Supreme Court to Hear ERISA Overpayment Case

By NAPA Net Staff • 4/7/2015 • 0 Comments
The United States Supreme Court recently agreed to hear another ERISA case, this one dealing with the ability of a plan fiduciary to recover an overpayment.

The high court granted certiorari in the case of Montanile v. Board of Trustees of the National Elevator Industry Health Benefit Plan to decide whether “appropriate equitable relief” is available to a plan fiduciary that wants to recover an overpayment but cannot identify the particular fund that constitutes the overpayment. 

An analysis by Mayer Brown, LLP notes that in the case, a beneficiary of an ERISA-governed health insurance plan received a benefit payment of more than $100,000 for injuries stemming from an automobile accident. After the beneficiary recovered an even greater amount in a lawsuit against another driver, the plan fiduciary sued to recover the benefit payment, invoking a plan provision requiring reimbursement of “any amounts received from another party.”

This issue is of importance to employers that administer employee benefit plans governed by ERISA, and particularly those with ERISA-governed health insurance plans, which Mayer Brown notes are most often confronted with the need to recover overpayments.

The district court ruled for the plan fiduciary on summary judgement. The 11th Circuit affirmed that decision, relying on previous Supreme Court decisions in Sereboff v. Mid Atlantic Medical Services, 547 U.S. 356 (2006), and US Airways, Inc. v. McCutchen, 133 S. Ct. 1537, where the lower courts held that the settlement funds were subject to an equitable lien even if they were subsequently disbursed or commingled with other funds. 

In fact, no fewer than six federal courts of appeals have taken that view, while two courts have held that an equitable lien is unavailable unless the funds can be specifically identified at the time of the suit — setting up the conflict that the Supreme Court will now seek to resolve.  
Mayer Brown explains that, absent extensions, which are likely, amicus briefs in support of the petitioner will be due on May 21, 2015; those in support of the respondent will be due on June 22, 2015.

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