Suit over Health Plan Denial Charge Cleared to Move Forward

June 16, 2010 ( – A federal judge in Virginia has cleared the way for a remodeling firm’s only female worker to move forward with her suit alleging she was fired because she would not waive her health insurance rights under a new plan.

U.S. District Judge Liam O’Grady of the U.S. District Court for the Eastern District of Virginia issued the ruling in plaintiff Sandra M. Porter’s allegation that Elk Remodeling Inc. violated Section 510 of the Employee Retirement Income Security Act (ERISA).

O’Grady rejected Elk’s argument that the ERISA claim should be thrown out because no plan had been established when Porter was fired so Porter was not a participant under any plan.

According to the ruling  Elk applied for group health coverage in April 2007 for the company president’s family and two full-time employees, who were both male. Porter did not receive any information about the group plan, the court said. According to the court, Elk’s president explained it would cost nearly $2,000 more to insure Porter on the plan immediately, speculating the higher cost was because she was female. Elk’s president allegedly agreed to continue to reimburse Porter for her individual policy premium payments and would add her to the group plan later.

Porter was later asked to sign a waiver of enrollment form to show she declined group coverage. When she refused , she was terminated and filed suit, the ruling said. 

Looking at the actions that Elk took in applying for coverage, the court found that a plan had been set up before Porter was fired, that Elk had filled out and signed an application for coverage and submitted payroll reports to establish which employees would be covered. Not only that, but because all full-time employees were eligible for the plan, Porter, as a full-time employee, would have been eligible for the plan had she not been fired before the plan took effect, the court said.

O’Grady also found that there was enough disagreement over the facts about whether Porter’s termination on the basis of having a “bad attitude” was actually an excuse for discharging her so she could not exercise her rights to health coverage under a company plan.

The case is Porter v. Elk Remodeling Inc., E.D. Va., No. 1:09-cv-446.