## Facts

- Ed Seymour worked for Bookcraft, Inc., and enrolled in its group health plan; he later added his wife, Shannon, as a dependent.
- On December 1, 1984, Bookcraft changed insurers to Blue Cross/Blue Shield of Utah (BCBSU); the initial policy covered liver transplants.
- In late December 1984, BCBSU issued an amendment excluding liver-transplant coverage effective February 1985; Bookcraft received it, but the Seymours asserted they did not.
- The policy contained a clause reserving BCBSU’s right to amend the plan, effective 30 days after written notice to the subscriber or the employer/group leader.
- After the birth of the Seymours’ son, Brayden, BCBSU reissued the policy expressly excluding organ transplants; the Seymours acknowledged receipt and continued paying premiums without protest.
- Brayden was diagnosed with a congenital liver disease requiring a liver transplant; BCBSU denied coverage based on the exclusion.
- The dispute proceeded to contractual arbitration, and the arbitration panel found no coverage and ruled for BCBSU.

## Issues

1. Whether Utah Code Ann. § 31A-21-106(2) required a written agreement by both insurer and insured for a mid-term modification reducing benefits, thereby invalidating the liver-transplant exclusion.
2. Whether § 31A-21-106(3) exempted ERISA-governed plans from the written-agreement requirement in subsection (2).
3. Whether enforcing the plan’s unilateral amendment clause and the arbitration award violated a well-defined public policy or otherwise provided a basis to vacate the award under the Federal Arbitration Act.

## Decision

- The Tenth Circuit affirmed the district court’s order confirming the arbitration award and denying the motion to vacate.
- The court held the group health plan was an ERISA employee welfare benefit plan.
- Because § 31A-21-106(3) exempted ERISA plans from subsection (2), Utah’s written-execution requirement did not apply to the plan amendment.
- The court concluded the amendment excluding liver transplants was consistent with the plan’s terms and notice framework and was not barred by public policy.
- The court found no Federal Arbitration Act ground to vacate the award.

## Legal Principles

- When a plan is governed by ERISA and a state statute expressly exempts ERISA plans from a written-assent requirement for benefit-reducing modifications, the state-law requirement does not apply.
- A plan provision reserving an insurer/plan’s unilateral right to amend, conditioned on notice to the subscriber or employer/group leader, may be enforced according to its terms in an ERISA plan.
- A court may refuse to enforce an arbitration award on public-policy grounds only if the policy is well-defined and dominant, derived from positive law rather than general fairness concerns.
- Judicial review of arbitration awards under the Federal Arbitration Act is narrowly limited; absent a recognized statutory ground (e.g., corruption, fraud, evident partiality, or similar defect), courts will not overturn the award.

## Conclusion

The court enforced an ERISA plan amendment excluding liver-transplant coverage and confirmed the arbitration award because Utah’s mutual written-assent rule did not apply to ERISA plans, the plan reserved a unilateral right to amend with notice to the employer or subscriber, and no narrow statutory or public-policy basis justified vacatur.


Seymour v. Blue Cross/Blue Shield, 988 F.2d 1020 (10th Cir. 1993)