Harris Corporation v. Humana Health Insurance Company of Florida, Inc.

Margaret Shallenberger was employed by Harris Corporation (Harris) (plaintiff) and enrolled in the Harris health-insurance plan. At the time, Shallenberger was already covered by her husband’s employer-sponsored plan with Humana Health Insurance Company of Florida, Inc. (Humana) (defendant). The Humana plan had a coordination of benefits (COB) provision, which coordinates health-insurance benefits of families with two wage earners. The Harris plan did not have a COB provision. Under the Humana COB provision, if a family had plans with and without COB provisions, the plan without a COB provision was considered to determine its benefits before a plan with the COB provision. Therefore, the plan with a COB provision could determine priority with respect to a plan without a COB provision. In 1992, Shallenberger became sick and decided to purchase long-term disability insurance through Harris. Shallenberger qualified for Medicare. Shallenberger died in December 1995. Harris paid $780,267.88 in benefits for Shallenberger. Harris submitted a reimbursement claim to Medicare for Shallenberger’s medical bills. Medicare refused to pay, because Shallenberger had coverage under Humana. Harris submitted a claim to Humana, but Humana refused to pay. Litigation commenced. The trial court determined that, because the Humana policy had a COB provision but the Harris policy did not, the Harris policy was primary. The district court granted summary judgment in favor of Humana. Harris appealed, arguing that the Medicare Secondary Payer Act (MSPA) made Humana primarily liable for the costs of Shallenberger’s health care, despite the provisions in the health plans.