Steel of West Virginia (SWVA) provides its employees with healthcare coverage and also purchased stop-loss insurance for expenses that exceed a specified deductible, according to court documents.
Sun Life issued the stop-loss policy for the period of Jan. 1, 2008 through Dec. 31, 2011, according to the suit.
Two of the company’s employees, William Powers and his wife, Jamie Powers, had a son, Drew, who at the age of 3, was diagnosed with advanced Stage IV Neuroblastoma, a rare and aggressive form of childhood cancer.
In accordance with the Sun Life Policy, SWVA denied payment for the treatment expenses that were experimental and/or investigational, according to the suit. Throughout Drew’s course of treatment for cancer, a total of 264 payments were made on behalf of SWVA pursuant to their plan.
SWVA claims from the time Drew Powers was diagnosed in September 2008 until his death on Nov. 26, 2010, he received medical treatment that was entirely unrelated to his cancer and also medical treatment that was related to his cancer, but not experimental nor part of any clinical trial in a total amount of $431,396.10.
A portion of the total, $39,222.27, was incurred prior to the Sun Life policy coverage period, which left the remaining and eligible expenses in the amount of $392,173.83, leaving a total amount of $92,173.83 in excess of SWVA’s $300,000 deductible under the Sun Life policy, according to the suit.
SWVA said on Sept. 28, 2012, the defendants denied its claim, contending that it had not received information necessary to evaluate the claim and on Nov. 20, 2012 and Nov. 27, 2012, the defendants denied the claim in its entirety, based on overly broad, inaccurate and unsupported assumptions that all of the medical treatment received by Powers was experimental, investigational and/or part of a clinical trial.
On Jan. 22, 2013, SWVA’s former counsel appealed Sun Life’s denial and, despite SWVA’s satisfaction of its burden of proof, the defendants reaffirmed its total denial.
On July 8, 2013, in a last good faith attempt to avoid litigation, SWVA’s current counsel appealed the affirmation of the claim denial and on Jan. 17, 2014, the defendants issued a final denial.
SWVA is seeking compensatory and punitive damages with pre- and post-judgment interest.
An American steel company has filed a lawsuit against Sun Life Assurance Company’s Canadian and American divisions and Delaware Life Insurance Company, accusing the companies of a wrongfully denied claim.