Kilbourn v. Henderson
· Case Facts: Employer’s health plan administrator overstated coverage avail. to an EE (∏), who incurred substantial medical bills on reliance of that coverage. Insurance co. (∆) refused to pay bills, citing the policy. EE sued ins. co. claiming that employer’s h.p.a. was agent for ins. co. and bound ins. co. by her statements.
· Rule: Employer’s administration of a group insurance plan does not create an agency relationship between the employer and insurance co.
· Analysis: Employer is acting only for benefit of its EEs & the employer’s own benefit in promoting better relations btwn itself and its EEs.
o Thus ins. co. not bound by employer’s h.p.a’s statements and ins. co. not responsible for the coverage.