June 18, 2019

June 17, 2019

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Second Circuit Rejects Plan’s Claim For Reimbursement From Another Plan

Where an ERISA plan specifically sets forth in the plan document its rights to reimbursement/subrogation vis-à-vis a plan participant then there is no requirement that recovery be conditioned on the plan being able to trace the recovered monies to the original benefit payment.  Under such circumstances, the plan is considered to have an equitable lien by agreement.  The Second Circuit recently had occasion, however, to consider whether an equitable lien could attach against another plan that provided overlapping medical coverage to a participant.  The Court held that it did not.  In so ruling, the Court concluded that the plan’s claims did not seek appropriate equitable relief because there was no agreement between the parties that identified a particular share of a specific fund to which the plan was entitled.  Recognizing that its holding could deprive an ERISA plan of any remedy in cases of this nature and could potentially create an incentive for similarly-situated ERISA plans to refuse coverage, the Court stated that it was bound to apply the law as interpreted by the U.S. Supreme Court and that it hoped Congress would “revisit this tangled web sooner rather than later.”  The case is Cent. States, Se. & Sw. Areas Health & Welfare Fund v. Gerber Life Ins. Co., 2014 WL 2853587 (2d Cir. Nov. 14, 2014).

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About this Author

Stacey Cerrone, Labor and Employment Attorney, Proskauer Rose Law FIrm
Senior Counsel

Stacey C.S. Cerrone is a senior counsel in the Labor & Employment Law Department, where she focuses her practice on ERISA litigation and labor and employment law.

Stacey represents plan sponsors, plans, directed trustees, and fiduciaries in all phases of litigation and mediation involving all aspects of ERISA, including: class actions and individual claims relating to ERISA's fiduciary duty and prohibited transaction provisions; denials of claims for benefits; church plans, severance plans; ERISA Section 510; retiree benefits; ERISA...

Russell L Hirschhorn ERISA Litigation, employee benefits attorney, Proskauer
Senior Counsel

Russell Hirschhorn is a Senior Counsel in the Labor & Employment Law Department, where he focuses on complex ERISA litigation and advises employers, fiduciaries and trustees on ERISA benefit and fiduciary issues. 

Russell represents employers, plan sponsors, plans, trustees, directed trustees and fiduciaries in all phases of litigation, arbitration and mediation involving employee benefits, including class action and individual claims relating to ERISA’s fiduciary duty and prohibited transaction provisions, denials of claims for benefits, severance plans, ERISA Section 510, retiree benefits, ERISA preemption of state law claims, plan investment losses, cash balance plan conversions, plan amendments or terminations, withdrawal liability, and employer contributions to multiemployer funds