Where a personal injury claimant has medical insurance through a private ERISA health plan that is “self-funded”, and that insurance policy paid on medical expenses related to the injury, the federal Employee Retirement Income Security Act of 1974, 29 U.S.C. § 1001 et seq. applies.  In North Carolina, typical medical liens are paid out under a pro-rata basis, but where that medical lien is pursuant to an ERISA “self-funded” health plan, there is no similar federal law to limit or otherwise reduce the amount of the lien.  Rather, the terms of the agreement between the insurer and insured rule the day.  Likewise, federal courts will defer to the terms of the agreement, and are slow to get involved to alter the amount of the lien.

In 2013, the U.S. Supreme Court made clear its deference to the terms of the agreement in U.S. Airways, Inc. v. McCutchen, 133 S. Ct. 1537.  In this case, the Supreme Court confronted the issue of whether equitable principles will override the terms of the agreement where the two are in conflict.  The Court held that where the terms of the health plan clearly provide for reimbursement of medical expenses paid, the equitable principles of unjust enrichment or the common-fund doctrine would not serve to reduce the amount of the lien under the plan.  This case has practical effects for claimants with ERISA health plans.  Claimants cannot look to statutory or case law to reduce the amount of an ERISA lien.  Rather, claimants are limited to negotiating the amount of the lien with the hopes that the health plan will voluntarily agree to accept some lesser amount in full satisfaction.

All personal injury cases are handled by Attorney Taylor Simmons out of King Law Offices Charlotte, North Carolina office.  If you have any questions about your personal injury claim, contact our office at 828-286-3332.