Seymour v. Blue Cross/Blue Shield

Blue Cross/Blue Shield (Blue Cross) (defendant) provided health insurance to Ed Seymour (plaintiff) through his employer. When Seymour began working, the insurance covered liver transplants. Later, Blue Cross amended its coverage to exclude liver transplants and claimed to have notified all employers and employees. Utah Code Ann. § 31A-21-106(2) required that employers and employees agree to the amendment in writing, but neither Seymour nor his employer did so. The original policy provided, however, that Blue Cross could unilaterally amend the policy at any time. Although Seymour stated that he was never notified of the amendment, Blue Cross reissued the policy containing the organ-transplant exclusion, which Seymour and his wife acknowledged they received shortly after their son Brayden was born, and the Seymours paid the premiums without protest. Brayden was diagnosed with a congenital liver disease requiring a liver transplant, but Blue Cross denied coverage. The matter went before an arbitration panel, which concluded there was no coverage. Seymour sought to vacate the award, arguing that § 31A-21-106(2), which required that the modification of an insurance contract during the policy term be in writing and agreed to by the parties, controlled. However, Blue Cross argued that subsection (3), which exempted ERISA plans from the requirements of subsection (2), applied. Seymour also stated that Blue Cross’s unilateral modification was against public policy. The district court confirmed.