The U.S. Supreme Court ruled Wednesday in Montanile v. Board of Trustees of the National Elevator Industry Health Benefit Plan that a retirement plan cannot sue under the Employee Retirement Income Security Act for reimbursement of medical expenses from a third-party settlement that a plan participant has already spent. Here, attorneys tell Law360 why the Supreme Court’s ruling is significant.
Hugh Murray, McCarter & English LLP
“The Supreme Court’s ruling is a strong reminder to plan administrators and other plan fiduciaries to promptly pursue reimbursement of covered expenses from participants who recover from third parties. The court expressed confidence that its ruling limiting a plan’s ability to recover from a participant’s general assets would not harm those plans, specifically noting that in the past decade plans have developed more robust safeguards to ensure such payment. In light of this ruling, plan administrators and fiduciaries likely have a duty to review plan policies, adopt new policies if appropriate, and aggressively seek equitable remedies to maximize repayment.”