"Court OK's Payout Cuts on AIDS Claims"

Important note: Information in this article was accurate in 1992. The state of the art may have changed since the publication date.

"Court OK's Payout Cuts on AIDS Claims"

Advocate (12/15/92) No. 618, P. 22
Coward, Cheryl

Abstract: The Supreme Court's refusal to hear a Houston firm's decision to cut AIDS-related payouts under a self-insured employee health care program may result in other self-insured firms making similar reductions, according to activists. Suzanne Goldberg, an attorney for Lambda Legal Defense and Education Fund (LLDEF), which represented the plaintiff in the case, Greenberg v. H+H Music Co., said, "By refusing to hear this case, the Court leaves employers free to avoid paying for benefits they have promised to employees." The case involves former H+H Music employee John McGann, who filed a lawsuit against the company in 1989 after it cut its maximum payout for AIDS-related claims from $1 million to $5,000. McGann died last year, but the lawsuit has been carried out by Frank Greenberg, the executor of McGann's estate. Donald White, a spokesman for the Health Insurance Association of America, said the ramifications of the court's refusal apply only to the defendant, a small "very atypical" company that chose to self-insure its employee health plan. James A. Kinder, executive vice president for the Self-Insurance Institute of America, a trade group, said the cutback was legal under the Employee Retirement Income Security Act (ERISA), a 1974 law that permits firms to self-insure employee health care plans. Carisa Cunningham, a spokeswoman for the AIDS Action Council, a lobbying group, said that her group will lobby Congress for changes in ERISA.

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