Employee of Union Public Schools is enrolled in a health plan that is self insured through the School district. Can I make a bad faith case against district for failure to timely pay claims?
Answer: This will be tough. The third-party administrator will owe a duty of good faith and fair dealing only if the TPA is really heavily involved in the insurance program in the sense of participating financially in insuring the risk. See: Wathor v. Mutual Assurance Administrators, Inc., 2004 OK 2, 87 P.3d 559. As for the district itself, Fehring v. State Ins. Fund, 2001 OK 11, 19 P.3d 276 seems to say the Governmental Tort Claim Act precludes your bad faith claim; if the district employees acted in bad faith, they are automatically outside the scope of their authority so there could be no liability of the governmental entity for insurance bad faith.