Archive for the ‘Standings’ Category

There is a recent newsworthy item that I wish to discuss, as it is pertinent to our industry.  The November 20, 2007 Wall Street Journal featured an extremely negative cover story, relating to the self-insured industry’s subrogation activities under ERISA.  These types of prominent news stories do nothing for the self-insured industry except motivate the public to change current ERISA legislation.  For those of you who do not know about this case, the story covers a woman’s collision with a semi-trailer truck seven years ago, leaving the 52-year-old Deborah Shank permanently brain-damaged and in a wheelchair. Her husband, Jim, received a $700,000 accident settlement from the trucking company involved. After legal fees and other expenses, the remaining $417,000 was put in a special trust to be used for Mrs. Shank’s care.  Read more

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. Read more

The Southern District Court of Indiana held on February 8, 2007 in South Central Indiana School Trust v. Virginia Poyner, 2007 U.S. Dist. LEXIS 9368, that “in Sereboff, the Supreme Court held that Great-West did not apply to a situation where the third-party proceeds were segregated and hence “specifically identifiable.” Sereboff, 126 S.Ct. at 1874. Rather, such a claim for recovery was for enforcement of an equitable lien. Id. at 1874-75. And, going a step further, the Court said that where, as here, there is an equitable lien by agreement, there is no necessity that the funds even be specifically traced. Id. at 1875. According to the Court, the effort to recover such an agreed preexisting lien is equitable in nature.” Read more

In this case, an employee of a company with a self funded ERISA plan was receiving benefits due to her disabled status. The TPA hired a physician to re-examine the employee, and based on her diagnosis, terminated benefits. The physician determined that the employee could perform sedentary work, which meant she was no longer “disabled” in accordance with the terms of the plan. The TPA had, after the physician’s diagnosis was complete, obtained two more evaluations. The three tests (IME, Functional Capacity Evaluation, and Employability Assessment) were all performed by different parties, and all supported the plan’s decision. The employee, meanwhile, did not argue that the tests should be ignored, and instead presented a letter from her treating physician, diagnosing her as disabled, but lacking an explanation or evidence to support the designation. Upon review, the court found in the plan’s favor. Read more

In March of 2005, Poyner was injured when an automobile struck her while she was riding her bicycle and received nearly $ 200,000.00 in medical benefits. Subsequently she recovered $ 10,000.00 from the insurer of the automobile which struck her and $100,000.00 from her own under insured motorist coverage. The Plan attempted to persuade Poyner to abide by the terms of the benefit plan, which required her to pay the Plan the $110,000.00 she collected from the two insurance policies. Poyner asserted that ERISA prohibits anything other than an equitable remedy in such a situation and the Trust’s claim was one for money, not an equitable remedy. Read more

This case arose from a Plan’s failure to add an employee’s dependents to an ERISA welfare benefit plan. As a benefit of employment, the employer offered its employees health insurance. Under the Plan, the employer was both a “participant” and the “Plan Administrator.” Employees were instructed to direct their inquiries about the Plan to their employer, which acted as the general intermediary between its employees and the Insurer. Read more

Section 502(a)(3)(B) of ERISA permits a fiduciary to bring a civil action “to obtain equitable relief to enforce the terms of the plan”. To obtain this “equitable relief,” the basis for the fiduciary’s claim and the relief it seeks must be equitable in nature. Importantly, a fiduciary cannot seek to impose personal liability, as that would be a legal remedy. The Policy in this case required repayment of an overpayment of benefits that resulted when a claimant received benefits in the amount of $ 19,612. The Plan requested reimbursement and the beneficiary refused, stating that she no longer had any of the funds. Read more