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Damaged worker cannot claim bad faith against TPA



An injured employee may not hold a third party's claim administrator responsible for failure to pay employee compensation benefits, the Supreme Court of Iowa held on Friday.

In De Dios Against Injury Insurance Co., North America ]in a 5-2 decision, the state college held that an employee may not exercise an unfair right to a third party's claims administrator of an insurance company.

Samuel De Dios worked for Brand Energy & Infrastructure Services and was injured at a construction site when he was behind the security gate. The company maintained an insurance liability for employee compensation through Philadelphia-based Injury Insurance Co., North America, a subsidiary of ACE American Insurance Co., which utilized Peachtree Corners, Georgia-based Broadspire Services Inc. as its third-party administrator. Mr De Dios argued that his boss said he could go where he liked treatment, and in the next few days his back pain was getting worse. He claimed that his employer, from the date of the accident on April 8, 201

6, through May 9, 2016, failed to give him easy work. He claimed that the insurer and TPA knew or should have known that he had work restrictions due to his injury and was obliged to pay him temporary total disability and / or healing benefits until a determination of maximum medical improvement was made by a medical expert.

Mr. De Dios argued that neither TPA nor the insurer interviewed him, his treatment physician or colleague who witnessed the accident before he denied him workers compensation, and left a claim at the Iowa Workers Compensation Commissioner for Injury and Broadspire. The insurer and TPA jointly refused responsibility for their work injury. He later filed a false claim against Broadspire in U.S. District Court of the Northern District of Iowa. The court declined to rule, but instead asked a question to the Supreme Court of Iowa to determine whether De Dio's claim against Broadspire could continue.

The Court argued that Broadspire, as a TPA, is not an issuer or equivalent to an insurer, and therefore liability for improper remuneration for employee remuneration cannot be issued without insurance / insurance policy.

Although the Court noted that Iowa employee's law of friends refers to TPA, "it does not impose any obligations in relation to the handling of employee compensation claims."

Mr. De Dios argued that an insurer could fully delegate his authority to a TPA, who "duly refuse coverage and delay payment of a claim on a injured worker with minimal consequences", but the court says an insurer cannot delegate his duty to good believe. Therefore, the Court argued that there was no legal basis for prolonging unfair faithfulness to TPAs ​​on employees and raising the case to the district court for further negotiations.

Two trials differ from the majority. In its dissenting opinion, Justice Brent Appel said that when third-party intermediaries "have the power to influence the claimant's insurance interests, they should be liable for damages for their unbelievable acts".

He argued that there was nothing in the Iowa case law that prevented the court from recognizing a damages claim when an insurance intermediary is the insurer's functional counterpart and said it was critical to have direct liability in insurance.

"For me, one of the essential features of our compensation system is to ensure that parties responsible for the anticipated damage they cause through their maladministration, especially those done in bad faith, are held directly accountable," he said. and claimed that the court would recognize a potentially bad faith claim against third party administrators in the insurance situation when they essentially perform the essential functions of an insurance company alleged in this case. "

Broadspir e refused to comment. The lawyers in the case did not immediately respond to the request for comment.

                    


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