What Do You Mean It's Not Covered: How One Policy Defined "Covered Family Member"

Under the contract, Aetna was only obligated to pay Amy's medical bills as long as she was "a covered family member." Coverage of an individual terminated when the policy was discontinued or when the individual's employment terminates. Therefore, the policy read: "Any Dependant Coverage of an individual will terminate... when the individual ceases to be in a class of individuals eligible for such Dependant Coverage." However, it also provided that: If coverage for a family member... terminates while he is totally disabled, any benefit provided... for that family member will continue to be available for expenses incurred while he continues to be totally disabled but not beyond 12 months from the termination date. This section applies only to claims made under the Major Medical, Comprehensive Dental, or Comprehensive Benefit sections of the contract. Amy's treatment, which fell under the Major Medical section, was therefore liable to be terminated. Forbau argued that the policy afforded Amy a right to receive payment for all future medical services related to any accident occurring during the policy period. This interpretation was based on the following clause in the policy:

Terminating Benefits

If any benefit ceases to apply to an individual or a dependent, coverage for that benefit will cease immediately but without prejudice to any rights under the benefit established by this person while the coverage was in force. Forbau also argued that even if this clause did not explicitly provide Amy with coverage, it at least created an ambiguity to be interpreted in favor of coverage. The state supreme court didn't buy these arguments. It wrote, "not every difference in the interpretation of a contract or an insurance policy amounts to an ambiguity. Both the insured and the insurer are likely to take conflicting views of coverage, but neither conflicting expectations nor disputation is sufficient to create an ambiguity." The "without prejudice" clause preserved the right to benefits" established... while the coverage was in force." It did not create new rights or benefits beyond those afforded by the other provisions of the policy, the court ruled.