Presenting a live 90-minute webinar with interactive Q&A Resolving ERISA Liens and Reimbursement Claims in Personal Injury Cases Maximizing Settlement Awards by Narrowing Claims and Challenging Unreasonable Charges; Effect of Montanile on ERISA Plan Rights WEDNESDAY, SEPTEMBER 7, 2016 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific Today’s faculty features: Franklin P . Solomon, Founding Partner, Solomon Law Firm , Cherry Hill, N.J. David L. Place, JD, Vice President, Director of Lien Resolution Services, Synergy Settlement Services , Culpeper, Va . The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10 .
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RESOLVING ERISA LIENS AND REIMBURSEMENT CLAIMS IN PERSONAL INJURY CASES STRAFFORD WEBINARS SEPTEMBER 7, 2016 Franklin P. Solomon • Cherry Hill, NJ
ERISA 6 Employee Retirement Income Security Act of 1974
ERISA Liens? 7 THERE IS NO SUCH THING AS AN “ERISA LIEN” • ERISA is silent on liens and creates no reimbursement rights for employee benefits plans • Almost every health plan issued as an employee benefit is subject to ERISA – but some are not.
ERISA Coverage 8 ERISA applies to: any employee benefit plan if it is established or maintained-- (1) by any employer engaged in commerce or in any industry or activity affecting commerce; or (2) by any employee organization or organizations representing employees engaged in commerce or in any industry or activity affecting commerce; or (3) by both. 29 USC Sec. 1003(a)
ERISA Exclusions 9 ERISA specifically excludes from coverage: any employee benefit plan if-- (1) such plan is a governmental plan .... (2) such plan is a church plan .... (3) such plan is maintained solely for the purpose of complying with applicable workmen's compensation laws or unemployment compensation or disability insurance laws; (4) such plan is maintained outside of the United States primarily for the benefit of persons substantially all of whom are nonresident aliens; or (5) such plan is an excess benefit plan and is unfunded. 29 USC Sec. 1003(b)
“Governmental Plan” 10 Federal government (e.g., FEHBA, Tri-Care) State & municipal government Railroad Retirement Act Indian tribal government where substantially all work is in essential governmental functions, not in commercial activities 29 USC Sec. 1002 (32)
“Church Plan” 11 “Church plan” is a plan maintained by an organization to provide employee benefits if such organization is controlled by or associated with a church. “Employee of a church ” includes an employee of an organization which is exempt from tax under section 501 of the IRC and which is controlled by or associated with a church. 29 USC Sec. 1002 (33) May include hospitals, nursing homes, schools, colleges, etc.
ERISA PREEMPTION 12 EXPRESS PREEMPTION: ERISA §514 COMPLETE PREEMPTION: ERISA §502
ERISA § 514(a): Preemption clause 13 ... [T]he provisions of this subchapter and subchapter III of this chapter shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan ...
ERISA § 514(b)(A): “ Savings ” clause 14 ... [N]othing in this subchapter shall be construed to exempt or relieve any person from any law of any State which regulates insurance, banking, or securities
ERISA § 514(b)(B): “ Deemer ” clause 15 Neither an employee benefit plan ... nor any trust established under such a plan, shall be deemed to be an insurance company or other insurer, bank, trust company, or investment company or to be engaged in the business of insurance or banking for purposes of any law of any State purporting to regulate insurance companies, insurance contracts, banks, trust companies, or investment companies.
FMC Corp. v. Holliday , 498 U.S. 52 (1990) 16 Insured plans indirectly regulated by state law regulating the plans ’ insurers Self-funded plans exempt from state insurance regulation; not altered by state law What’s a self -funded plan? Look at each plan component Stop-loss insurance?
ERISA § 502: Civil enforcement 17 A civil action may be brought by: 502(a)(1)(B): a participant or beneficiary to recover benefits due under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify rights to future benefits under the terms of the plan; 502(a)(3): by a participant, beneficiary, or fiduciary (A) to enjoin any act or practice which violates any provision of this subchapter or the terms of the plan, or (B) to obtain other appropriate equitable relief (i) to redress such violations or (ii) to enforce any provisions of this subchapter or the terms of the plan
Actions Under ERISA 502(a)(1)(b) 18 Concurrent federal and state jurisdiction Allows action only by a plan participant or beneficiary “to recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan”
19 PLAN SUBROGATION & REIMBURSEMENT RIGHTS
The Insured Plan 20 Most states have adopted anti-subrogation rules or doctrines precluding reimbursement Extent of prohibitions varies state to state MT constitutional protection NJ prohibited as a function of collateral source statute NY statute prohibits claims by insurers PA presumes settlement is full recovery Many states allow for contracting out of anti-subro doctrines A few states have not adopted made-whole or other anti-subrogation law
The Self-Funded Plan 21 Form 5500 and Schedule A Plan Document v. SPD Cigna v. Amara , 563 U.S. ___, 131 S.Ct. 1866 (2011) Subrogation v. Reimbursement Interpreting the contract clause Plan year and date of injury Conditional language Abrogating the made-whole doctrine 6 th , 9 th & 11 th Circuits require explicit language
Actions Under ERISA 502(a)(3) 22 Federal jurisdiction is exclusive Claims by a participant, beneficiary or fiduciary Allows only “ appropriate equitable relief ” to enforce plan terms US Airways v. McCutchen , 133 S.Ct. 1537 (2013) Unjust enrichment not a defense to plan contract term “Background equitable rules” apply if not expressly contradicted by contract term Made-whole doctrine Common-fund doctrine
“Appropriate equitable relief” 23 Montanile v. Bd. of Trustees, Nat’l. Elevator Industry Health Benefit Plan , 577 U.S. ___ (2016) Equitable claim and equitable relief Equitable liens enforceable only against a specifically identified fund in the defendant’s possession Expenditure of identifiable fund on non-traceable items destroys equitable lien. What public policy is promoted? What are the practical consequences?
Requesting Plan Documents 24 Request must be to Plan Administrator/Sponsor Statutory responsibility to provide within 30 days $110/day civil penalty available for non-compliance 29 U.S.C. § 1024(b)(4); 29 CFR § 2575.502c-3
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