Auto use outside of permission requires minimum coverage

In O'NEILL v. LONG, 2002 OK 63 (07/02/2002), the Oklahoma Supreme Court held that where permission to drive another’s motor vehicle was limited, and where the driver used the vehicle outside of that scope of permission, Oklahoma’s compulsory liability law required coverage up to the minimum Oklahoma liability insurance (10/20/10). Thus, where an automobile was loaned with the express limitation that no one else was to use the car, and where the person who was being loaned the vehicle violated that understanding and allowed another driver to drive the auto, the liability insurance company was liable up to the 10/20/20 limits due to the Oklahoma Compulsory Liability Law (which was designed to protect the driving public). However, the insurance company  was NOT liable for any limits of the liability insurance policy in excess of those limits. The Supreme Court held that unless there was an actual  theft of the vehicle involved, the fact that it was driven used outside of the scope of permission still required 10/20/10 coverage.

Call-in Requirement Unlawful in Comp Cases

On February 26, 2002, the Oklahoma Supreme Court held that requiring an employee, who has suffered an on-the-job injury, to call in to work every day after the employer has received a statement from the employee's physician that the employee would be off work indefinitely is a violation of the Oklahoma Workers' Compensation Act. Termination of the employee for failing to comply with the call-in requirement after receipt of such written notification violates the rights protected by the Workers' Compensation Act and the employee is entitled to damages as a matter of law. Redricks v. Industrial Vehicles International, Inc., 2002 OK 13 (2-26-02).

In Rush Prudential HMO, Inc. v. Moran, argued on January 16, 2002, the U.S. Supreme Court will determine whether states may enforce laws providing for binding independent review of a decision by a health maintenance organization to reject a proposed procedure as medically unnecessary. Oklahoma, like many other states, provides a statutory right to an external review by an independent review organization of a decision under a health benefit plan when the denial of coverage is based on "not medically necessary, medically appropriate, or medically effective" and the cost of the treatment or procedure exceeds $1,000 (52A O.S. §258.3). In Rush, a case filed in Illinois, the federal district court held that the state law was preempted by the 1974 Employee Retirement Income Security Act (ERISA). The U.S. 7^th Circuit Court of Appeals reversed, holding that the ERISA pre-emption did not cover HMO plans. The 7th Circuit found that the Illinois provision "relates to" ERISA plans but was saved from preemption because it regulates the HMO industry as insurers. The court also rejected Rush's argument that the state law conflicts with a substantive provision of ERISA by creating an alternative remedial scheme. The court said the law merely "adds to the contract an additional dispute resolving mechanism," and those contract terms are enforceable under ERISA.

Under §§ 514(a) of ERISA, the federal law supersedes "any and all State laws insofar as they relate to any employee benefit plan." A state law "relates" to an ERISA plan, according to the Supreme Court, when it attempts to regulate matters at the core of ERISA -- for example, the content or administration of an ERISA plan. ERISA pre-emption is broad in its sweep and was designed to ensure that plans and plan sponsors would be subject to a uniform body of benefits law. Despite the broad pre-emption, ERISA has a savings clause for state laws that regulate insurance -- a traditional state concern. But even if the state law falls within the insurance savings clause, it can still be pre-empted if it conflicts with a specific provision of ERISA, such as the civil enforcement or remedy provisions.

The reason for the Supreme Court’s decision last summer to review this case is that the 7^th Circuit’s ruling conflicts with a ruling by the 5th Circuit in 2000 in a challenge to Texas' independent review law, which is very similar to the Illinois law. Oklahoma is in the 10^th Circuit based in Denver. The National Association of Insurance Commissioners have filed a brief siding with state law requiring independent review. The Supreme Court’s decision will have a dramatic impact on whether HMO’s here in Oklahoma and elsewhere throughout the United States have to provide for external review or whether patients are "stuck" with the HMO’s decision.

Printer Friendly View
Add To Favorites
Send To A Friend