Homes of Georgia, Inc. “HGI” filed a complaint in the Superior Court of DeKalb County against Humana Employers Health Plan of Georgia, Inc., Humana Insurance Company f/k/a Employers Health Insurance Company, and Humana, Inc. collectively “Humana” based on alleged overcharges for insurance renewal premiums pursuant to its contract for a small group health insurance plan the “Contract” and the “Plan,” respectively. The trial court ruled in favor of Humana’s motion to dismiss, finding: 1 that all of HGI’s claims were preempted by the Employee Retirement Security Act of 1974 “ERISA”, 29 USC § 1001 et seq., as amended, and were not within ERISA’s savings clause, ERISA § 514 b 2 A, 29 USC § 1144 b 2 A. The trial court dismissed Count 1 of the complaint HGI’s claim for breach of the Contract by considering health status as a factor in determining renewal premiums in violation of OCGA § 33-30-12, the breach of contract claim as barred based on HGI’s failure to exhaust its administrative remedies. On appeal, HGI contends that the foregoing findings were error. This Court finds that HGI’s claims are neither preempted by ERISA nor barred by a failure to exhaust administrative remedies. For these reasons, we reverse. The record shows that HGI is a real estate business located in Alpharetta and owned by George S. Tong and Linda L. Tong. In January 1996, HGI applied to Humana for health insurance coverage for the Tongs and their only employee. Humana accepted their application, entering into the Contract to provide HGI insurance coverage. HGI paid the premiums and renewed the coverage in 1997 and 1998. In 1999, however, after Mr. Tong was diagnosed with prostate cancer, Humana raised HGI’s monthly premium significantly.
In January 2000, Mrs. Tong complained to the Georgia Commissioner of Insurance the “Insurance Commissioner” regarding the rate increases and asked that that his office determine whether the increases violated the law. The Insurance Commissioner conducted an examination of Humana’s practices, and in March 2000, found that Humana had improperly “used health status factors” to calculate renewal premiums. Humana requested a hearing to challenge the Insurance Commissioner’s finding, but in lieu of pursuing the administrative process further, ultimately entered into a consent order pursuant to which Humana agreed to pay a penalty of $1 million, which was allocated among all the group health plans affected by the order, including the Plan. HGI and the Tongs then sued Humana to collect premium renewal overcharges in breach of the Contract.
