ERISA Liens Against Tort Recoveries; What You Need To Know
When an ERISA health plan pays medical bills for an injured party because of the negligence of a third-party, the ERISA plan usually has a “super lien” against any financial recovery. Federal law preempts state law.
In Michigan, medical expenses for auto accident injuries paid either by a claimant’s own auto insurance or health insurance under a “coordinated” auto policy are not reimbursable. Thus, a claimant injured in an auto accident who obtains a settlement from an at-fault driver does not have to reimburse the auto or health insurer which paid for the accident-related medical expenses; nor does the auto or health insurer have a lien against the settlement proceeds. The exception to this rule occurs when the medical expenses are paid by an ERISA plan.
There are exceptions to the ERISA super lien rule. Whether an ERISA plan is entitled to be reimbursed from a personal injury settlement depends on whether the plan was self-funded or funded by insurance. If the ERISA plan is self-funded, the plan does have the right to be reimbursed and Michigan no-fault law precluding reimbursement is preempted by federal law. If the ERISA plan is funded by insurance, the plan does not have a right to be reimbursed.
When faced with a claim of reimbursement or lien against a third-party personal injury claim it is imperative that you obtain a copy of the ERISA plan document to determine if the plan was self-funded or funded by insurance.
Illustrative cases:
FMC Corp v Holliday, 498 U.S. 52, 111 S. Ct. 403 (1990); Auto Club Ins. Ass’n v Frederick & Herrus, Inc., 443 Mich 358 (1993); American Medical Security, Inc., v Auto Club Ins. Ass’n, 238 F.3d 743 (2001); Glover v Nationwide Mutual Fire Ins Co., 676 F.Supp.2d 602 (2009)
About Alexander & Angelas, P.C.
Attorney Peter A. Angelas represents defendants in civil liability litigation across Michigan. His practice areas include insurance defense litigation, premises liability, motor carrier (trucking) defense, corporate and commercial litigation, construction defect litigation, auto negligence, insurance coverage disputes, emergency casualty response services, alternative dispute resolution, subrogation claims, workers’ compensation, employment law, and liquor liability.
Mr. Angelas practices in all state and federal courts in Michigan, including Wayne County (Detroit), Macomb County (Mount Clemens), Oakland County (Pontiac), Washtenaw County (Ann Arbor), and Genesee County (Flint).
A 24/7 Emergency Hotline is available (800-219-0007) for trucking and insurance company clients. When an accident requires an immediate response to protect evidence, members of the firm quickly launch an investigation with the assistance of well-qualified accident investigators, crash re-constructionists, mechanical engineers, civil evidence photographers, and independent adjusters positioned throughout Michigan.
