South Carolina Supreme Court Opinion- March 4, 2015


On Wednesday, March 4, 2015, the South Carolina Supreme Court reversed the ALC’s decision in Allen v. SC Public Employee Benefit Authority. Jeffrey Allen (“Appellant”) is a S.C. public school district employee that is insured under the group State Health Plan offered through EIP. Appellant’s daughter was diagnosed with Type 1 diabetes and prescribed an insulin pump. Two weeks prior to attaching the pump, her caregivers attended a two-hour training session where they were trained how to operate the insulin pump.

Appellant submitted a claim for the educational training session. The claim was denied by Blue Cross Blue Shield of SC (“Blue Cross”)  on the grounds that the “benefit plan does not cover education and/or training for this condition.” Appellant appealed the denial through Blue Cross.  The Blue Cross appeal review committee upheld the denial on the basis that diabetes educational training is excluded under the State Health Plan, and that section 38-71-46 of the S.C. Code, which mandates coverage for diabetes education training in certain health insurance policies does not apply to the State Health Plan. Appellant appealed to the EIP Appeals Committee and was denied as well.

Appellant then appealed to the ALC and requested that ALC allow the matter to proceed as a class action lawsuit. The ALC issued an order affirming the EIP Appeals Committee’s decision that the terms of the State Health Plan do not cover diabetes educational training because the State Health Plan does not qualify as “health insurance coverage” as defined by the S.C. Code. The ALC declined to address whether it had the authority to permit the case to proceed as a class action. Appellant appealed the ALC’s order to the court of appeals and the Supreme Court certified the appeal pursuant to Rule 204(b), SCACR.

The Court addressed two issues: 1.) Whether the ALC erred in concluding that section 38-71-46 does not apply to the State Health Plan? And 2.) Whether the ALC erred in failing to address the availability of class action relief?

On the first issue, the Court found that ALC erred in concluding that section 38-71-46 did not apply to the State Health Plan.  When interpreting a statue, the Court must read the language in a sense which harmonizes with its subject matter and accords with its general purpose.  Eagle Container Co., L.L.C. v. Cnty. Of Newberry, 666 S.E.2d 892,896 (2008).  The Court reasoned that given the prevalence of diabetes in South Carolina, coupled with the General Assembly’s purpose in enacting section 38-71-46 that it is inconceivable that the General Assembly intended to exclude South Carolinians insured by the State Health Plan from receiving the benefits of section 38-71-46’s mandate. The Court, in considering both the plain language of the statute and the general purpose behind it, held as a matter of law, that section 38-71-46 applies to the State Health Plan.

Upon reversing the ALC’s decision on the first issue, the Court then considered the issue of ALC’s authority in addressing the class action relief. In the appeal, Appellant argued that he was entitled to a class action before the ALC based on Rule 23 of the SCRCP. He asserted that the SCRCP was applicable pursuant to Rule 68 of the South Carolina Rules of Procedure for the Administrative Law Court (SCRPALC). Based on the language and the accompanying notes, the Court found that the intent of ALC in enacting Rule 68 was to allow the SCRCP to serve as a gap filler in the SCRPALC and to allow the South Carolina Appellate Court Rules to be used as a gap filler in the SCRPALC in an appeal before the ALC. Because the present case was an appeal before the ALC, SCRCP, including Rule 23, is not applicable and neither the SCRPALC nor the South Carolina Appellate Rules provide for a class action to be commenced during an appeal. Thus, the request for a class action proceeding fails as a matter of law.

Accordingly, the Court reversed the ALC’s decision that section 38-71-46  of S.C. Code did not apply to this matter and ordered the EIP to determine and pay the benefits that are due to the Appellant under the State Health Plan.

Justice Pleicones published a dissent in a separate opinion.

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