Court: Parental Rights Determined Health Cost Responsibility

April 27, 2007 (PLANSPONSOR.COM) - The Utah Supreme Court has ruled that the health care plan covering the adoptive father of a baby boy born with severe birth defects was responsible for the child's substantial medical bills after his birth parents' parental rights were ended.

The state high court ruled that the birth parents’ plan was no longer obligated to pay the baby’s medical bills after the birth parents were legally relieved of responsibility for the child when their parental rights ended. That’s when responsibility passed to a plan covering the adoptive father,  justices ruled.

Also, the adoptive father’s plan’s coordination of benefits provision did not mean the plan could refuse coverage, the court decided. 

The case involves Robert and Sue Quaid and the adopted child Skylar, who the court said was born in New York on June 24, 1999 with severe birth defects, including congenital heart disease, that rendered him totally disabled.

The baby received inpatient treatment at Schneider Children’s Hospital in New York. The Quads initiated adoption proceedings in the Fall of 1999 and the adoption of Skylar was finalized on November 14, 1999, the court said.

According to the ruling, the adoptive father’s policy refused to guarantee the child’s coverage until it could determine how benefits under the plan should be coordinated with the birth parents’ policy.

The adoptive father’s plan administrator later denied coverage for certain medical expenses incurred after the child’s enrollment on the basis that the birth parents’ insurer was liable as the child’s primary insurance provider. The birth parents’ plan also denied those claims and the adoptive parents sued the adoptive father’s plan and the birth parents’ insurer.

The trial court ruled for the adoptive father’s plan and the parents appealed.

The Utah Supreme Court ruling in Quaid v. U.S. Healthcare, Inc., 2007 UT 27 (Utah 2007) is    here .