Who or What is ERISA Anyway?
As soon as a lawyer begins taking on personal injury cases for plaintiffs, one of the first words that they hear, and often don’t understand, is “ERISA.” I remember thinking, who is this ERISA, and why does everyone keep warning me about her.
If you are a personal injury attorney reading this, you obviously know that ERISA simply refers to Federal Employee Retirement Income Security Act of 1974. The ERISA Act requires healthcare plans to provide plan information to the beneficiaries about coverage, funding, plan assets and other features of the plan. Because most employer-based healthcare plans are required to comply with the ERISA act, most of the employer-based healthcare plans asserting liens on our clients recovery proceeds are those regulated by ERISA.
So what is so important about that? In Georgia, it means that the main protection our clients have against reimbursing healthcare plans do not apply because ERISA (as a piece of Federal legislation) trumps state law. So the protection of O.C.G.A. § 33-24-56.1 (the statute that says your clients don’t have to pay a healthcare plan unless they’re “made whole”) does not apply to ERISA plans.
While there are some protections against reimbursing ERISA plans, it’s far more common that the ERISA plan will have a right to dollar-for-dollar reimbursement for whatever it paid for your client’s treatments related to the injury case. As you will hear from the lien holders repeatedly as they call and send letters to you throughout the case.
But because dollar-for-dollar reimbursement is not absolute, every ERISA plan asserting a lien must be thoroughly reviewed before you agree to pay your client’s money back to the plan. It may not actually be an ERISA plan, but you won’t know that unless you request the plan documents. There is also magic language that must be in the plan contracts for an ERISA plan’s lien to be enforceable. Most importantly of these, the plan must expressly reject the made whole doctrine in the plan language, or the lien will be unenforceable if your client is not made whole. Again, you won’t know that unless you get the plan documents.
These protections will be discussed more thoroughly in subsequent blog posts and additions to our website.