Husband of Neosho teacher who died from COVID-19 files lawsuit against district, insurance companies

Before Melissa Osborne contracted COVID-19 and died at age 40, she had taken steps to protect her family in case something happened to her, according to a lawsuit filed December 19 in Newton County Circuit Court.

Osborne, a counselor at Goodman Elementary School, who had previously taught at Benton, Carver and Goodman elementary schools in the Neosho R-5 School District, signed up for a life insurance plan with a $150,000 benefit May 12, 2021, with the policy scheduled to go into effect July 1.

On June 2, 2021, Osborne, using the online system that had just been provided for the school district's benefits plan, increased the insurance amount. The increase was acknowledged by the benefits management firm used by the district.

Two weeks later, when Osborne received her check from the district, the $98.63 premium for the life insurance had been deducted, according to the lawsuit, which was filed by her husband as executor of her estate.

But after Osborne's death, the lawsuit claims, the insurance company claims more paperwork was needed, a check for the $98.63 was returned to Osborne's husband, Matthew Osborne, with a notation that it was for a totally different insurance that had been terminated in 2019.

The lawsuit lists American Heritage Life Insurance Company, Insurance Benefits Consultants, LLC and the Neosho R-5 School District as defendants and claims the district was negligent in hiring Insurance Benefits Consultants (IBC) and hired the company "based on the familial relationship between its initial principals and employees and Superintendent of Neosho SD."

Tana Wise, the IBC customer service advocate/office manager who was handling the district's account and who acknowledged Osborne's acquisition of the policy, is Superintendent Jim Cummins' sister.

Osborne was diagnosed with a sinus infection July 2, 2021 and tested positive for COVID-19 the next day. Three days later, she was taken by ambulance to Freeman. On July 7, she was placed on a ventilator.

As her condition worsened, Matthew Osborne, who had concerns about her health insurance coverage, began reviewing her benefits and on July 18, noticed the word "pending"  and was told "Tana Wise was going to follow up with Melissa because she had chosen two life insurance policies and wanted to make sure that was her intent."

Osborne was told "Evidence of Insurability (EOI) may be required, "but was never provided further instruction despite continued follow-up calls."

Melissa Osborne died August 4, 2021.

When her husband followed up with Cummins about the policy, he was told "there should be no problem with the life insurance," according to the lawsuit. Osborne went to the ICI offices and was told by Jay Boice at IBC that he saw no reason why the insurance shouldn't pay out.

On February 16, 2022, American Heritage Life Insurance refunded the $98.63 premium saying that it was from a policy that had been terminated in December 2019 due to a "non-payment of premiums."

After the company was told it was mistaken, it wrote back, once again denying benefits and saying that no paper application had ever been received. Osborne said he and his wife had never been told by IBC that any paperwork was required and had said "her open enrollment in the various benefits was complete on May 12, 2021."

Osborne is suing American Heritage Life Insurance for breach of contract and vexatious refusal to pay, IBC for two counts of negligence and the Neosho R-5 School District for two counts of negligence.

Osborne is represented by Phillip Donald Greathouse of the Joplin law firm Warten, Fisher, Lee and Brown.