INSURANCE-RELATED COURT CASES
Digested from case reports published online
COURT DECISIONS
Plaintiffs challenge “wilderness exclusion”
In early 2016, P.E.L. experienced severe mental health symptoms requiring inpatient hospitalization. After her release from the hospital, P.E.L. spent two months in the Evoke at Cascades Wilderness Program before making the transition to long-term residential treatment.
P.E.L. was a beneficiary of her parents’ (P.L. and J.L.) health insurance plan, which was issued by Premera Blue Cross. The plan covered “residential treatment” for mental health conditions.
Premera denied coverage for Evoke based on a specific exclusion for “[o]ut- ward bound, wilderness, camping or tall ship programs or activities.”
P.E.L. and her parents sued Premera, alleging that the wilderness exclusion violated federal and state parity laws. The trial court dismissed the suit on summary judgment, and the plaintiffs appealed.
The court of appeals reversed in part, partially reinstating the plaintiffs’ claims for breach of contract, insurance bad faith, and violation of the Consumer Protection Act (CPA).
The court held that Premera was entitled to summary judgment on the plaintiffs’ breach of contract action. The plaintiffs asserted claims based on both federal and state parity laws. They did not show, however, that a violation of federal parity law gives rise to a viable common law action for breach of contract. Violations of state parity laws are actionable in contract, but the court said that the specific state parity claim in this case could not succeed given the statutory language in effect during the relevant time. The plaintiffs appealed to the Washington Supreme Court.
The supreme court reversed the court of appeals in part and remanded the plaintiffs’ breach of contract action to the trial court for dismissal. Nevertheless, the supreme court affirmed the court of appeals’ holding that the plaintiffs were not required to produce evidence of objective symptomatology to support their insurance bad faith claim for emotional distress damages. Therefore, the court remanded the insurance bad faith and CPA actions to the trial court for further proceedings.
P.E.L. v. Premera Blue Cross—Supreme Court of Washington—No. 101561-5—December 21, 2023.
