boxsolid
From the Bench (continued from page 19)
they are not, and “ties” go to the (imagine that). Relying on the Plan’s 358 (4th Cir. 1997), cert. denied
insured. Sounds simple enough in subrogation provision, Boeing sued 524 U.S. 936 (1998) and the 3rd
theory, but it is so much more difficult Ms. Thurmon and (yikes!) the law Circuit’s decision in Bill Gray
in practice. firm, seeking reimbursement of the Enterprises, Inc. Employee Health &
monies its Plan paid out on Ms. Welfare Plan v. Gourley, 248 F.3d
A Familiar Refrain Thurmon’s behalf. Thurmon and the 206 (3rd Cir. 2001):
Missouri Federal Court Reaffirms law firm moved to dismiss the The purchase of stop-loss insurance
Fundamental Principle: Employer’s Complaint on the theory that it did does not change a plan’s status; it
Purchase of Stop Loss Insurance not assert a legally sufficient claim. does “not convert a self-funded or
Does Not Alter Self-Funded self-insured employee benefit plan
Character of Plan (The Boeing Those interested in ERISA subroga- into a fully insured plan for preemp-
Company v. Thurmon, No. 4:09-cv- tion law (and I confess that I am not tion purposes.” Bartlett, 915 F. Supp.
1456, in the United States District one of them) will be engaged by the at 742; see also Bill Gray Enters., Inc.
Court for the Eastern District of Court’s analysis of and conclusions Employee Health and Welfare Plan v.
Missouri, December 7, 2009). regarding whether the Boeing Plan Gourley, 248 F.3d 206, 214 (3d Cir.
created an equitable lien, and whether 2001) (“[W]hen an ERISA plan pur-
This is a subrogation case, significant it identified a particular “share” of a chases stop-loss insurance but does
for its fresh and express reiteration of particular “fund” from which it should not otherwise delegate its financial
the bedrock proposition that purchase be reimbursed, sufficient under the responsibilities to another third party
of stop loss insurance by the sponsor U.S. Supreme Court’s decision in insurer, it remains an uninsured self-
of a self-insured employee benefit Sereboff. The Court concluded that funded welfare plan for ERISA pre-
plan does not affect pre-emption the subrogation provision did so, and emption purposes.”).
analysis. In other words, a self- denied the motion to dismiss.
insured plan is still a self-insured Opinion at p. 9. In its concluding
plan, despite the existence of excess One of the arguments raised by the paragraph, the Court noted that
loss coverage. defendants related to a claim con- Defendants would have the opportuni-
cerning the existence of stop loss cov- ty through discovery in the case to
erage. In its reply brief, the defen- determine whether Boeing’s allegation
Boeing’s HMO Plan contained the dants asserted that Boeing’s Plan was that its Plan was self-funded was accu-
following provision: in fact “heavily insured,” and that rate or not. But it is at least clear from
[R]egardless of whether or not there was evidence from the Form this opinion that the existence of stop
you have been fully compen- 5500 filed by the Plan to suggest that loss coverage, if proven, will not alter
sated, we may collect from the the TPA, United HealthCare, was the self-funded character of the Plan
proceeds of any full or partial paid $5.5 million during 2007 in for pre-emption purposes.
recovery that you or your legal “commissions and fees.” Defendant’s
representative obtain, whether Reply Brief at p. 3. Defendants stated Tom Croft is a
in the form of a settlement that “Part of this payment extends to litigator with
(either before or after any work by United Healthcare as claims the firm of
determination of liability) or administrator, but Defendants believe King & Croft
judgment, the reasonable that a substantial portion of this pay- LLP, Atlanta,
value of services provided ment extends also to health insurance Georgia. He
under the Plan. coverage, either directly or in the has a national
nature of reinsurance or stop loss cov- practice, con-
According to the Court’s description erage.” Id. Beyond this, the sulting with
of the allegations of Boeing’s Defendants claimed that the “notion and represent-
Complaint, Boeing paid out $65,000 of a ‘self-funded’ plan garnering exten- ing stop-loss
in plan benefits for medical care sive preemption and avoidance of state carriers,
received by participant Linda
law...is not consistent with the more MGUs, and other entities in matters
Thurmon after she was injured in an current trend, which is to apply state arising in the self-funding arena. Tom
automobile accident. Allegedly, Ms. law where appropriate.” Id. at p. 4. maintains a comprehensive website con-
Thurmon hired The Floyd Law Firm, taining current information about legal
which filed suit against a third party The Court rejected the latter claim issues related to litigation and compli-
on her behalf. The case allegedly set- head-on, relying on the familiar twin ance in the medical stop-loss area at
tled, the law firm took its fee from the pillars of precedent reflected in the
www.StopLossLaw.com. Visitors may
proceeds, and disbursed the balance 4th Circuit’s decision in American register to receive updates when new
to Thurmon, who allegedly spent it Medical Security v. Bartlett, 111 F.3d content is added.
20 • The Self-Insurer
©
/ January 2010
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