ERISA Plans and Subrogation: What Does This Mean?

Many of my clients with health insurance ask me if they will need to reimburse their health insurance carrier for medical bills it pays. The answer is, sometimes, and that the rules vary by plan. Each case is different.

One of the big factors in determining if and how much needs to be repaid is whether the plan is a so-called “ERISA” plan. As you can see, the rules and laws about ERISA plans are themselves very complicated. If you’ve been involved in a wreck, call my office to discuss your case. I will take the time to meet with you and explain the specifics of your case, including the effect health insurance will have.

What is an ERISA plan?

The terms employee welfare benefit plan and welfare plan mean any plan, fund, or program which was…established or maintained by an employer or by an employee organization…to the extent that such plan, fund, or program was established…for the purpose of providing for its participants or their beneficiaries, through the purchase of insurance or otherwise, (A) medical, surgical, or hospital care or benefits, or benefits in the event of sickness, accident, disability, death or unemployment, or vacation benefits, apprenticeship or other training programs, or day care centers, scholarship funds, or prepaid legal services, or (B) any benefit described in section 186(c) [holiday benefits, among others] of this title (other than pensions on retirement or death, and insurance to provide such pensions).

(2)(A) Except as provided in subparagraph (B) [relating to severance pay arrangements and supplemental retirement income payments], the terms “employee pension benefit plan” and “pension plan” mean any plan, fund, or program which was…established…by an employer or by an employee organization…to the extent that by its express terms or as a result of surrounding circumstances such plan, fund, or program – –

1. provides retirement income to employees, or

2. results in a deferral of income by employees for periods extending to the termination of covered employment or beyond, regardless of the method of calculating the contributions made to the plan, the method of calculating the benefits under the plan or the method of distributing benefits from the plan.
29 U.S.C. § 1002(1) (emphasis supplied).

The plan should be in writing.

Every employee benefit plan should be established and maintained pursuant to a written instrument. The written instrument “shall provide for one or more named fiduciaries who jointly or severally shall have authority to control and manage the operation and administration of the plan.” 29 U.S.C. § 1102(a)(1).

The minimum factors needed to defne the plan are:

A plan, fund or program,

established or maintained,

by an employer or by an employee organization, or by both,

for the purpose of providing medical, surgical, hospital care, sickness, accident, disability, death, unemployment or vacation benefits, apprenticeship or other training programs, day care centers, scholarship funds, pre-paid legal services or severance benefits,

To participants or their beneficiaries.

Donovan v. Dillingham, 688 F.2d 1367, 1371 (11th Cir. 1982) (en banc). In discussing the statutory elements, the Donovan court held that a “plan, fund, or program under ERISA implies the existence of intended benefits, intended beneficiaries, a source of financing, and a procedure to apply for and collect benefits.” Id. at 1372.
An ERISA plan can be held to exist in the absence of a written plan document or compliance with other ERISA requirements. Donovan v. Dillingham, 688 F.2d at 1372. The test is whether a reasonable person could ascertain from the surrounding circumstances: (1) intended benefits, (2) intended beneficiaries, (3) a source of financing, and (4) a procedure for obtaining benefits. Id.

An ERISA plan can be established without a name or without formal documentation.

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