Connecticut Resident's Class Action Suit Challenges Insurance Company's Denial of Claims for Care in Assisted Living Facility

By Carmine Perri and Taylor Equi of CzepigaDalyPope

According to Connecticut resident Marie Gardner, an insurance company is now attempting to avoid claim liability, only after reaping the benefits of decades of premium payments, by drastically limiting the types of facilities that are covered by policies taken out in the 1990’s. 

According to Mrs. Gardner’s class action suit against CNA Financial Corp. (herein “CNA”), CNA’s actions affect about three hundred and eighty three (383) people in Connecticut and at least twenty thousand (20,000) people nationwide. 

Mrs. Gardner, who is ninety-one (91) years old, purchased a policy from CNA in 1993, and has been a policyholder ever since.  In 2008, Mrs. Gardner fell and broke her hip.  Both Mr. and Mrs. Gardner entered The Village at Buckland Court (herein “the Village”), an assisted living facility1.   Under the terms of Mrs. Gardner’s policy, CNA began making monthly payments to the Village.  In 2011, however, CNA notified Mrs. Gardner that it terminated her claim, on account of her medical condition improving, resulting in Mrs. Gardner having to pay for her policy premiums out of her own assets.

Less than a year after CNA terminated Mrs. Gardner’s claim, Mrs. Gardner fell again and fractured her pelvis.  She, again, applied for her policy benefits to resume paying for her stay at the Village.  CNA, despite previously paying for Mrs. Gardner’s stay at the Village, rejected Mrs. Gardner’s claim.

According to Mrs. Gardner’s Complaint, CNA advised Mrs. Gardner that it had a “new law” that requires, in order to meet the requirements of Mrs. Gardner’s policy, that the facility have a nurse on its premise 24 hours a day; the Village has a nurse on call 24 hours a day.  Additionally, while acknowledging that the Village is a licensed ALSA, CNA further alleged that the Village is not a qualified provider since it is not licensed by the State of Connecticut.

CNA’s denial came despite Mrs. Gardner having held the same policy for the past twenty years, and the Village having previously been a qualified provider under CNA’s own policy.

In Mrs. Gardner’s Complaint, which was filed on December 27, 2013, Mrs. Gardner claims, among many other claims, that CNA violated Connecticut’s Unfair Trade Practices Act (herein also “CUTPA”) by attempting to save itself millions of dollars by reinterpreting policies that otherwise would cover assisted living facility stays.  Mrs. Gardner is seeking a temporary and permanent injunction to prevent CNA from denying future claims for assisted living facility stays, as well as compensatory damages, punitive damages, and attorney’s fees. 

CNA counters that, pursuant to a class action settlement in Dorothea Pavlov, et al. v. Continental Casualty Company, No. 07-02580, Doc. 107 (N.D. Ohio October 7, 2009) (herein “Pavlov”), it now has the authority to reinterpret its existing policies to narrow the scope of facilities it covers, including policies like Mrs. Gardner’s that have been held since the 1990’s.

In Pavlov, the plaintiffs sued CNA after it denied their claims for stays at assisted living facilities alleging that their policies do not cover such facilities.  The plaintiffs were successful in their challenge to CNA’s interpretation of this provision.  Nonetheless, since 2009, CNA now denies any new claim for assisted living facility stays, alleging that ALSAs do not meet CNA’s new interpretation of its policies since Pavlov.

Since this case is still pending, it is unclear how it will unfold.  That said, what is clear is that the outcome of this case will affect many Connecticut residents and scores of people throughout the nation.  Periodically checking on the status of the Marie Gardner matter may prove helpful to elder law practitioners when advising clients in the coming year, especially clients who are either residents of assisted living facilities or contemplating living in one.

1The Village is licensed by the Connecticut Department of Public Health (herein “the DPH”) as a Managed Residential Community (herein “MRC”) as an Assisted Living  Services Agency (herein “ALSA”).  All ALSAs must, pursuant to the DPH regulation 19-13-D105: (1) be able to provide nursing services to its residents; (2) be under the supervision of a physician; (3) keep a daily medical record for each resident; and (4) have a registered nurse on call 24 hours a day who is available to provide services to its residents 24 hours a day.

This article was originally published in the CT-NAELA Practice Update, Spring 2014, Volume 5, Issue 1