ERISA Subrogation (Continued from page 10)
in personal injury litigation.
I. TO NOTIFY OR NOT NOTIFY THE HEALTH INSURER OF THE PENDING CLAIM OR LITIGATION
The first difficult decision is whether or not to notify the health insurance plan that a claim or lawsuit is being pursued on behalf of the claimant. The attorney needs to have all relevant plan documents concerning the health insurance plan and know the source of the health insurance coverage as to whether or not it is or is not employer sponsored, before notifying the health insurance carrier of the claim. The plan documents for the health insur- ance plan may be obtained through an employer if the insurance is employer sponsored. However, there is no need to notify the health insurance carrier about the claim until the attorney first deter- mines that the health insurance plan is governed by ERISA and that the plan documents have a subrogation provision that requires repayment of the lien. Once having determined that there is an ERISA health insurance plan and it has an en-
forceable subrogation provision, it is my recommendation that you should notify the health insurance plan about the claim or litigation. The client would not be well served to have the plan intervene, as it tried in Great West, and destroy or block a good settlement simply because it was not notified earlier about the claim or litiga- tion. In addition, the untold story of Great West from the claimant’s perspective was that the health insurer still used self-help measures and would not insure future medical expenses of the client if it could not recover its lien in the underlying per- sonal injury litigation. Under HIPAA, no subsequent health insurer can be forced to provide coverage for pre-existing con- ditions related to personal injuries, thus leaving the claimant without health in- surance to cover future medical expenses.
II. TO SIGN OR NOT SIGN A LIEN LETTER
The next subrogation problem occurs when an attorney or claimant is con- fronted with whether or not to sign a lien letter, either to continue medical treat- ment or to obtain copies of medical records and bills from the health insur- ance carrier. The questions are: what happens if you sign or do not sign the
lien letter, and is there another alterna- tive as a result of the Supreme Court’s granting the petition for certiorari in Sereboff? The Fourth Circuit Court of Appeals decision in Kress v. Food Emplrs. Labor Rels. Ass’n, 391 F. 3d 563(2004), provides an excellent illustration of what may happen if the attorney refuses to sign the lien let- ter. Kress held that the lien letter must be signed or the ERISA plan could cutoff future medical treatment and drop the claimant from coverage. The Fourth Cir- cuit went further and specifically warned that a given plan’s subrogation rules should factor into the calculus as to whether or not an attorney should take a specific personal injury case. However, the Supreme Court’s grant of the petition of the writ of certiorari in Sereboff ’may provide a good opportunity to defer signing the letter until that case is decided by the Supreme Court. Cer- tainly, an attorney may request that the health insurance plan defer the signing of the lien letter until Sereboff is decided. The attorney and the health insurance plan could delay signing the lien letter until and unless the Supreme Court rules in favor of the insurer. If the health insur-
(Continued on page 14)
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