If you’ve ever resolved a self-funded ERISA lien on your own, you know it’s rarely straightforward. In fact, it’s often the most difficult type of healthcare lien you’ll face as a trial lawyer or paralegal. The rules are different, the law is harsh and you are up against wily recovery contractors. The stakes are high. And without the right strategy, or the right documents, you can quickly find yourself in a losing negotiating position.
What Makes ERISA So Dangerous?
The Employee Retirement Income Security Act (ERISA) governs most employer health plans. If a plan is self-funded, ERISA preempts state law entirely, including your usual made-whole or anti-subrogation arguments. Once an ERISA plan asserts reimbursement rights, they often cite Sereboff and McCutchen, two U.S. Supreme Court decisions that cemented their ability to recover directly from your client’s settlement, even if it wipes out the net recovery. You may not even be able to assert equitable defenses if the plan terms are airtight.
Five Real-World Tips for Navigating Self-Funded ERISA Reimbursement
- Get the Plan Documents (All of Them). Use 29 U.S.C. §1024(b)(4) to demand the master plan document and summary plan description. Don’t accept summaries or partial PDFs from a TPA.
- Use the $110/Day Penalty as Leverage. If the plan administrator fails to produce requested documents under 1024(b)(4) within 30 days, they may be liable for statutory penalties—potentially your only bargaining chip in a self-funded plan.
- Check Form 5500. Determine whether the plan is self-funded or insured. Box 9 is critical. If both “general assets of the employer” and “insurance” are checked, you’ll need to dig deeper into the attached schedules and review all plan documents to determine funding status.
- Closely Examine Plan Language. Even valid ERISA plans can lose recovery rights if the plan’s reimbursement provisions aren’t written tightly enough. A good lien resolution expert will spot weak or unenforceable provisions in the plan.
- Determine if Equitable Doctrines Apply “Made whole,” “common fund,” and similar doctrines may not apply unless the plan language leaves room for them. Courts won’t rewrite ERISA contracts for equity’s sake.
Why Trial Lawyers Should Outsource ERISA Lien Resolution
ERISA liens aren’t the kind of lien you want your firm handling without backup. Here’s why outsourcing them to specialists isn’t just smart, it may be essential. Why? ERISA lien recovery contractors are very aggressive in their efforts to collect from your client’s settlement. You are often going up against massive vendors with entire departments dedicated to collection.
Here’s what an experienced lien resolution partner brings to the table:
- 🎯 Deep expertise in ERISA law and plan analysis
- 🧩 Access to plan document retrieval tools
- ⚔️ Negotiation strategies built on thousands of resolved cases and hundreds of years of subrogation experience.
- 💼 Risk mitigation, keeping your practice safe from ERISA lien litigation
Avoid Traps. Maximize Recovery.
Trial lawyers are often caught between a rock and a hard place—protecting the client’s recovery on one side and dealing with ERISA law on the other. Outsourcing ERISA lien resolution gives you and your team:
- More bandwidth to focus on what is important
- A stronger position when negotiating with plan reps
- Confidence that you’re in compliance with complex federal law
⬇️ Message synergy. to get a FREE copy of the ERISA Lien Checklist (PDF)
📩 Want to offload your ERISA headaches and protect your client’s settlement? Let’s talk. Learn more at: https://partnerwithsynergy.com/liens/
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