This is easily the most boring and most significant federal law I deal with on a weekly basis. ERISA is a borderline impenetrable area of the law. Basically, the federal government created a system whereby health plans and employer sponsored health plans and other employer benefits enjoy really special benefits. The stated purpose of ERISA is to allow large companies and their health and benefits plans to operate with certainty from state to state without regard to each state’s parochial laws trying to protect their citizens. Why do I have to deal with ERISA?
Consider the following hypothetical. You work for Aramark, that staffs cafeterias around Philadelphia. This is a very pre-pandemic hypothetical. You have health insurance through Aramark and Blue Cross. You are in a car accident and have $35,000 in medical bills that are not covered by your car insurance medical. Your lawyer gets you a $100,000 settlement. ERISA says Blue Cross can collect their $35,000 out of your $100,000 settlement! Not fair, right? Truly not fair. But, completely legal, lawful, and backed up by ERISA, Congress, the US Supreme Court etc. You are not going to win this fight. Them’s the rules. I read the ERISA plans very very carefully and sometimes there are loopholes, but usually I end up begging the insurer to reduce their claim and have unhappy conversations with clients explaining why ERISA is taking money from their settlement rather than from the person who injured them.
There are large firms that have lawyers that spend their careers working on ERISA, but for me on my end, it is simply unfair. ERISA is written such that the health plans have a right to subrogation or to collect through you for medical bills paid out by any insurance coverage. Blue Cross is essentially able to say that we would not have had to pay medical bills but for the negligence of the person who caused the car accident and the law says we can collect reimbursement from ANY car insurance. The “any” is the sticky part for my clients. The only insurance payouts in these situations are ones that are made to my clients and at the end of the case, Blue Cross is there with their hand out. Sorry little guy. Sorry injured person. Thanks Congress. Thanks Judges.