TABLE OF CONTENTS
Acknowledgments
About the Author
Notice
How to Use This Book
Introduction
CHAPTER 1
SUBROGATION GENERALLY
§ 1.01 Elements
§ 1.02 Origins of Subrogation
§ 1.03 Types of Subrogation
[1] Contractual (Conventional) Subrogation
[2] Equitable (Legal) Subrogation
[a] Difference between Subrogation and Assignment
[b] Roles of Equity
[3] Statutory Subrogation
[a] Workers’ Compensation
[b] Hospital Liens
[c] Medicare
[d] Medicaid
[e] Medicare Advantage Plans
[f] Interplay between Workers’ Compensation
and Medicare/Medicaid
[g] Federal Employees Health Benefit Act (FEHBA)
[h] Other Statutory Subrogation
§ 1.04 Purposes of Subrogation
§ 1.05 Anti-Subrogation Arguments
CHAPTER 2
INSURED ERISA-COVERED EMPLOYEE
WELFARE BENEFIT PLANS
§ 2.01 Generally
§ 2.02 Types of Health Plans
[1] Indemnity Plans
[2] Preferred Provider Organization (PPO)
[3] Health Maintenance Organization (HMO)
[4] Individual Practice Association (IPA)
[5] Point-of-Service Plan (POS)
§ 2.03 Multiple Employer Plans
[1] Single-Employer Plans
[2] Multi-Employer Plans
[3] Multiple-Employer Welfare Association Plans (MEWA)
[4] Voluntary Employees’ Beneficiary Association (VEBA)
[5] Occupational Accident Plans
§ 2.04 Subrogation and Reimbursement Rights
[1] Subrogation Rights
[2] Reimbursement Rights
[3] Standing in the Shoes of the Insured
[4] Indemnity versus Investment Contracts
[5] No Multiple Recoveries
[6] Subrogation Arises with Payment
[7] Subrogation against Municipalities
§ 2.05 Requirement to Join Subrogated Party
[1] Wis. Stat. § 803.03—Claims Arising by
Subrogation
[2] Is the Subrogated Party a Plaintiff, Defendant
or Other?
[3] The Reverse—Must Subrogated Party Join
the Insured?
[4] The Need to Participate
[5] What Do You Do if You Are Not Joined?
§ 2.06 Notice to Subrogated Parties
§ 2.07 What Happens if the Plaintiff Loses at Trial?
§ 2.08 Made Whole Doctrine and Non-ERISA Health Plans
[1] Garrity v. Rural Mutual Ins. Co.
[2] Rimes v. State Farm Mutual Auto Ins. Co
[3] What Does It Mean to Be “Made Whole”?
[a] Basic Test
[b] Contributory Negligence
[4] All Damages
[5] Attorney’s Fees
[6] Where Plan Specifically Negates Made Whole
Doctrine
§ 2.09 Common Fund Doctrine and Non-ERISA
Health Plans
§ 2.10 Statute of Limitations Issues
§ 2.11 Indemnification Agreements
§ 2.12 Subrogated Party on the Settlement Check:
Is It Enough?
§ 2.13 Subrogating against Under/Uninsured
Motorist Carriers
[1] “…A Responsible Third Party…”
[2] “…Any Party Who May Be Liable…”
[3] “…Caused, or Is Liable for…”
[4] Collateral Source Rules
[5] Anti-Subrogation Laws
[6] Summary
CHAPTER 3
HEALTH INSURANCE SUBROGATION IN ALL 50 STATES
Introduction
§ 3.01 Alabama
§ 3.02 Alaska
§ 3.03 Arizona
§ 3.04 Arkansas
§ 3.05 California
§ 3.06 Colorado
§ 3.07 Connecticut
§ 3.08 Delaware
§ 3.09 District of Columbia
§ 3.10 Florida
§ 3.11 Georgia
§ 3.12 Hawaii
§ 3.13 Idaho
§ 3.14 Illinois
§ 3.15 Indiana
§ 3.16 Iowa
§ 3.17 Kansas
§ 3.18 Kentucky
§ 3.19 Louisiana
§ 3.20 Maine
§ 3.21 Maryland
§ 3.22 Massachusetts
§ 3.23 Michigan
§ 3.24 Minnesota
§ 3.25 Mississippi
§ 3.26 Missouri
§ 3.27 Montana
§ 3.28 Nebraska
§ 3.29 Nevada
§ 3.30 New Hampshire
§ 3.31 New Jersey
§ 3.32 New Mexico
§ 3.33 New York
§ 3.34 North Carolina
§ 3.35 North Dakota
§ 3.36 Ohio
§ 3.37 Oklahoma
§ 3.38 Oregon
§ 3.39 Pennsylvania
§ 3.40 Rhode Island
§ 3.41 South Carolina
§ 3.42 South Dakota
§ 3.43 Tennessee
§ 3.44 Texas
§ 3.45 Utah
§ 3.46 Vermont
§ 3.47 Virginia
§ 3.48 Washington
§ 3.49 West Virginia
§ 3.50 Wisconsin
§ 3.51 Wyoming
CHAPTER 4
SELF-FUNDED, ERISA-COVERED EMPLOYEE MEDICAL BENEFIT PLAN SUBROGATION
§ 4.01 Introduction to ERISA
[1] History of ERISA
[2] Background
[3] Enactment and Purpose
[4] Scope of ERISA
[5] Definitions—The Language of ERISA
[6] Trust, Contract, and Labor Law Parallels
[a] Trust Law
[b] Contract Law
[c] Labor Law
[7] Federal Common Law
§ 4.02 What Is an ERISA Plan?
[1] Self-Funded Plans versus Insured Plans
[2] Stop-Loss Coverage
[3] General Rule to Determine Whether Plan Is
ERISA-Covered
[4] Safe Harbor Regulations
[5] Plans Not Subject to ERISA
[a] Government Plans and Church Plans
[b] Trade Association Plans and
Employees’ Beneficiary Associations
[c] Plans That Cover Owners and Not
Employees
[d] Multi-Employer Plans
[e] Entities Not Engaged in Interstate
Commerce
[f] Subrogating Insured ERISA-Covered
Plans
[6] Other Plans Subject to ERISA
[a] HMO Plans
[b] Plans Administered by Employer
[c] Occupational Accident Plans
[7] What Constitutes the Plan?
[a] Coverage Booklet
[b] Summary Plan Description (SPD)
[c] Wrap Documents
CHAPTER 5
ERISA PREEMPTION
§ 5.01 Preemption, Saving and Deemer Clauses
[1] Preemption Clause
[2] Saving Clause
[3] Deemer Clause
§ 5.02 Two Types of Preemption—Complete and
Conflict
[1] Complete Preemption (Narrow Preemption)
[2] Conflict Preemption (Broad Preemption)
§ 5.03 ERISA Preemption of State Law Where Plan Is
Insured and Not “Self-Funded”
§ 5.04 When Does State Law “Relate to” an Employee
Benefit Plan?
§ 5.05 When Does State Law “Regulate Insurance”?
§ 5.06 Preemption of State Court Judgments and Orders
§ 5.07 Erosion of Preemption
CHAPTER 6
ERISA AND THE MADE WHOLE DOCTRINE
§ 6.01 Introduction
§ 6.02 Made Whole Doctrine as Default Rule
§ 6.03 Applied to Self-Funded Plans
§ 6.04 Doctrine Affected by Reimbursement Provision
§ 6.05 Presumption against Made Whole Doctrine
§ 6.06 Made Whole Doctrine as Gap Filler
§ 6.07 Effect of Plan Administrator’s Interpretation
§ 6.08 Made Whole Doctrine Applicable unless
Specifically Negated by Plan Language
§ 6.09 Made Whole Doctrine under Federal Common
Law
§ 6.10 Definition of Made Whole
§ 6.11 Where Beneficiary Violates Plan’s Cooperation
Clause
§ 6.12 Made Whole Doctrine Doesn’t Affect Other
Duties under Plan
§ 6.13 Effect of Exclusionary/Excess Language
§ 6.14 Examples of Specific Plan Language
§ 6.15 Treatment of Made Whole Doctrine by Circuit
[1] First Circuit (ME, MA, NH, Puerto Rico, RI)
[2] Second Circuit (NY, CT, VT)
[3] Third Circuit (DE, NJ, PA, Virgin Islands)
[4] Fourth Circuit (MD, NC, SC, VA, WV)
[5] Fifth Circuit (LA, MS, TX)
[6] Sixth Circuit (KY, MI, OH, TN)
[7] Seventh Circuit (IL, IN, WI)
[8] Eighth Circuit (AR, IA, MN, MO, NE,
ND, SD)
[9] Ninth Circuit (AK, AZ, CA, HI, ID, MT, NV,
OR, WA, Guam, Mariana Islands)
[10] Tenth Circuit (CO, KS, NM, OK, UT, WY)
[11] Eleventh Circuit (AL, FL, GA)
[12] D.C. Circuit (District of Columbia)
CHAPTER 7
ERISA AND THE COMMON FUND DOCTRINE
§ 7.01 Introduction
§ 7.02 Plan Language: “Out of Any Monies Recovered”
and “All Rights of Recovery”
§ 7.03 “Full Reimbursement” Language
§ 7.04 Absence of Language Exempting Common Fund
Doctrine
§ 7.05 Plan Language Clearly Exempts Common Fund
Doctrine
§ 7.06 Effect of Plan Administrator’s Interpretation
§ 7.07 Common Fund Doctrine under Federal
Common Law
§ 7.08 Hourly or Contingency Fee?
§ 7.09 Notice of Litigation Requirement
§ 7.10 Who May Raise a Common Fund Claim?
§ 7.11 Treatment of Common Fund Doctrine by Circuit
[1] First Circuit (ME, MA, NH, Puerto Rico, RI)
[2] Second Circuit (NY, CT, VT)
[3] Third Circuit (DE, NJ, PA, Virgin Islands)
[4] Fourth Circuit (MD, NC, SC, VA, WV)
[5] Fifth Circuit (LA, MS, TX)
[6] Sixth Circuit (KY, MI, OH, TN)
[7] Seventh Circuit (IL, IN, WI)
[8] Eighth Circuit (AR, IA, MN, MO, NE,
ND, SD)
[9] Ninth Circuit (AK, AZ, CA, HI, ID, MT, NV,
OR, WA, Guam, Mariana Islands)
[10] Tenth Circuit (CO, KS, NM, OK, UT, WY)
[11] Eleventh Circuit (AL, FL, GA)
[12] D.C. Circuit (District of Columbia)
CHAPTER 8
RIGHTS OF RECOVERY:
SUBROGATION AND REIMBURSEMENT
§ 8.01 Introduction
§ 8.02 Persons Who Can Pursue Subrogation
§ 8.03 Venue
§ 8.04 Parties Authorized to Bring Action
§ 8.05 Jurisdiction
§ 8.06 Removal
§ 8.07 Problem Circuits
§ 8.08 Abstention
§ 8.09 Intervention
[1] State Court
[2] Federal Court
§ 8.10 Rights of Recovery: Subrogation and Reimbursement
[1] Recovery Rights Generally
[2] Plan Language Determines Subrogation Rights
[3] Recovery Rights under ERISA
[4] Types of Recovery Provisions
[a] Subrogation Provisions
[b] Reimbursement Provisions
[c] Exclusionary Provisions
[d] No Subrogation Language
[5] Subrogation Receipts and Reimbursement
Agreements
[a] Subrogation Agreement Does Not
Control
[b] Subrogation Agreement Does Control
[6] Recovery Priorities
[a] Elements of Damages (Gerrymandering)
[b] Allocation of Recovery among
Beneficiaries
[c] First Money Recovered
[d] Subrogating for More than Benefits Paid
[e] Plaintiff’s Attorney’s Fees
[f] Gray Areas
[g] Causation
[7] Reimbursement Rights
[8] Sue in the Name of Plan or Third-Party
Administrator?
[9] Credit against Future Benefits
[10] Summary Plan Description (SPD)
[11] Summary Plan Description as Formal Plan
Document
[12] Plan Fiduciary’s Interpretation of Plan
Language
[13] Multiple Plan Documents–Conflicting Terms
§ 8.11 Injunctions
§ 8.12 Constructive Trusts and Equitable Liens
§ 8.13 Restitution
§ 8.14 Declaratory Judgment Actions
CHAPTER 9
WHAT CONSTITUTES “OTHER APPROPRIATE EQUITABLE RELIEF”?
§ 9.01 History and Early Treatment
[1] Mertens v. Hewitt Assocs., 508 U.S. 248 (1993)
[2] Reynolds Metals Co. v. Ellis, 202 F.3d 1246
(9th Cir. 2000)
[3] Bauhaus (U.S.A.), Inc. v. Copeland, 292 F.3d
439 (5th Cir. 2002)
§ 9.02 Great West Life & Annuity Ins. Co. v. Knudson
[1] Why the Supreme Court Got It Wrong in Knudson
§ 9.03 Sereboff v. Mid Atlantic Medical Services, L.L.C,
547 U.S. 356 (2006)
§ 9.04 US Airways v. McCutchen, 663 F.3d 671 (3rd Cir. 2011)
[1] Subsequent Treatment of McCutchen
§ 9.05 Practical Application of the “Other Appropriate
Equitable Relief” Issue
§ 9.06 History of Treatment of “Other Appropriate Equitable
Relief” Issue by Federal Circuit
[1] First Circuit (ME, MA, NH, Puerto Rico, RI)
[2] Second Circuit (NY, CT, VT)
[3] Third Circuit (DE, NJ, PA, Virgin Islands)
[4] Fourth Circuit (MD, NC, SC, VA, WV)
[5] Fifth Circuit (LA, MS, TX)
[6] Sixth Circuit (KY, MI, OH, TN)
[7] Seventh Circuit (IL, IN, WI)
[8] Eighth Circuit (AR, IA, MN, MO, NE,
ND, SD)
[9] Ninth Circuit (AK, AZ, CA, HI, ID, MT, NV,
OR, WA, Guam, Mariana Islands)
[10] Tenth Circuit (CO, KS, NM, OK, UT, WY)
[11] Eleventh Circuit (AL, FL, GA)
[12] D.C. Circuit (District of Columbia)
§ 9.07 Summary of Judicial Treatment of
“Appropriate Equitable Relief”
§ 9.08 Possible Congressional Action to Address the Issue
§ 9.09 Future Trends
CHAPTER 10
OTHER ERISA RECOVERY ISSUES
§ 10.01 Medical Malpractice Recoveries
§ 10.02 Uninsured Motorist Benefits
§ 10.03 Med Pay and PIP Benefits
§ 10.04 No-Fault Insurance Laws
§ 10.05 Anti-Subrogation Law
§ 10.06 “Regulation of Insurance” Test
§ 10.07 Lien Reduction Statutes
§ 10.08 Common Fund Doctrine Statutes
§ 10.09 State Collateral Source Rules
§ 10.10 Federal Employees Health Benefit Act (FEHBA)
§ 10.11 Other State Statutes
§ 10.12 Federal Common Law
§ 10.13 Laws regarding Minors
§ 10.14 Recovery of Benefit Payments Made by Mistake
[1] Mistake of Fact
[2] Mistake of Law
[3] Overpayment of Benefits (Social Security)
§ 10.15 Coordination of Benefits (COB)
§ 10.16 NAIC Group Coordination of Benefits Model
Regulation
§ 10.17 HIPAA, HITECH, Medical Privacy, and
Subrogation
[1] The Problem: Medical Record Privacy
[2] The Solutions: HIPAA’s and HITECH’s
Privacy Regulations
[3] HIPAA’s and HITECH’s Impact on
Subrogation
[4] The Federal Services Modernization Act
(FSMA)
[5] HIPAA and Workers’ Compensation Claims
[6] Summary
§ 10.18 Reimbursement from Workers’ Compensation Claims
§ 10.19 Attorney’s Fees
§ 10.20 Choice-of-Law Provisions
§ 10.21 Statutes of Limitations
§ 10.22 Right to Jury Trial
§ 10.23 Equitable Estoppel
§ 10.24 Bankruptcy
§ 10.25 Bad Faith
§ 10.26 Causation
CHAPTER 11
ENFORCEMENT OF REIMBURSEMENT RIGHTS
AFTER SETTLEMENT
§ 11.01 Introduction
§ 11.02 Federal Court Jurisdiction
§ 11.03 Unjust Enrichment
§ 11.04 Effect of Release of Third Party by Participant
§ 11.05 Tortious Interference
§ 11.06 Liability of Plaintiffs’ Counsel
[1] Generally
[2] Equitable Relief
[3] Breach of Contract
[4] Tortious Interference with a Contract
[5] Implied Partnership
[6] Implied Contract with Law Firm
[7] Breach of Fiduciary Duty
[8] Equitable Lien by Agreement
[9] Plaintiff’s Counsels’ Ethical Considerations
§ 11.07 State Court Jurisdiction after Knudson and Sereboff
[1] Narrow View
[2] Broad View
[3] Modern View
§ 11.08 Special Needs Trusts
CHAPTER 12
IMPROVING PLAN LANGUAGE
CHAPTER 13
HIRING SUBROGATION COUNSEL
APPENDICES
A-1 Wis. Stat. § 803.03 – Joinder of Persons Needed for
Just and Complete Adjudication
A-2 29 U.S.C. § 1102 – Establishment of Plan
A-3 Bad ERISA Plan Subrogation Language
A-4 Good ERISA Plan Subrogation Language
A-5 29 U.S.C. § 1003 – Coverage
A-6 29 U.S.C. § 1144 – Other laws
A-7 Geographic Boundaries of United States Courts
of Appeals and United States District Courts
A-8 29 U.S.C. § 1132 – Civil enforcement
