Jan. 01--An Oregon company facing a lawsuit from government employees in New Mexico is asking that the dispute be moved to federal court from state District Court, where it had been filed in November.
In making the argument, Standard Insurance Co. said the value of the claims could easily exceed $5 million, money that would have to be refunded by Standard, making the classaction suit more than a New Mexico dispute.
The original lawsuit, which requested a class action, claims that premiums for supplemental life and accidental death and dismemberment insurance were collected fraudulently from state and other government employees whom Standard considered to be ineligible for the coverage.
Such ineligibility was based on paperwork needed to show "evidence of insurability," such as medical reports, for people who added the coverage after an initial 31-day enrollment period. The issue became public earlier this year after two state employees or their fami- lies were denied the benefits. Those claims have since been settled.
While more than 9,000 state employees have been paying for such supplemental coverage, no one has provided numbers on how many fit the specific situation of not providing a required evidence of insurability.
The plaintiffs identified in the case, Brett Woods and Kathleen Valdes, are actually considered eligible for the supplemental coverage, states Standard's court filing requesting federal jurisdiction.
Standard also contends that the state administered the insurance policies and used summary billing, which means the state "submitted consolidated premium payments on a lump-sum basis without any details identifying who paid the premium, when they were employed, what coverage they had elected, when they elected any coverage, or any other details regarding eligibility."
State General Services Secretary Ed Burckle told the Journal previously that some human resources people in state government apparently were not properly trained in how to handle certain issues when the state insurance contract switched to Standard in 2007.
At the same time, he vowed that anyone who had been paying premiums for the insurance coverage in question would receive the benefits for the affected time period, regardless of eligibility questions.
In its f iling, Standard stated that it and the state of New Mexico "began working on resolving all issues surrounding the provision of EOI (evidence of insurability) by employees before this case was filed and plan to amend the Policy to ensure that no such claims are denied merely based on an employee's failure to provide EOI."
As far as which court has jurisdiction, Standard's federal court filing from Friday contends that, "Although they are tangential to the dispute and no significant relief is sought from them, Plaintiffs have also named as Defendants the State and an individual employee of Standard, Martha Quintana, for no apparent reason other than to prevent removal to this Court."
It notes that eight causes of action were listed against Standard in the lawsuit, but only two against the state and no specific violation against Quintana.
(c)2013 the Albuquerque Journal (Albuquerque, N.M.)
Visit the Albuquerque Journal (Albuquerque, N.M.) at www.abqjournal.com
Distributed by MCT Information Services