Judge denies motion to dismiss suit filed by employee whose wife’s insurance was canceled just before cancer surgery – The Indiana Lawyer

A man’s lawsuit against his employer after his child’s insurance coverage was canceled and his wife, who had breast cancer, can pursue his claim after a federal judge denied the motion to rejection of the company.

Chief Judge Holly Brady of the Northern District Court of Indiana issued the order Tuesday in Nick A. Taylor, Amber N. Taylor and ZT by Next Friends Nick A. Taylor and Amber N. Taylor against BW Wings Management, LLC., 1:22-CV-0106.

BW Wings Management LLC is the fiduciary of BW Wings Management LLC’s employee benefit plan, according to court records. Through this self-funded group plan, BW Wings provides health insurance coverage to eligible employees.

CIGNA and Orchestrate HR administer the BW Wings plan.

Nick Taylor began working for BW Wings as Regional Manager in early 2017. BW Wings promoted him twice, making him Regional Manager and then Operations Manager in February 2020.

Taylor is married and he and Amber Taylor have one minor child, ZT

As a full-time employee of BW Wings, Taylor was eligible for benefits from the plan, which also provides dependent care benefits to eligible family members of an employee.

As part of Taylor’s promotion to director of operations and his benefits package, BW Wings promised Taylor it would extend health insurance to his wife and child. BW Wings started doing this on March 1, 2020.

Later that spring, Taylor’s wife was diagnosed with an aggressive form of breast cancer and was scheduled to undergo surgery on July 29, 2020.

On July 16, 2020, after the surgery was planned but before it took place, Mark Jones, co-owner of BW Wings, informed Taylor that his wife and children’s health insurance had not been inappropriately implemented under the plan outside of the open enrollment period, and that the health insurance for both of them would end on July 31.

The next day, Taylor contacted David Moore, an insurance liaison for BW Wings, about canceling his wife and children’s health insurance. Moore confirmed the cancellation would take effect July 31, 2020.

On July 21, Taylor informed Moore of his wife’s surgery scheduled for July 29.

The next day, Jones called Taylor and informed him that his wife, children and the plan’s health insurance would be canceled retroactive to June 30, 2020.

Because Taylor’s wife did not have health insurance and could not afford to pay out of pocket for the surgery, she was forced to postpone the surgery.

The Taylors filed suit, asserting interference with their health benefits under the Employee Retirement Income Security Act of 1974, as well as claims under state law for promissory estoppel , breach of fiduciary duty, fraud, disguised fraud, and intentional infliction of emotional distress.

BW Wings moves to dismiss the amended complaint, asserting that it does not contain an ERISA claim and that all state claims are preempted by ERISA.

The district court held that the amended complaint plausibly alleges facts that support an ERISA claim, and that the argument that the state law allegations are preempted is not properly raised in an motion to dismiss.

Brady rejected BW Wings’ argument that the Taylors cannot bring an interference claim under ERISA because they cannot establish an entitlement to benefits that were interfered with under the plan.

Yet while BW Wings contends that the amended complaint does not allege facts demonstrating entitlement to benefits, it requires plaintiffs to prove their entitlement to benefits at the pleading stage, she wrote. But the alleged facts should only outline a plausible assertion.

Brady added that the complaint does not need to state all of the facts that must ultimately be proven to prevail at trial.

The district court also denied BW Wings’ motion to dismiss Taylor’s state law claims under ERISA Section 514(a), otherwise known as the provision conflict pre-emption.

Not only is preemption an affirmative defense, Brady writes, but the 7^th The Circuit Court of Appeals recognized that [i]It follows from this structure and the plain language of Rule 8(c)(1) that an affirmative defense must be raised in the answer, not by motion.

Since preemption is an affirmative defense that must be asserted in an answer and not in a motion to dismiss under the Fed. R.Civ. P. 12(b)(6), Defendants’ preemption argument was not properly presented to the Court, she wrote.