Many involved in the administration of ERISA Plans do not realize that some state insurance law is preempted even when a fully insured ERISA Plan is involved.
In Spellman v. United Parcel Service, 540 F. Supp.2d 237 (D.C. Maine 2008), the Court addressed an issue of enforcing Maine’s workers’ compensation statutes with regards to health plans under ERISA. Read more
Shelby County Healthcare Corp, d/b/a Regional Medical Center v. The Majestic Star Casino, LLC group Health Benefit Plan, 2008 WL 782642 (WD Tenn.) has demonstrated that even though the SPD gives the Plan the final decision to accept or deny medical claims, discretion does not apply to the Plan’s TPA.Damon Weatherspoon, a plan participant of the Majestic Star Casino LLC Group Health Benefit Plan was involved in a single vehicle accident and sustained over $400,000 in medical expenses at the Regional Medical Center. Reports indicated that Weatherspoon had violated Mississippi law by driving under the influence, driving without a valid Mississippi driver’s license and driving without insurance. Read more
U.S. District court Judge Harold Baer has ruled that Allianz S.E. is primarily entitled to recoveries from third parties found liable for damages from the Sept.11, 2001 terrorist attacks. World Trade Center leaseholder Silverstein Properties Inc. challenged the ruling claiming that the $433 million settlement of the $3.55 billion property limit from Allianz S.E. last year was insufficient. Read more
A vast difference between the two Presidential candidates is the role of the U.S. government providing health insurance coverage.
Senator Obama promotes a national policy that supports individuals and small employers. Obama would rely much more on government mandates in which income based federal funding would be provided to help assure expansion on coverage. In this plan, employers would have to either provide health insurance coverage to its employees or pay into a national plan that would be available to individuals not covered by employee plans. Regardless of which direction would choose, they would also benefit from a new federal health reinsurance program in which the government would take on liability for catastrophic loss in health care claims. Read more
California
The California Assembly Health Committee recently passed a series of bills that will mandate expansion of specific benefits and health services for insurers. Benefits and services include mental health coverage (AB1877), screening and diagnostic test for gynecological cancer (AB1774), HIV testing (AB1894), maternity health care (AB1962), and breast cancer screening (AB 2234). Insurance plans opposing bills argue that e increasing costs of the proposed mandates would total an estimated $2.7 billion annually and that 85,000 Californians would lose health insurance coverage because of the consequential higher premium costs. Read more
Colorado:
June 5, 2008, Colorado Governor, Bill Ritter approved Senate Bill 11, abolishing subrogation for all medical payment coverage under auto insurance policies to be in effect of January 1, 2009. The new Colorado law will be in effect as of January 1, 2009. Read more
Cooper v. Premera Blue Cross, Slip Copy, 2008 WL 2180148 (W.D.Wash.) (May 23, 2008) addresses a risk often overlooked by plan participants when debating over their benefit plan’s right of reimbursement from other liable insurance carriers.
Cooper suffered multiple injuries while he was a passenger involved in an ATV accident and applied for benefits through his own auto carrier, Allied Insurance, because the driver’s vehicle was uninsured. Cooper received $64,200 for medical expenses and lost wages through his PIP and UM coverage. Read more
A Federal Court of Appeals verdict reversed the decision of both Wisconsin arbitrators and the Federal District Court in Edstrom Industries Inc. v. Companion Life Insurance Co., No. 07-2165, where the arbitrator and trial court failed to apply Wisconsin law holding that stop-loss insurance is not considered to be “reinsurance”.
Wisconsin Federal District Court sustained an arbitrator’s decision in a stop loss case between the group Edstrom Industries and its stop loss carrier. The arbitrator had ruled in favor Of Companion Life, holding that Edstrom failed to disclose information to its stop-loss carrier, Companion Life, concerning a seriously ill dependent child. Read more
Magellan Services v. Highmark Life Insurance Company, - N.W.2d –, 2008 WL 2221979 (Iowa) (May 30, 2008) brought forward a dispute about coordination of benefits against an ERISA preemption of state regulation of a self-funded health plan based upon the presence of stop loss coverage. Read more
In July of 2006 the San Francisco Health Care Security Ordinance (”the Ordinance”) allowing the city to mandate employers with more than 50 employees to pay a fee to help cover their employee health care costs was unanimously passed by the San Francisco Board of Supervisors.
On December 26, 2007, the U.S. District Court for the Northern District of California, ruled in favor of The Golden Gate Restaurant Association’s (GGRA) application, contending that ERISA preempted the Ordinance. Read more
The Wisconsin Supreme Court held in Muller v. Society Insurance Co., decided May 30, 2008, that when an insured and an insurer separately settle claims with a responsible third party, the insured may not seek to recover funds obtained by the insurer from the insurer, even if the insured wasn’t “made whole” by their settlement. Read more
In the case of Graphic Communications National Health and Welfare Fund v. Tackett, 2008 WL 2020504 (S.D.Ill.) (May 09, 2008), the District Court held that workers’ compensation awards are subject to ERISA plan reimbursement rights, to protect the Plan and the plan participants and prevent undue cost shifting.
Roy F Harmon III tells us the story of an employee injured at work, who files with the workers’ compensation carrier, and whose claim is denied by the carrier. The employee files with the health plan, advising them of the carrier’s denial, and the Plan dutifully pays the claims. Only then does the employee retain and attorney, appeal the carrier’s denial, and obtain settlement funds from the workers’ compensation carrier. http://healthplanlaw.com/?p=627#more-627 Read more
In two separate cases, courts have found that health plans may refuse to pay benefits if participants or their attorneys refuse to sign reimbursement agreements. Some attorneys refuse to sign such agreements because they believe the plan is not entitled to fulfill reimbursement under applicable law. However, in many cases, the plan then refuses to pay any further benefits. The two cases are Cossey v. Associates Health and Welfare Plan, 2008 WL 276282 (E.D. Ark., Jan. 30, 2008) and Metal Technologies v. Ramirez, 2008 WL 153534 (E.D Wis., Jan 11, 2008). Read more
With the U.S. Supreme Court decision in Sereboff v. Mid Atlantic Medical Services, Inc., it became clear that ERISA plans can enforce their subrogation and/or reimbursement provisions by asserting a claim for a constructive trust or equitable lien against clearly identifiable tort settlement or judgment proceeds. In most instances, those proceeds end up either in the plan participant’s attorney’s escrow or trust accounts or are held by a court if the third party’s casualty insurer deposits the funds there. Read more
ERISA did not preempt a Louisiana Department of Insurance directive that limits insurer’s subrogation and reimbursement rights to cases where covered individuals have been “made whole”, the 5th U.S. Circuit court of Appeals ruled in Benefit Recovery Inc. v. Donelon, 2008 WL 642972 (5th Cir. March 11,2008). Read more