Apr 10 2002
ERISA Update – Spring 2002 | Employee Benefits
Author(s): Blitman & King LLP
U.S. Supreme Court Says ERISA Doesn’t Authorize Repayment Lawsuit in Subrogation Case
When a Plan ‘s participant or a family member is injured in some way which will give rise to a personal injury action, a subrogation issue arises for self funded Health and Welfare Plans since almost without exception, participants’ turn to these Funds to pay their medical expenses in the same way that they would for any other injury. The purpose of third party liability and subrogation provisions in self-funded Plans is to assist the Plans’ participants in meeting their present medical expenses resulting from the injury while shifting the ultimate liability for payment of these medical expenses to the responsible party through litigation. Recoupment opportunities arise for plan fiduciaries when a covered person makes a recovery for the same injuries from that third party. However, on January 8, 2002, in GreatWest Annuitv & Life Insurance v. Knudson, 122 S. Ct. 708, the United States Supreme Court significantly limited plans’ ability to recoup these benefits in federal court.