The Fifth Circuit upheld the reimbursement and subrogation terms found in a welfare benefit plan’s one-page SPD that also served as the plan document. Plaintiff, a plan beneficiary, received $71,644.77 from the plan to cover medical expenses incurred as a result of injuries sustained during a laparoscopic exam. Plaintiff’s injuries were allegedly the result of medical malpractice for which she received a settlement for more than the amount of her medical expenses. The plan sought to recover the $71,644.77 pursuant to the plan’s reimbursement and subrogation clause. Plaintiff refused and instead sought a declaratory judgment that she was not required to reimburse the plan because the plan did not have an ERISA-compliant written instrument in place when the plan paid the medical expenses. The plan countersued seeking reimbursement for the medical expenses and attorneys’ fees. Plaintiff first argued that in order for the plan to comply with ERISA it had to have both an SPD and a written instrument and provide detailed information on how the plan is funded and amended. The Fifth Circuit rejected both arguments explaining that: (i) plans commonly use a single document as both the SPD and written instrument and that the practice is widely accepted by courts; and (ii) the plan’s brief description of the funding and amendment procedures was sufficient to satisfy ERISA. The Court likewise rejected plaintiff’s argument that the plan misrepresented material facts because the SPD referenced a nonexistent “official plan document” noting that such an errant disclaimer does not rise to the level of misrepresentation that would invalidate a plan document. The case is Rhea v. Alan Ritchey, Inc. Welfare Benefit Plan., No. 16-41032 (5th Cir. May 30, 2017).
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