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Rowello v. Healthcare Benefits, Inc.

United States District Court, Third Circuit

December 13, 2013

NORMA ROWELLO and NORMA ROWELLO as Administrator of the Estate of STEVEN J. ROWELLO Plaintiff,
v.
HEALTHCARE BENEFITS, INC. and UNUM LIFE INSURANCE COMPANY OF AMERICA a/k/a UNUM PROVIDENT Defendants.

OPINION

ROBERT B. KUGLER, District Judge.

This matter comes before the Court upon a motion filed by Defendant Unum Life Insurance Company of America a/k/a Unum Provident ("Unum") for summary judgment, and upon the cross-motion of Norma Rowello ("Plaintiff") for summary judgment. For the reasons stated herein, Unum's motion for summary judgment will be GRANTED, and Plaintiff's crossmotion will be DENIED.

I. BACKGROUND AND PROCEDURAL HISTORY

Plaintiff's husband, Steven Rowello, was employed by The Cooper Health System ("Cooper") from April 13, 1987 until his death on December 22, 2011. Unum's Statement of Undisputed Material Facts ("SUMF") ¶ 1. Mr. Rowello participated in Cooper's employee welfare benefit plan (the "Plan") through HealthCare Benefits Trust, previously AllHealth Insurance Trust. Id . ¶¶ 2-3. Unum provides a Group Life Insurance Policy that funds these benefits, while HealthCare Benefits, Inc. ("HCB") is the Plan Administrator and named fiduciary of the Plan. Id . ¶4A-4B. The Plan is "self-administered, " which means that HCB and/or Cooper manages and administers the aspects of the Plan that include enrolling participants, providing them with information about the Plan's requirements, calculating and collecting premiums from employees, and submitting the premiums to Unum. Id . ¶ 4D. The Plan is governed by the Employee Retirement Income Security Act of 1974 ("ERISA"). See Sec. Am. Compl. Ex. E.

HCB provided Unum with the authority to make "benefit determinations, " which included "determining eligibility for benefits and the amount of any benefits, resolving factual disputes, and interpreting the enforcing the provisions of the Plan." SUMF ¶ 4C; Ex. B. On January 1, 2006, the Plan was amended and as a result, offered participants the opportunity to apply for additional supplemental life insurance benefits. Id . ¶ 5. The amended Plan provided:

WHEN CAN YOU APPLY FOR ADDITIONAL BENEFITS IF YOU APPLY MORE THAN 31 DAYS AFTER YOUR ELIGIBILITY DATE? (LATE ENTRANTS)
You can apply for additional benefits only during an annual enrollment period or within 31 days of a change in status. Evidence of insurability is required for any amount of insurance.
Unum and your Employer determine when the annual enrollment period begins and ends. Coverage applied for during an annual enrollment period will begin at 12:01 a.m. on the later of:
- the first day of the next plan year; or
- the date Unum approves your evidence of insurability form.

Aff. of Holly Libby Ex. C at 18. The Plan further explained that:

EVIDENCE OF INSURABILITY means a statement of your or your dependent's medical history which Unum will use to determine if you or your dependent is approved for coverage...

Id. at 44. Prior to January 1, 2006, Mr. Rowello's coverage already included basic death benefits and supplemental life insurance coverage in the amount of $80, 000 that he had enrolled in effective January 1, 2004. SUMF ¶ 3. In order to increase his life insurance benefits by an additional $130, 000, Mr. Rowello first submitted a document called a Statement of Insurability form to Cooper, dated November 2, 2005, which contained five Employee Health Questions. Id . ¶¶ 9-11, 16. Cooper had the authority to approve coverage for amounts under $500, 000 as long as all five questions were answered "No." Aff. of Holly Libby Ex. A. at 120. Mr. Rowello answered "No" to four of the five questions, but answered "Yes" to the following question that appeared on the Statement of Insurability form:

Within the past 10 years, have you received medical advice or sought treatment for stroke, congestive heart failure, chronic lung disease including emphysema, diabetes treated with insulin or oral medications, hepatitis (other than type A), cirrhosis of the liver, chronic renal Disease ...

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