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Judges differ on insurance coverage

December 18, 2008

A panel of Indiana Court of Appeals judges disagreed about whether a school bus driver who also worked as an independent farmer over the summer should be covered by the school corporation's insurance following a car accident while hauling grain. Judge Melissa May, dissenting from the majority's affirmation of the denial of coverage for the bus driver's accident, worried the majority's interpretation of Exclusion 33 in his insurance policy would require any school employee who may be eligible for workers' compensation coverage to buy it or risk losing insurance benefits provided by the school corporation's health plan.

In Mikel A. Schilling v. Huntington County Community School Corp., et al., No. 35A02-0803-CV-191, Huntington County Community School Corp., Huntington County Community School Corporation Employee Benefit Trust, and American Health Care Partnership Inc., were awarded summary judgment on Mikel Schilling's claims that his health plan pay for his injuries from the accident. Judges Edward Najam and Margret Robb interpreted Exclusion 33 of Schilling's plan through the school corporation to exclude coverage of injuries that would be covered by Indiana's Workers' Compensation Act, regardless of whether workers' compensation was actually obtained by the insured.

Schilling, as an independent farmer, didn't purchase workers' compensation and argued the exclusion needed to state affirmative steps he had to take to purchase the coverage. The majority disagreed, finding the exclusion plainly informed Schilling the plan wouldn't cover injuries coverable by workers' compensation, regardless of whether it had been purchased, wrote Judge Najam.

In Judge May's dissent, she wrote the exclusion implies the purchaser of the workers' compensation would be a school employee, but most aren't self-employed in addition to their school employment. Surely a policy meant to cover a typical school system employee wouldn't exclude coverage just because that typical employee hadn't bought workers' compensation coverage, Judge May wrote. As such, she declined to interpret the exclusion to presume an employee would lose health coverage for any injury covered by workers' compensation that the employee might have been able to buy. Judge May would reverse summary judgment in favor of the school corporation and remand.

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