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NATIONWIDE MUT. INS. CO. v. TEAMSTERS HEALTH & WEL

September 12, 1988

NATIONWIDE MUTUAL INSURANCE COMPANY
v.
TEAMSTERS HEALTH AND WELFARE FUND OF PHILADELPHIA AND VICINITY



The opinion of the court was delivered by: LUDWIG

 EDMUND V. LUDWIG, UNITED STATES DISTRICT JUDGE

 The parties waived their right to trial and agreed to have this action disposed of on stipulated facts.

 I.

 Plaintiff Nationwide Mutual Insurance Company is an Ohio corporation licensed to do business in Pennsylvania. Defendant Teamsters Health and Welfare Fund of Philadelphia and Vicinity is a trust fund established June 1, 1965 to provide health and medical benefits to eligible participants and dependents. The Fund's sole office is located in Philadelphia.

 In August, 1980 Dominic Zaccardi obtained automobile insurance from Nationwide. He elected to have personal injury protection provided through the Fund. This election was made under section 203 of Pennsylvania's then No-Fault Motor Vehicle Insurance Act:

 
The owner or operator of a motor vehicle may elect to provide for security in whole or in part for the payment of basic loss benefits through a program, group, contract or other arrangement that would pay to or on behalf of the victim . . . [required benefits]. In all such instances, each contract of insurance issued by an insurer shall be construed to contain a provision that all basic loss benefits provided therein shall be in excess of any valid and collectible benefits otherwise provided through such program, group, contract or other arrangement as designated at the election of the owner or operator which shall be primary.

 40 Pa. C.S.A. § 1009.203 (repealed). As a result, Zaccardi received a reduction in his automobile insurance policy premium. In August, 1982 the insurance policy was renewed.

 The Fund was established in 1965 by an agreement and declaration of trust among several local unions associated with the International Brotherhood of Teamsters and various employers. It is an "employee welfare benefit plan" within the meaning of section 3(1) of the Employee Retirement Income Security Act of 1974, 29 U.S.C.A. § 1002(1). Under § 302 of the Labor Management Relations Act of 1947, 29 U.S.C.A. § 186, the Fund is administered by an equal number of union-designated and employer-designated trustees. Its primary source of income is monthly employer contributions made pursuant to collective bargaining agreements. It covers more than 12,000 employee beneficiaries.

 Zaccardi's participation in the Fund began shortly after he was employed by Norristown Wholesale, Inc., a party to a collective bargaining agreement with Teamsters Local Union 929. Zaccardi was eligible for Fund benefits from December 1, 1982 until January 31, 1985. Coverage under the Fund is on an expense-incurred basis.

 On October 11, 1982 the Fund adopted an amendment specifically intended to make it secondary to automobile insurance.

 
Coordination of Benefits : The Teamsters Health and Welfare Fund provides for a Coordination of Benefits Provision. This means that all benefit payments are "coordinated" with the benefit payments from any other plans under which a family member is covered, so that the total benefits payable under all such plans shall not exceed 100% of the allowable expenses. This provision will not apply to other group or individual insurance policies which require that you pay the entire premium.

 On January 6, 1983 the Fund notified its participants:

 
For the record, the Fund considers itself secondary to your No-Fault Auto Insurance. In other words, if after your auto insurance has paid your medical bills you still have medical expenses which were unpaid, the Fund will pay the remaining covered expenses. Between both coverages, generally 100% of your medical expenses will be covered. Your Fund is not an insurance carrier within the ...

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