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HALL v. PENNWALT GROUP COMPREHENSIVE MED. EXPENSE

December 27, 1988

ELIZABETH HALL
v.
PENNWALT GROUP COMPREHENSIVE MEDICAL EXPENSE BENEFITS PLAN, PENNWALT CORPORATION and TRAVELERS INSURANCE COMPANY



The opinion of the court was delivered by: VANARTSDALEN

 DONALD W. VANARTSDALEN, SENIOR UNITED STATES DISTRICT JUDGE

 Presently before the court is defendant Pennwalt Corporation's (Pennwalt) motion to dismiss Count V of the complaint. For the reasons stated hereafter defendant's motion will be denied.

 I. FACTUAL BACKGROUND

 Plaintiff Elizabeth Hall commenced the present action *fn1" to recover medical expense benefits allegedly due her under a group insurance policy issued to her employer Pennwalt by defendant The Travelers Insurance Company (Travelers). Plaintiff claims federal jurisdiction pursuant to 29 U.S.C. § 1132(e).

 Plaintiff began her employment as a customer sales representative for defendant Pennwalt in April of 1985. In February 1986 plaintiff allegedly became disabled as a result of performing the duties of her job. Pennwalt subsequently terminated her employment effective August 1, 1986 and her coverage under Pennwalt's Group Comprehensive Medical Benefits Plan (hereinafter group benefit plan) effective August 31, 1986. Count V of the complaint specifically alleges that neither Pennwalt nor Travelers notified plaintiff of her right to convert her coverage under the Travelers group benefit plan to coverage under an individual policy as required by 40 Pa.Stat.Ann § 756.2(d)(19) (Purdon Supp. 1988) (hereinafter section 756.2(d)(19) or the Pennsylvania statute) which states at pertinent part:

 Id.

 Defendant Pennwalt contends that pursuant to Federal Rule of Civil Procedure 12(b)(6) Count V should be dismissed for failure to state a claim upon which relief can be granted because the statute underlying that claim is preempted by the Employee Retirement Income Security Act, commonly known as ERISA. In the alternative, defendant contends that even if the Pennsylvania statute is not preempted by ERISA; that plaintiff's claim for benefits fails to state a claim upon which relief can be granted because the statute "only provides for a continuation of the election period; it specifically precludes the creation of additional rights and remedies." Memorandum of Law in Support of Defendant Pennwalt's Motion to Dismiss Count V of the Complaint, at 2 n. 1 (hereinafter Defendant's Brief). After a discussion of the applicable provisions of ERISA, I will address defendant's arguments seriatim.

 II. DISCUSSION

 A. Applicable ERISA Provisions

 Three subsections of the ERISA statute determine whether the Pennsylvania statute at issue is preempted by federal law. First, the comprehensive preemption provision found in subsection (a) of 29 U.S.C. § 1144 states:

 
Except as provided in subsection (b) of this section, the provisions of this subchapter and subchapter III of this chapter shall supercede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan described in section 1003(a) of this title and not exempt under section 1003(b) of this title.

 29 U.S.C. § 1144(a) (1982). Second, the "insurance savings clause," section 1144(b)(2)(A) states that, with one exception, nothing in ERISA "shall be construed to exempt or relieve any person from any law of any state which regulates insurance, banking, or securities." Third, the ...


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