Adam V. Russo | November 18, 2009
When it is clear that the tort settlement proceeds are held in a separate account and the plan clearly provides for 100-percent reimbursement, the fact that the plan beneficiary is a minor child will not preclude the plan’s entitlement to reimbursement. The case is Iowa Health System, Inc. v. Graham, 2009 WL 2222780 (C.D. Ill., July 23, 2009). (more…)
Adam V. Russo | April 22, 2008
Just when it appears that a well-drafted subrogation and reimbursement provision of an ERISA group health plan takes precedent over state-law restrictions on the plan’s recovery, we find that the Supreme Court of Mississippi has ruled that ERISA does not preempt a state law that requires approval of a Mississippi court regarding the allocation of a minor’s settlement proceeds from a tort claim. The case is In re Guardianship of Danielle Holmes, 2007 WL 2792491 (Sup. Ct., Miss., Sept. 27, 2007).
Rashan Danielle Holmes, a minor, was injured in an auto accident. She was covered under her mother’s employer’s self-insured ERISA plan, which included a well drafted subrogation and reimbursement provision. The plan made an advance payment of about $46,000 toward her medical expenses. Her claim against a third party was settled for $750,000, the plan asserted a subrogation lien against the proceeds and the amount advanced pending settlement of its claim for reimbursement. (more…)
Adam V. Russo | January 22, 2008
An employee health and welfare plan appealed a Northern District of Georgia decision in favor of defendants: a minor, a conservator of the minor, and a bank, in its action seeking to enforce reimbursement provisions of its ERISA Plan. The insured settled a personal injury suit and received funds from a liable third party. The Plan, which had previously paid the minor insured’s medical expenses, included provisions in the Plan Document identifying funds paid by the Plan as separate from the insured’s assets, and asserting a trust and equitable lien over settlement proceeds.
The Eleventh Circuit Court of Appeals found that the Plan properly sought under ERISA § 502(a)(3) equitable restitution of a specifically identifiable fund in possession of defendants, since it asserted title and right to possession of the particular property, identified as being in the hands of the conservator. The money held in trust by the conservator had been identified as belonging in good conscience to the fiduciary by virtue of the plan’s terms, and the money could be clearly traced to a particular fund in defendants’ possession. The fact that the conservator held the funds as a third party did not defeat the fiduciary’s claim because the settlement funds were intact and constituted an identifiable res that could be restored to its rightful recipient. SEE ENTIRE CASE
Adam V. Russo | November 13, 2007
In the case of Bauhaus USA, Inc. v. Lillie Regina Holmes Copeland, et. al., 2007 Miss. LEXIS 545 (September 27, 2007), a self-funded Plan coming under the purview of ERISA sought reimbursement of claims it had paid on behalf of a minor child. The court took possession of funds in order to create a trust and use the funds to protect the minor. (more…)
