ERISA and its Impact on You
By Marcy Spitz, Esq.
Most practitioners see the acronym ERISA and roll their eyes knowing there is more to do. Do not despair. ERISA notices are workable, here is what you need to know. As a personal injury attorney, you are aware that when your client treats for their injury, they most likely are covered by some type of health insurance policy. Assume your client is covered by a private health insurance plan to get us started. If a private health insurance plan was involved, then it is likely that ERISA will govern over the healthcare lien. What do you need to know?
1) ERISA is a federal statute that stands for the Employee Retirement Income Security Act. ERISA applies in all 50 states with some exception if the state happens to be an anti-subrogation state. ERISA was enacted in 1974 to unify the provisions that govern health and welfare plans. Three federal agencies govern over healthcare plans depending on the issues involved: Department of Labor (DOL), Pension Benefit Guaranty Corporation (PBGC), and the Internal Revenue Service (IRS).
2) When will ERISA Apply? It applies to ALL private employers that provide medical care for their participants or their dependents. ERISA does NOT cover church plans, government plans or workers’ compensation plans. They have their own set of authority that governs them. Be aware of these exemptions so you know to ask the right questions.
3) Never assume that the lienholder or the health plan has language contained in it to support their lien. Start early and remember to ALWAYS ASK TO REVIEW THE PLAN DOCUMENT that governs over the health plan.
4) The health plan has a legal obligation to furnish the participant with a copy of the plan document. There can be civil penalties for failure to produce these documents.
5) Once you have the pertinent document look for the language that applies to healthcare subrogation or reimbursement to see how the healthcare lien must be treated for your client.
6) Once you locate and apply that language there are many ways to reduce the lien by asserting various arguments including but not limited to: Made Whole Doctrine, State Law Pre-emption, Common Fund Doctrine, extenuating facts, plan language does not exist, reduction for meager settlements.
The key to resolving ERISA liens is to be planful and start early. Once the plan type has been determined, a review of the plan language and examination of the plan documents will establish the arguments that can be used to reduce or eliminate the ERISA lien. Contact MASSIVE at (833) 466-2774 or at [email protected] for all your healthcare lien resolution needs. We have expert ERISA attorneys on staff that can help with even the most complicated ERISA plan issues.
Register here to attend our free “ERISA Lien Essentials: The Dos and Don’ts of Managing Complex Plans” on February 4, 2021 at 1:30pm ET!