cmonfils | January 31, 2012
Coordination Of Benefits January 2012 Vol. 20 No. 1
In a surprising decision, the 3rd U.S. Circuit Court of Appeals used the concept of “appropriate equitable relief” to restrict an employer sponsored health plan’s recovery from a third-party settlement to less than what the plan paid out in health benefits. In US Airways, Inc. v. McCutchen, the appeals court held that full reimbursement of expenses to the employer-sponsored health plan would be “inappropriate and inequitable relief.” Full recovery would constitute unjust enrichment for the plan because: (1) the plan participant’s recovery ended being less than what the plan paid after attorney’s fees were deducted; and (2) the plan never intervened in the third-party recovery. The appeals court held these facts overruled the fact that the plan had subrogation reimbursement provisions asserting recovery rights over any monies collected from a third party, and it overturned a lower court’s decision requiring the participant to pay the plan the whole amount. (more…)
Category: 3rd, ERISA, Self-Funding, Supreme Court |
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cmonfils | January 18, 2012
Employer’s Guide to Self-Insuring Health Benefits January 2012 | Vol. 19, No. 4
In a surprising decision, the 3rd U.S. Circuit Court of Appeals used the concept of “appropriate equitable relief” to restrict an employer-sponsored health plan’s recovery from a third-party settlement. Full reimbursement of what the plan paid out would have been “inappropriate and inequitable,” even though the plan had asserted recovery rights over any monies collected from a third party. Full recovery would have been unfair because: (1) the plan participant’s recovery ended up being less than what the plan paid after attorney’s fees were deducted; and (2) the plan never intervened in the third-party recovery. The outcome diverges from many recent cases, which upheld plans’ claims on total proceeds, regardless of whether the plan participant was “made whole” or had money to pay attorney’s fees. (more…)
Category: 3rd, Common Fund, ERISA, Pennsylvania, Reimbursement, Subrogation, Third Party Agreements |
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cmonfils | January 8, 2012
www.myhea;thguide.com
MyHealthGuide Source: Scott Cooper, Attorney, SchmidtKramer Injury Lawyers1/6/2012, Injury BlogNetwork Blog Entry
Case: Bieber v. Nace, 2011 WL 6180719 (M.D.Pa. 12/13/2011). Court Ruling
The federal court for the Middle District of Pennsylvania in Harrisburg recently addressed an issue regarding the recovery of special damages in a MMotion in Limine (request of ruling) in the above case. The Plaintiffs filed a suit arising out of a car accident and their resultant injuries. (more…)
Category: 3rd, ERISA, Self-Funding |
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cmonfils | January 3, 2012
Employer’s Guide to Self-Insuring Health Benefits December 2011 | Vol. 19, No.3
The attempted treatment of stop-loss coverage as “health insurance” subject to state insurance law has been a thorn in the sides of self-funded plans seeking to maintain ERISA preemption of state insurance laws.
In Goyen v. Vail Corp., 2011 WL 4479091 (D. Colo., Sept. 26, 2011), a federal district court rejected a plaintiff’s argument that a plan stopped being self-funded and lost ERISA preemption, all because it had taken out a stop-loss policy. (more…)
Category: 3rd, 6th, ERISA, Preemption, Self-Funding, Stop Loss |
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cmonfils | December 27, 2011
On November 16, 2011, a panel of the Third Circuit Court of Appeals decided US Airways v. McCutchen, No. 10-3836, 2011 U.S. App. LEXIS 22883 (3d Cir. Nov. 16, 2011). The Court claims to respond to the Sereboff court’s argument left open by footnote two in the Supreme Court’s decision in Sereboff v. Mid-Atlantic, which the Court declined to address because it was not raised in the district court or the Fourth Circuit: “…even if the relief Mid Atlantic sought was ‘equitable’ under § 502(a)(3), it was not ‘appropriate’ under that provision in that it contravened principles like the make-whole doctrine.”
Category: 3rd, ERISA, Subrogation |
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cmonfils | December 13, 2011
www.myhealthguide.com
MyHealthGuide Source: Todd Leeuwenburgh, Editor, Employer Health Benefits, Thompson Publishing Group, 12/9/2011, www.Thompson.com
Case: US Airways, Inc. v. McCutchen, 2011 WL 5557411 (3rd Cir., Nov. 16, 2011)
Editor’s Note: In the11/28/2011 of this Newsletter, we published a review of this case by Agnes Mendoza-Ben-Yosef, BNA Pension & Benefits Daily Article via The Gibson Firm, LLC. We are now providing another view by Mr. Leeuwenburgh. (more…)
Category: 3rd, Reimbursement |
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cmonfils | December 12, 2011
Apparently, inspired by the recent Supreme Court decision in CIGNA v. Amara, the Third Circuit has held that the “appropriate equitable relief” qualifier in the grant of civil remedies under ERISA’s Section 501(a)(3) allows for the application of equitable defenses to plan reimbursement claims in – shall we say – “appropriate” situations. (I reviewed the lower court’s opinion previously.)
Category: 3rd, Subrogation |
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cmonfils | December 2, 2011
Applying the traditional equitable principle of unjust enrichment, we conclude that the judgment requiring McCutchen to provide full reimbursement to US Airways constitutes inappropriate and inequitable relief. Because the amount of the judgment exceeds the net amount of McCutchen’s third-party recovery, it leaves him with less than full payment for his emergency medical bills, thus undermining the entire purpose of the Plan. At the same time, it amounts to a windfall for US Airways, which did not exercise its subrogation rights or contribute to the cost of obtaining the third-party recovery. Equity abhors a windfall. See Prudential Ins. Co. of America v. S.S. American Lancer, 870 F.2d 867, 871 (2d Cir. 1989).
Category: 3rd, Subrogation |
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cmonfils | November 30, 2011
The US Court of Appeals for the Third Circuit held that, under ERISA Section 502(a)(3), an employee benefit plan was not entitled to full reimbursement for medical expenses it incurred on behalf of a participant and was limited by equitable principles and defenses to “appropriate” relief, despite plan language specifying full reimbursement. In its decision in US Airways v. McCutchen, the court held that the plan could not recover the full cost of the participant’s medical expenses when the participant recovered less from a third party.
Category: 3rd, ERISA, Reimbursement |
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cmonfils | November 30, 2011
In a case of significant importance for plan sponsors and fiduciaries, the U.S. Court of Appeals for the Third Circuit held in US Airways, Inc. v. McCutchen, No. 10-3836 (3d Cir. Nov. 16, 2011), that an employee benefit plan was not entitled to full reimbursement of medical expenses it paid to a participant even though the plan provided that the participant was required to reimburse the plan for all amounts paid “out of any monies recovered from a third party.” The Court found that, because the participant had not received a complete recovery for his injuries in collateral litigation, full reimbursement to the plan would not be consistent with the terms of Section 502(a)(3) of the Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1132(a)(3), which limits recovery to “appropriate equitable relief.”
Category: 3rd, ERISA, Reimbursement |
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cmonfils | November 29, 2011
www.myhealthguide.com
MyHealthGuide Source: Agnes Mendoza-Ben-Yosef, 11/17/2011, BNA Pension & Benefits Daily Article via The Gibson Firm, LLC
Case: US Airways Inc. v. McCutchen, 3d Cir., No. 10-3836, 11/16/11. Court’s Opinion
Article referred by John H. Eggertsen, Esq., Eggertsen Consulting, P.C.
US Airways Inc.’s health benefit plan is not entitled to full reimbursement from an insurance settlement for the medical costs it paid on behalf of a plan participant because the recovery would exhaust the participant’s entire settlement, the U.S. Court of Appeals for the Third Circuit ruled Nov. 16 in the above case. (more…)
Category: 3rd, ERISA, Reimbursement |
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cmonfils | November 29, 2011
THIRD CIRCUIT HOLDS THAT ERISA PLANS REIMBURSEMENT CLAIMS ARE SUBJECT TO EQUITABLE DEFENSES AND LIMITATIONS
On November 16, 2011, the Third Circuit held in US Airways, Inc. v. McCutchen, that an ERISA plan’s claims for reimbursement under ERISA §502(a)(3) are subject to equitable limitations and defenses. The matter involved a self-funded ERISA plan which had paid $66,866 on behalf of a plan participant who was injured in an automobile accident. (more…)
Category: 11th, 3rd, 8th, 9th, ERISA, Reimbursement |
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cmonfils | November 20, 2011
Employer’s Guide to Self-Insuring Health Benefits
Thompson Publishing November 2011 Vol. 19, No. 2
The federal agencies in charge of implementing health reform and the National Association of Insurance Commissioners (NAIC) keep saying stop-loss policies with low attachment points mean an employer-sponsored health plan is really not self-funded. Contributing Editor Adam V. Russo and Attorney Ron Peck say that NAIC experts are trying to reduce the number of employers that choose self-funding because they: (1) want to force more healthy employees into state-run insurance exchanges; and (2) feel that if they can’t regulate ERISA plans, ipso facto, consumers are put in danger. In doing this they are ignoring a tidal wave of legal precedent holding that self-funded health plans remain that way regardless of the kind of stop-loss insurance the sponsor chooses. Eliminating the option to purchase stop-loss for smaller groups would raise health insurance costs for everybody, Russo and Peck say. (more…)
Category: 3rd, 4th, 5th, 7th, 9th, DOL, ERISA, Health Insurance, HHS, PPACA, Self-Funding, Stop Loss |
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Adam V. Russo | July 9, 2010
In considering the administrative record in ERISA benefits cases, courts this year addressed both what must be included in the administrative record and the admissibility of its contents. In Nally v. Life Insurance Co. of North America, plaintiff argued her deceased husband’s employee benefit plan impermissibly relied on evidence such as police and expert reports that would not be admissible under the Federal Rules of Evidence or the Supreme Court’s decision in Daubert v. Merrell Dow Pharmaceuticals. The Third Circuit held that when the plan gives the plan administrator discretion to construe and interpret the plan, evidence in the administrative record is admissible “for the purpose of determining whether the administrator’s review was arbitrary and capricious.”48 The court further noted that plaintiff failed to point to any legal support for her assertion that a plan administrator deciding a claim for benefits could only consider evidence that would be admissible in a district court proceeding.
Category: 3rd, Exclusion |
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Adam V. Russo | May 12, 2010
Underpayment of a benefit constitutes a repudiation of full benefits and triggers the statute of limitations. Id. at 521. The record is clear that the plaintiff was well aware of the underpayment more than four years before filing suit, as evidenced by a number of letters between the defendant and Mr. Bryer’s then-counsel, culminating in the letter of March 4, 2005, appealing the denial of increased benefits. (more…)
Category: 3rd, Federal Circuits, Health Care Legislation |
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