Administrator Hired to Run City's Health Insurance Program Owes Duty of Good Faith and Fair Dealing Just As Insurer would Owe Duty (Recent Court Decisions‪)‬

Cary v. United of Omaha Life Insurance Co., 68 P.3d 462 (Supreme Court of Colorado--April 21, 2003) The city of Arvada, Colorado, provided a self-funded health insurance program to its employees through the Arvada Medical and Disability Program Trust Fund. The Trust was administered by United of Omaha and Mutual of Omaha of Colorado. Under the arrangement, the Trust was governed by a Board of Trustees but had no employee staff of its own. Rather, the Trust relied on United and Mutual for claims administration. The Trust's arrangement with United was akin to stop-loss insurance for the Trust in that the Trust was responsible for the first $75,000 of covered payments for employee illness, with United responsible for amounts between $75,000 and $1 million.