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Pelliccia v. Anthem Insurance Companies, Inc.

Court of Appeals of Indiana

January 4, 2018

John Pelliccia, M.D., Appellant-Plaintiff,
v.
Anthem Insurance Companies, Inc., Appellee-Defendant.

         Appeal from the Marion Superior Court The Honorable Cynthia Ayers, Judge Trial Court Cause No. 49D04-1512-PL-41123

          Attorney for Appellant David F. McNamar McNamar & Associates, P.C. Westfield, Indiana

          Attorneys for Appellee Sally Franklin Zweig Kristopher N. Kazmierczak Katz Korin Cunningham, P.C. Indianapolis, Indiana

          Barnes, Judge.

         Case Summary

         [¶1] Dr. John Pelliccia appeals the trial court's grant of summary judgment in favor of Anthem Insurance Companies, Inc. ("Anthem"). We reverse and remand.

         Issue

         [¶2] The restated issue before us is whether Anthem properly cancelled Dr. Pelliccia's personal health insurance policy for nonpayment of premiums and refused to pay claims incurred by him during the policy's premium payment grace period.

         Facts

         [¶3] In December 2013, Dr. Pelliccia purchased a personal health insurance policy from Anthem to cover him and his wife for the year 2014. The premiums were in the monthly amount of $649.77. Dr. Pelliccia made the first payment of $649.77 on December 27, 2013, and arranged for his premiums to be paid by automatic debit from his bank account. This first premium payment apparently was not recorded by Anthem until January 17, 2014.

         [¶4] Thereafter, Anthem sent Dr. Pelliccia monthly billing invoices. The first such invoice in the record, dated January 29, 2014, listed a due date of February 1, 2014, and requested payment in the amount of $1, 299.54, and indicated that such a payment would cover from February 1, 2014 to April 1, 2014. Each subsequent invoice listed the same premium amount due, and indicated that payment of that amount would provide coverage for two months. These invoices remained the same through November 2014.

         [¶5] For some reason, apparently related to Dr. Pelliccia's change of banking institutions, the second premium payment of $649.77 was not made until March 6, 2014. Another such payment was made on March 31, 2014; subsequent payments were regularly made at the end of each following month, and the last payment was made on December 2, 2014. It seems a total of eleven payments were made for the 2014 policy instead of the required twelve payments.

         [¶6] Each billing invoice stated in part, "Please make your payment within 31 days of the premium due date. Your failure to do so will result in retroactive termination of your policy due to the nonpayment of premium. Your coverage will terminate on the date through which your premiums are paid." Appellant's App. Vol. III p. 164. The insurance policy itself stated, "The Member's coverage will terminate if . . . The Member fails to pay his or her Premium, and the grace period has been exhausted." Id. at 92. The policy also provided, "In the case of a termination for non-payment of Premium, and the Member is not receiving Advance Payments of the Premium Tax Credit, the last day of coverage is the last day for which Premium payment is made consistent with existing State laws regarding grace periods." Id. The policy contained the following language defining and explaining the "grace period" for payment of premiums:

If the Subscriber does not pay the full amount of the Premium by the Premium due date, the grace period is triggered. The grace period is an additional period of time during which coverage remains in effect and refers to either the 3-month grace period required for individuals receiving Advance Payments of the Premium Tax Credit (APTC) or for Individuals not receiving the APTC, it refers to any other applicable grace period.
If the Subscriber does not pay the required premium by the end of the grace period, the Contract is cancelled. The application of the grace period to claims is based on the date of service and not on the date the claim was submitted.
* * * * *
If the Subscriber is not receiving an APTC, this Contract has a grace period of 30 days. This means if any Premium payment, except the first, is not paid on or before the date it is due, it may be paid during the grace period. During the grace period, the Contract will stay in force unless prior to the date Premium payment is due You give timely written notice to Us that the Contract is to be cancelled. If you do not make the full Premium payment during the grace period, the Contract will be cancelled on the last day of the grace period. You will be liable to Us for the Premium payment due ...

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