Ex-workers can't lose insurance, justices say They can keep coverage for 18 months if they pay premium, court rules

Legal affairs

June 09, 1998|By Lyle Denniston | Lyle Denniston,SUN NATIONAL STAFF

WASHINGTON -- The Supreme Court ruled unanimously yesterday that an employer cannot legally cut off health insurance for a worker who leaves or is fired even if that worker is covered by a spouse's or domestic partner's insurance.

A 1989 federal law, the court decided, requires that a worker can opt to remain under his former company's policy for 18 months after leaving the job as long as he pays the premium.

Only if the worker obtains new coverage, equal in scope, can the employer cut off the worker's prior coverage short of 18 months, the court made clear. Pre-existing coverage under another family member's insurance cannot be used to justify dropping the worker from the employer's health plan, according to the decision.

The ruling cleared up conflicting decisions among lower federal courts. In an opinion written by Justice David H. Souter, the court rejected a St. Louis medical company's argument that it should be free to end health coverage for a fired worker because his wife had coverage from her employer that extended to her husband.

A continuation of coverage does not amount to a windfall for the worker, the court said, because the worker must continue to pay for the coverage as long as it remains in effect.

The case involved Bonnie L. Geissal of St. Louis, the widow of James Geissal, who died of cancer after the legal dispute arose. Mrs. Geissal is seeking to recover benefits from the company that fired her husband, Moore Medical Corp., and then sought to drop his coverage. Mrs. Geissal, an employee of Trans World Airlines, had health insurance that covered her husband, too.

In another decision yesterday, the court ruled unanimously that a company can sometimes be required to reimburse the federal government for the cost of cleaning up toxic waste at a facility owned by a company subsidiary. The parent company's duty to pay, the court said in an opinion by Souter, rests on one of two premises. First, it must pay for the cleanup if the company and its subsidiary are essentially one and the same, and any waste dumping by the subsidiary can be considered the fault of the corporation as a whole. Second, even if the subsidiary owns the facility where the dump is created, the parent company can be held liable if its own actions at the facility make it an operator, the court indicated.

But, the opinion stressed, it is not enough that the parent and subsidiary have joint officers, or that the parent oversees what the subsidiary does. To be held liable, the court said, the parent must manage or conduct the operations that led to the pollution.

Pub Date: 6/09/98

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