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Hurry up and Spend the Money?

January 28, 2016

Authors

Jennifer Stokes

Hurry up and Spend the Money?

January 28, 2016

by: Jennifer Stokes

Money Money MoneyIt’s like a simple set of facts on a law school exam with an answer that defies logic. And, yet, Supreme Court precedent has brought us to this illogical conclusion. Facts: Participant agrees to reimburse the plan money it has spent on his medical care. Participant sets aside money to reimburse the plan, but then spends all of the money himself before reimbursing the plan. Question: If the money cannot be traced, can the plan recover the amount it is owed from the participant’s other assets? Answer: Last week, the Supreme Court ruled in Montanile v. Bd. of Trustees of the Nat’l Elevator Indus. Health Benefit Plan that a health plan cannot enforce an equitable lien against a participant’s general assets when the participant has already spent the fund

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Structuring a Settlement to Fund a Special Needs Trust May Not Work to Block ERISA Plan’s Recovery

June 28, 2013

Authors

benefitsbclp

Structuring a Settlement to Fund a Special Needs Trust May Not Work to Block ERISA Plan’s Recovery

June 28, 2013

by: benefitsbclp

In ACS Recovery Services, Inc. v. Griffin (2013 CA5), the Fifth Circuit recently allowed fiduciaries of an ERISA group health plan to seek reimbursement from a special needs trust established for a participant through a personal injury settlement.  The key to this decision was the court’s interpretation of the leading Supreme Court cases in this space – Great-West Life & Annuity Insurance Co. v. Knudson, 534 U.S. 204 (2002) and Sereboff v. Mid-Atlantic Medical Services, Inc. 547 U.S. 356 (2006).

In this case, Mr. Griffin was employed by FKI Industries and was a participant in its ERISA group health plan when he was injured in a car accident.  Mr. Griffin entered into a settlement with a third party for $294,440, but did not reimburse the ERISA group health plan for the $50,076 in medical expenses it paid.  After segregating attorneys’ fees, additional medical expenses and amounts for Mr.

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Supreme Court Rules that Equitable “Common Fund Doctrine” May Fill Gap in Plan Language

May 14, 2013

Authors

benefitsbclp

Supreme Court Rules that Equitable “Common Fund Doctrine” May Fill Gap in Plan Language

May 14, 2013

by: benefitsbclp

On April 16, 2013, the Supreme Court handed down its 5-4 decision in US Airways Inc. v. McCutchen, U.S., No. 11-1285, 4/16/13) ruling that while equitable principles cannot trump a plan’s unambiguous terms regarding reimbursement, such principles may aid in properly construing ambiguous or absent plan terms.  The majority opinion held that since the employer plan at issue was silent as to the allocation of attorneys’ fees following a participant’s third-party recovery, it was appropriate to use the equitable “common fund” doctrine (i.e., the doctrine which provides that a litigant (or a lawyer) who recovers a common fund for the benefit of persons other than himself or his client is entitled to a reasonable attorney’s fee from the fund as a whole) to fill that gap.  As discussed more fully below, this decision reminds plan sponsors to carefully craft their reimbursement language to help ensure the desired result.  It’s not

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11th Circuit: Claimant’s Attorney’s Protest Letter Doesn’t Constitute Administrative Appeal for Exhaustion Purposes

November 14, 2012

Authors

Bard Brockman

11th Circuit: Claimant’s Attorney’s Protest Letter Doesn’t Constitute Administrative Appeal for Exhaustion Purposes

November 14, 2012

by: Bard Brockman

The Eleventh Circuit Court of Appeals recently issued an opinion that provides guidance on what constitutes an appeal for purposes of exhausting administrative remedies under ERISA § 503.  In Florida Health Sciences Center, Inc. v. Total Plastics, Inc. (Nov. 6, 2012), the Court held that a participant’s written protest to the signing of a subrogation agreement did not constitute an administrative appeal of the plan administrator’s claim denial.  To read a copy of the Eleventh Circuit’s opinion, click here.

The case involves tragic facts.  Kristy Schwade’s infant son started to exhibit symptoms of “shaken baby syndrome” when he was five months old.  The cause of the condition was ultimately traced to a daycare provider, who later pled guilty to aggravated child abuse.  Doctors determined that the child had incurred catastrophic and permanent brain damage, which required hospitalization and continuous medical treatment.  The child later died at age four.

For

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