for ERISA
cases. The parties agree that the court may dispose of this
matter consistent with the joint stipulation and memoranda.
(Dkt. No. 27.) For the reasons set forth below, the Court
affirms the denial of benefits.
Sunday, December 7, 2014, Leon T. Jackson was injured in a
motorcycle accident and admitted and treated at Palmetto
Health Richland from December 7, 2014 through December 20,
2014. At the time of the accident, Mr. Jackson was employed
by Nucor Corporation, which is the administrator and sole
fiduciary of their self-funded health plan, Defendant Nucor
Corporation Group Health Plan ("Group Health
Plan"). (Dkt. No. 27-2 at 186, 196 - 197.) Mr. Jackson
was a participant in the Group Health Plan. In South
Carolina, Nucor contracted with Blue Cross Blue Shield of
South Carolina ("BCBSSC") to manage health care and
claims administration services for the plan. (Id. at
146 - 147.)
at the hospital, Mr. Jackson's blood was collected and
tested for alcohol. The test showed that Mr. Jackson had an
elevated ethyl alcohol level which, if accurate, was above
legal limits. Palmetto Health submitted information to BCBSSC
to request coverage for acute care services. In a letter
dated December 18, 2018, BCBSSC denied coverage for the
requested services because the Health Plan had a policy
exclusion for intoxication. Mr. Jackson executed an
assignment of benefits and designated Plaintiff Palmetto
Health as his authorized representative under ERISA. (Dkt.
No. 27-1 at 8, 20.) After Mr. Jackson was discharged, a claim
for benefits was submitted to BCBSSC, which was denied based
on the same exclusion in the plan. On October 21, 2015, the
denial of benefits was upheld on review.
the denial, it was discovered that BCBSSC had applied the
incorrect plan documents to Palmetto Health's claim for
coverage. The operative plan, instead, was the Nucor
Corporation Health Plan with an effective date of January 1,
2014,  ("2014 Plan") which did not
include any policy exclusion for intoxication. (Dkt. No.
27-2.) The 2014 Plan, however, included the following
relevant language. First, the 2014 Plan provided
discretionary authority to Nucor:
The Group Health Plan Administrator is the sole
fiduciary of the Group Health Plan, and exercises
all discretionary authority and control over the
administration of the Group Health Plan and the
management and disposition of Group Health Plan
assets. The Group Health Plan Administrator shall
have the sole discretionary authority to determine
eligibility for Group Health Plan benefits or to
construe the term of the Group Health Plan.
No. 27-2 at 175.) The Plan further stated that it would
"not provide benefits" for:
Any condition, disability or expense sustained as a
result of being engaged in: an illegal occupation,
commission or attempted commission of an assault or other
illegal act, intentional or accidental atomic explosion
or other release of nuclear energy, whether in peacetime or
wartime, participation in a civil revolution or a riot, duty
as a member of the armed forces of any state or country or a
war or act of war which is declared or undeclared.
at 157) (emphasis added).
November 13, 2017, Palmetto Health renewed their request for
coverage. In support of the request, Palmetto Health argued
that the collision was not the result of an "illegal
act" as the police report and subsequent blood test did
not sufficiently confirm that Mr. Jackson was driving under
the influence. Palmetto Health included as evidence: an
affidavit from Mr. Jackson; a review of a police report and
hospital records; an accident reconstruction report prepared
by an individual hired by Mr. Jackson which found that he had
not been impaired, and; a payment from the insurance carrier
of the other driver.
December 18, 2017, BCBSSC denied coverage under the 2014
Plan, relying on the "other illegal act" exclusion
since BSBSSC determined that Mr. Jackson had been driving
under the influence. In reaching its conclusion, BCBSSC
relied on: Palmetto Health's request for coverage; the
prior coverage determinations; a traffic collision report
prepared by a police officer; a test from the hospital
showing an elevated alcohol level; an affidavit from Mr.
Jackson stating that he had been charged with driving under
the influence but the charge had since been dismissed and
expunged; the accident reconstruction; the payment from the
other driver's insurance; the 2014 Plan; the
administrative record from the prior adverse benefits
determination; the affidavit of the medical opinion of Dr.
William Harms, BCBSSC Vice President of Medical Affairs, and;
an article on the difference between blood drawn for legal
and medical purposes. The letter denying coverage discussed
Palmetto Health's arguments but found that the evidence
indicated that Mr. Jackson had been driving under the
influence, an illegal act, which resulted in his injuries. On
February 12, 2018, Palmetto Health requested a review of the
determination. BCBSSC upheld their determination to deny
coverage, relying on the same administrative record and
adding Palmetto Health's request for review and an
affidavit of an additional doctor working for BCBSSC, Dr.
Health filed a Complaint to review the denial of benefits
under ERISA, 29 U.S.C. § 1132(a)(1)(B). (Dkt. No. 1.)
The Parties filed cross-motions for judgment. (Dkt. Nos. 26,