cmonfils | March 23, 2012
Most ERISA welfare benefit plans have provisions that allow the plan to recoup amounts of medical expenses it paid to participants or beneficiaries for injuries or illnesses caused by third parties (such as those sustained in automobile accidents), where the participant obtains a recovery from the third party. Often, an ERISA plan member will argue that such reimbursement is not required unless the member was “made whole” by the third-party recovery, that is, where the recovery fully compensates the member for his or her injuries, after all deductions are made (including for attorneys’ fees). Plans often draft around such arguments by requiring reimbursement regardless of whether the plan member was made whole.
Category: ERISA, Made Whole Rule, Reimbursement |
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cmonfils | July 27, 2011
Facts:
Participant of an ERISA covered Plan had an accident and filed an action in Wisconsin wherein he named the Plan as a defendant and disputed Plan’s rights under the Made Whole Rule. Plan then filed a cross claim against defendant parties and a counter claim against member asserting made whole inapplicable due to plan language. Plan participant settled with defendant party including a surgery he consistently related to the accident and never advised plan of settlement negotiations. Subsequent to that settlement, he claimed there was an IME showing the surgery was not related to the accident. (more…)
Category: 7th, Made Whole Rule, Wisconsin |
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cmonfils | July 11, 2011
Matthiesen, Wickert & Lehrer, S.C. June 2011 Newsletter
By Ryan L. Woody
The Northern District of California recently came out with a surprisingly subrogation-friendly decision regarding application of the Made Whole and Common Fund Doctrines. In Aetna Life Ins. Co. v. Kohler, 4:11-CV-004390CW (N.D. Cal., May 23, 2011) an ERISA-sponsored Plan sought reimbursement from a husband and wife who settled their personal injury lawsuit. (more…)
Category: California, Common Fund, Made Whole Rule |
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cmonfils | July 11, 2011
The Subrogator Spring/Summer 2011
By Kammy Poff, Allstate Insurance Company, Roanoake, VA and Daran Kiefer, Kreiner and Peters Co., LPA, Cleveland, OH
Bills/Legislation
In February of this year, the National Association of Subrogation Professionals (NASP) embarked on a trip to Pierre, South Dakota. House Bill 1184 had just passed in the South Dakota House of Representatives and was on its way to the Senate. NASP was slated to testify before the Senate Judiciary Committee. House Bill 1184 needed to be stopped in the Senate. (more…)
Category: Made Whole Rule, New Hampshire, New Jersey, Oregon, Pennsylvania, South Dakota, Workers' Compensation |
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cmonfils | May 3, 2011
Coordination of Benefits April 2011 | Vol. 19, No. 2
As we know, self-funded health plans subject to ERISA usually provide that their right to reimbursement is not subject to the make-whole rule. Federal courts have ruled that in the absence of a plan provision to the contrary, federal common law will impose the makewhole rule when the plan seeks reimbursement. For that reason, virtually all ERISA health plans today specifically provide that they are entitled to reimbursement of benefits paid even if the plan participant is not made whole. (more…)
Category: Georgia, Made Whole Rule, Self-Funding |
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cmonfils | May 3, 2011
Coordination of Benefits April 2011 | Vol. 19, No. 2
Three major rules limit group health plans’ right to seek reimbursement of health benefits they paid from tort settlement proceeds. They are: (1) the make-whole rule, which precludes the plan’s right to reimbursement if the plan participant is not “made whole” by the tort settlement; (2) the common fund rule, which requires the plan to bear a pro rata share of attorney’s fees and court costs while partaking of the “common fund” created by the settlement; and (3) the collateral source rule, which allocates the tortfeasor’s liability for damages to either the plan participant or the plan, but not to both of them. Contributing Editor Jack Helitzer reports on cases dealing with each of these rules. Ill-conceived plan documents in one case and a court that failed to observe Supreme Court precedent in another hurt plans. Only one of the three (enabling a plan to intervene and introduce health care data in a tort case) had a favorable result for the plan. (more…)
Category: Collateral Source Rule, Common Fund, Made Whole Rule, Subrogation |
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cmonfils | April 12, 2011
www.subrogation.org
The Arkansas Worker’s Compensation Law was enacted in 1948 and Arkansas Senate Bill 778 seeks to return the worker’s compensation system to the legislature’s original intent and design. The statutory intent of the law has been eroded by the commission and the courts. (more…)
Category: Arkansas, Made Whole Rule, Subrogation |
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cmonfils | March 29, 2011
Matthiesen | Wickert| Lehrer, S.C March 2011 Newsletter
By Melissa M. Stone
For a second consecutive year, South Dakota has defeated an attempt to introduce “Made Whole” legislation into the insurance subrogation arena. The “Made Whole” Doctrine is an equitable defense to the subrogation or reimbursement rights of a subrogated insurance carrier or other party, requiring that before subrogation and/or reimbursement will be allowed, the insured must be made whole for all of its damages. Precisely what being “made whole” means varies from state to state, but the concept is, nonetheless, fairly similar in each state. A well-respected legal treatise defines the Made Whole Doctrine as follows: (more…)
Category: Made Whole Rule, South Dakota |
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cmonfils | January 25, 2011
www.nasp.com
Oregon—Senate Bill 372
The Oregon Senate has just introduced a bill that attempts to codify the “made whole” doctrine for personal injury protections (“PIP”) benefits. As we have witnessed in many other states, the language in the bill is unclear, vague and confusing.
Oregon’s current law, ORS 742.544, allows for a property and casualty carrier to be reimbursed for personal injury protection benefits only if the recovery exceeds “economic” damages. The proposed amendment would remove the word “economic” from the current law as follows: (more…)
Category: Made Whole Rule, Oregon |
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Adam V. Russo | August 25, 2010
Coordination of Benefits Handbook
The government has yet to sort out the conflicting interests involved in subrogation/reimbursement dispute. Because there will be no reform body directly creating subrogation/reimbursement rules, the matter remains one of balancing various laws. For instance, laws in many states limit plans’ ability to recover health expenses based on the “make-whole,” “collateral source” and “common fund” rules. States have an interest in: (1) keeping the cost of auto liability insurance low; (2) ensuring that wrongdoers pay full damages; and (3) making sure attorneys are paid for representing clients. These are at odds with the federal government’s goal of keeping the cost of health coverage reasonable. It remains to be seen if the federal government will try to resolve this through preemption of state laws beyond self-funded ERISA plans.
Category: Attorneys' Fees, ERISA, Made Whole Rule, Preemption, Subrogation |
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Adam V. Russo | August 25, 2010
By Jack B. Helitzer, Esq., Coordination of Benefits Handbook
The federal health care reform law attempted to address two major problems with health coverage in the United States; (1) expansion of coverage to the uninsured; and (2) reducing overall health care costs. Most reform provisions won’t take effect for at least a few years. That’s because time is needed to develop regulations dealing with the vast scope and complexity of those problems, and because of the need to phase in increased costs that reform will cause in its early years. That means we really won’t know whether or not the law will achieve either goal, or even if it will survive the current complex political situation. (more…)
Category: ERISA, Health Care Legislation, Made Whole Rule, Preemption, Subrogation |
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Adam V. Russo | August 25, 2010
Coordination of Benefits Handbook
Victims of accidents in subrogation/reimbursement cases have emotional appeal when they argue that tort settlements are reduced without some consideration of the fact that they were not “made whole” or had their recoveries diminished by not requiring a recovering plan to share the legal fees they incurred in making the settlement. There can be cases where the amount of the tort settlement seems to include significant amounts to reimburse losses beyond actual medical expenses incurred by the plan participant and paid by the ERISA plan. In this case, the 11th Circuit upheld an earlier ruling allowing the plan to recover the full amount it paid to a participant who received a much larger settlement. The decision was unusual in the clarity of its explanation of why the subrogation was in fact equitable. The plan gained an advantage by becoming involved in the tort settlement early enough to ensure a separate and identifiable portion of the settlement was set aside. (more…)
Category: 11th, ERISA, Made Whole Rule, Stop Loss, Subrogation, Summary Plan Description |
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Adam V. Russo | August 25, 2010
Coordination of Benefits Handbook
Although federal case law is well settled on the principle that an ERISA health plan is entitled to reimbursement of benefits paid from tort settlement proceeds that are clearly identified as such, it appears that attorneys for plan participants still come up with several arguments seeking to avoid such liability. Those arguments often rely on state statutes, but they often raise other issues. A recent decision by a U.S. District Court in Georgia in favor of the plan’s right to reimbursement indicates how modern federal courts dispose of those arguments. The case is Brown & Williamson Tobacco Corp. v. Collier, 2010 WL 1487772 (M.D. Ga., April 13, 2010). (more…)
Category: ERISA, Georgia, Made Whole Rule, Subrogation, Summary Plan Description |
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Adam V. Russo | June 17, 2010
Texas Health Insurance Risk Pool v. Sigmundik, 2010 WL 2136625 (Tex. 2010)
The self insured industry got a big subrogation win. In a very pro-subrogation opinion, the Texas Supreme Court declared that a trial court abuses its discretion when it invokes the equitable “Made Whole” Doctrine to circumvent a party’s contractual right to subrogation. The Court went even further and said that a trial court may not cut a party out of a settlement where the settlement purports to resolve that party’s claim, and the party participated in the proceedings and requested an allocation.
Category: Made Whole Rule, Supreme Court, Texas |
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Adam V. Russo | June 15, 2010
As you know, the recent Fortis case in Texas said that if a plan document excludes made whole rule (and presumably, other equitable doctrine such as the common fund doctrine), the contract language trumps the equitable doctrine.
The Texas Supreme Court recently struck another big victory for subrogation in its Health Insurance Risk Pool v. Sigmundik, 2010 WL 2136625 (Tex. 2010), case. In a powerful, pro-subrogation opinion, the Court declared that a trial court abuses its discretion when it invokes the equitable doctrine to circumvent a party’s contractual right to subrogation.
Basically, under Texas State law, if the plan language says made whole doesn’t apply… it doesn’t apply! We also feel strongly that these cases can be used to counter common fund arguments as well.
Category: Made Whole Rule, Texas |
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