ERISA health care plans typically include reimbursement and subrogation clauses, which give plans a right to reimbursement of medical expenses paid on behalf of a beneficiary where the injury is caused by a third party. While such provisions are common in ERISA health care plans, they sometimes conflict with state laws that prohibit plans and
Subrogation/Reimbursement
Fifth Circuit Enforces Reimbursement Provision in One-Page Welfare Plan
By Tulio Chirinos on
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…
U.S. Supreme Court Holds ERISA Plan Cannot Enforce Equitable Lien Against Participant’s General Assets
By Joseph Clark on
Earlier today, the U.S. Supreme Court reversed a decision by the Eleventh Circuit and held that when a ERISA plan participant obtains a third-party settlement subject to a plan’s subrogation provision, and then dissipates the settlement on “nontraceable” items, the plan cannot enforce a lien against the participant’s general assets under Section 502(a)(3) of ERISA. …
Sixth Circuit Enforces Subrogation Clause
By Neil V. Shah on
The Sixth Circuit rejected a participant’s argument that the plan’s subrogation provision was not enforceable because it was only in the plan’s summary plan description, and not in the trust agreement that the participant argued was the operative plan document. The Court determined that the subrogation provision was contained within a document that served as…
Second Circuit Rejects Plan’s Claim For Reimbursement From Another Plan
By Aaron Feuer on
Where an ERISA plan specifically sets forth in the plan document its rights to reimbursement/subrogation vis-à-vis a plan participant then there is no requirement that recovery be conditioned on the plan being able to trace the recovered monies to the original benefit payment. Under such circumstances, the plan is considered to have an equitable lien…
Eleventh Circuit Enforces Subrogation Clause
By Lindsey Chopin on
The Eleventh Circuit recently concluded that Robert Montanile, a welfare plan participant, could not avoid reimbursing the National Elevator Industry Health Benefit Plan for benefits it paid on his behalf after he recovered from a third party tortfeasor. In so ruling, the Court rejected Montanile’s arguments that the plan’s reimbursement provision was not enforceable because…