Opinion ID: 1700175
Heading Depth: 1
Heading Rank: 3

Heading: issue ii: medical expense policy

Text: Employer's sole issue is: did the trial court err when it granted summary judgment to Ewalts and ordered Employer to pay for Ewalts' pregnancy-related medical bills incurred after June 30, 1985? Employer argues that the plan is for employees of the company, and when one ceases to be an employee, he is no longer entitled to the benefits of an employee. Summary judgment should be rendered only if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. SDCL 15-6-56(c); American Indian Agricultural Credit Consortium, Inc. v. Fort Pierre Livestock, Inc., 379 N.W.2d 318 (S.D.1985). Courts have generally distinguished, in these types of cases, medical expense policies on the one hand and accident and illness insurance policies on the other. This concept is critical to our decision herein. If a policy provides coverage for medical expenses or charges which result from a disease or condition having its inception during the policy term, the insurer is not liable for related expenses which are incurred after the coverage is terminated. Wulffenstein v. Deseret Mutual Ben. Assn., 611 P.2d 360 (Utah 1980); Auto-Owners Ins. v. Blue Cross and Blue Shield, 132 Mich.App. 800, 349 N.W.2d 238 (1984); Annot., 66 A.L.R.3d 1205, § 2 (1975). But if the terms of the insurance contract indicate coverage of accidents, illnesses, or conditions arising during the term of the contract, the insurer is liable for related medical expenses incurred after the coverage is terminated. Id. at § 3. So how do we view pregnancy in this case? Here, Employer's benefit plan clearly provides coverage for medical expenses and charges. We must review a pertinent handbook. On page 5 of the benefit plan handbook, the following coverage is set forth: BASIC MEDICAL BENEFITS Hospital Expenses 100% of eligible expenses for 365 days per illness. Maximum Room & Board allowance is the hospital's semi-private room rate. Surgical Expenses 100% of usual & customary charges In-Hospital Doctor 100% of usual & customary charges Expenses MAJOR MEDICAL BENEFITS Deductible $100 per person per calendar year Co-Insurance Chemical Dependency and Mental or Nervous out-patient charges covered at 63% All other eligible expenses covered at 80% of the first $25,000 and 100% of the balance of the calendar year. Lifetime Maximum $250,000 Benefit The handbook also explains the procedure to be followed when an insured individual has a claim: Written notice of a medical expense should be submitted to CBSA within 20 days.... (page 15, emphasis added). Since Employer's benefit plan covers expenses and charges rather than illnesses and conditions, Employer is not liable for Ewalts' pregnancy-related expenses incurred after June 30, 1985, the date on which insurance coverage was terminated. Therefore, Ewalts are not entitled to judgment as a matter of law, and the trial court erred in granting summary judgment. SDCL 15-6-56(c). []