Opinion ID: 2635029
Heading Depth: 3
Heading Rank: 2

Heading: Federal and State Law Prohibit Wasatch Crest from Terminating Coverage Because Hayden Became Covered by Medicaid

Text: ¶ 17 Both federal and state law evidence a clear policy of prohibiting insurance companies from shifting their obligation for medical expenses to the taxpayer-funded Medicaid program. ERISA, as amended by COBRA, provides that COBRA coverage cannot be limited by a plan beneficiary's eligibility for or participation in Medicaid: A group health plan shall provide that, in enrolling an individual as a participant or beneficiary or in determining or making any payments for benefits of an individual as a participant or beneficiary, the fact that the individual is eligible for or is provided medical assistance under a State plan for medical assistance approved under title XIX of the Social Security Act[ [1] ] ... will not be taken into account. 29 U.S.C. § 1169(b)(2) (2008). ¶ 18 ERISA generally preempts state law. See 29 U.S.C. § 1144(a)(2008). An exception exists for state laws created to aid in recovering state Medicaid funds from employee welfare benefit plans. Id. § 1144(b)(8)(B). Therefore, Utah employee benefit plans must comply with Utah Code section 26-19-9 which prohibits employer sponsored health insurance plans from excluding from coverage health care expenses that are also eligible for coverage under Medicaid: As allowed pursuant to 29 U.S.C. Section 1144, an employee benefit plan may not include any provision that has the effect of limiting or excluding coverage or payment for any health care for an individual who would otherwise be covered or entitled to benefits or services under the terms of the employee benefit plan based on the fact that the individual is eligible for or is provided services under the state plan. Utah Code Ann. § 26-19-9 (2007). ¶ 19 Appellees argue that the Wasatch Crest plan complies with the Utah statute because it specifies in exclusion 17 that services covered by Medicaid are not excluded. However, this argument fails because regardless of whether the Wasatch Crest plan nominally complies, if exclusion 4 precludes coverage for any expenses covered by a government program, it has the effect of limiting or excluding coverage or payment for any health care for an individual who would otherwise be covered or entitled to benefits or services under the terms of the... plan. Id. ¶ 20 In order to interpret the Wasatch Crest plan in conformity with the relevant federal and state statutes, we read exclusions 4 and 17 to operate in such a manner that they do not preclude coverage for medical expenses which are also covered by Medicaid. Indeed, we find additional justification for this reading in the Wasatch Crest plan itself, which states, If any provision of this Policy is contrary to any law to which it is subject, such provision is hereby amended to conform thereto. Therefore, we hold that the terms of the Wasatch Crest plan did not operate to terminate Hayden's coverage as a matter of law when Hayden became eligible for Medicaid coverage.