Kenny J. Werdehausen Anita Werdehausen v. Benicorp Insurance Company

LOKEN, Chief Judge.

Kenny Werdehausen had neck surgery and submitted a benefits claim under his employer’s group health plan reflected in an insurance policy issued by Benicorp Insurance Company. In reviewing the claim, Benicorp discovered that Werdehau-sen had failed to disclose the need for neck surgery in his policy enrollment application. Benicorp determined that this was a material misrepresentation because disclosure would have increased the employer’s group health policy premium by $2,000 per month (the estimated cost of the surgery spread over two years). Benicorp retroactively…