Summary of a Recent
Judicial Development in
Labor

Injury Coverable by Workmen's Compensation is Excluded
from Employee Health Plan Coverage

Walt McCarter
National AgLaw Center Research Associate

Summary of Decision

In Schilling v. Huntington County Community School Corp., 898 N.E.2d 385 (Ind. Ct. App. 2008), the Indiana Court of Appeals held that a school district's health insurance plan did not cover an employee's injury incurred in the course of his farming operation, unrelated to his school job, because his injury would have been coverable by workmen's compensation if he had purchased workman's compensation coverage for his farming operation.

Background

The plaintiff, a school bus driver and self-employed farmer, was injured in a vehicular accident while hauling grain to market. Id. at 387. His employer, the school district, informed him that it would not cover the medical costs based on the language of its employee health plan's "General Plan Exclusions"; Exclusion 33 excluded from coverage any injury resulting from any occupational or employment cause that would have been covered by worker's compensation, whether or not the injured person actually had worker's compensation coverage. Id. The plaintiff had not purchased worker's compensation coverage for his farming operation. Id. After his appeals to the school were denied, he filed a request for declaratory judgment. Id. The court granted the school's motion for summary judgment, and the plaintiff appealed. Id.

Arguments

The plaintiff argued that Exclusion 33 did not apply to him because the exclusion would only apply if worker's compensation "would have covered" his medical expenses, and Indiana's Worker's Compensation Act did not apply to him in his role as a self-employed farmer unless he took several affirmative steps to bring the farming operation under the Act, which he had not done. Id. at 389.

Analysis and Holdings

The court noted that it was undisputed that the plaintiff could have obtained worker's compensation for his farming business but had chosen not to. Id. at 390. The court found that Exclusion 33 had plainly informed the plaintiff that the health plan would not cover injuries coverable by worker's compensation, regardless of whether worker's compensation coverage had been purchased, and it held that his failure to exercise his option to procure such coverage did not affect the meaning of the provision. Id. at 390-91. A dissenting justice opined that Exclusion 33 should not be interpreted to mean that an employee would lose his or her health plan coverage for any injury covered by worker's compensation that employee might have been able to purchase, reasoning that "[s]urely a policy meant to cover a typical school system employee would not exclude coverage just because that typical employee had not bought his or her own worker's compensation coverage." Id. at 391-92.

The case was decided on December 18, 2008.