Opinion ID: 2308670
Heading Depth: 1
Heading Rank: 4

Heading: This Case Net Amount of Lost Earnings

Text: The undisputed record reflects that both Wright and Miller were provided with employer-paid health insurance prior to their automobile accidents as part of the terms of their employment. For a period of time after the accidents, their respective employers continued to pay Wright's and Miller's health insurance premiums. After the accidents, Aetna's and Crum & Forster's PIP coverage paid Wright and Miller for their lost wages. Therefore, pursuant to this Court's holding in Nalbone, neither Wright nor Miller had then suffered any out-of-pocket loss for which [they] had not received full compensation through a combination of employer benefits and PIP payments. See id. 569 A.2d at 75. However, once the injured employees, Wright and Miller, themselves became obligated to pay health insurance premiums previously paid by their employers, they did sustain an out-of-pocket loss for which they did not receive full compensation through a combination of employer benefits and PIP payments. See id. We find that, in addition to our analysis in Nalbone, the rationale of the United States Supreme Court in a similar context is also instructive in resolving the issue of whether employer-paid health insurance premiums constitute earnings. United States v. Carter, 353 U.S. 210, 77 S.Ct. 793, 1 L.Ed.2d 776 (1957). Carter concerned a claim under the Miller Act, which requires a federal contractor to post a surety bond that guarantees the payment of sums justly due to its employees. 40 U.S.C.A. §§ 270a.-270d. (1986). Because the employer had failed to make health plan contributions, when an action was filed on the surety bond, the United States Supreme Court held that those contributions were a part of the compensation for the work to be done by [the] employees, and therefore the unpaid contributions were sums justly due under the statute. United States v. Carter, 353 U.S. at 217-18, 77 S.Ct. at 797. The United States Supreme Court in Carter did not base its holding on the premise that those contributions were included in wages. In fact, it specifically noted that the Miller Act does not limit recovery on the statutory bond to `wages.' Id. at 217, 77 S.Ct. at 797. The United States Supreme Court held that [f]or purposes of the Miller Act, [the employer's health plan] contributions are in substance as much `justly due' to the employees who have earned them as are the wages payable directly to them in cash. Id. at 220, 77 S.Ct. at 798 (emphasis added). Accordingly, it held that [i]f the employees are to be `paid in full' the `sums justly due' to them, they must receive their lost wages and the employer's health plan contributions. Id. Compare Morris-Knudsen Constr. Co. v. Director, OWCP, 461 U.S. 624, 103 S.Ct. 2045, 76 L.Ed.2d 194 (1983). [2] Section 2118 mandates payment for lost earnings. 21 Del.C. § 2118(a)(2)a.2. The phrase [n]et amount of lost earnings in Section 2118, like the statutory bond language in the Miller Act, is broader than the term wages and, a fortiori, is not synonymous with it. Accord United States Fidelity and Guar. Co. v. Neighbors, Del.Supr., 421 A.2d 888 (1980). Accordingly, the Superior Court correctly determined that the majority rationale in Nalbone permitted Wright and Miller to recover the COBRA cost of paying health insurance from their PIP carriers as part of their lost earnings. The phrase [n]et amount of lost earnings in Section 2118 mandates PIP payments to an injured employee for the out-of-pocket expense incurred by the loss of employer-paid health insurance premiums. Wright and Miller were entitled to PIP payments for their out-of-pocket health insurance premiums because they had earned them as much as the wages payable directly to them in cash. United States v. Carter, 353 U.S. at 220, 77 S.Ct. at 798. The employer-paid health insurance premium component of Wright's and Miller's earnings were lost when those health insurance premiums were no longer paid by their employers. [3] See id.