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Ask a Lien Professional – ERISA Subrogation & Reform

Will the new Health Care Reform Law have any affect on ERISA plans and subrogation in the future? – FL Attorney

ANSWER: Right now there are many unknown variables regarding ERISA plans and the new Patient Protection and Affordable Care Act of 2010 that was signed into law on March 23, 2010. What we do know is that health insurance practices, including Subrogation and Recovery will experience changes over the next few years. The Employee Retirement Income Security Act of 1974 (ERISA) is a federal law that sets minimum standards for most voluntarily established pension and health plans in private industry to provide protection for individuals in these plans (US Department of Labor, Employer provided health plans are governed by ERISA, which also loosely defines their right of recovery, allowing for “appropriate equitable relief” (29 USC 1132(a)(3)). Plans that are self funded by the employer are evaluated based on federal ERISA law for validity. However, it is reported that over the coming months, the Department of Health and Human Services will be conducting a study to evaluate the financial solvency and ability by self funded companies to provide consistent benefits during times of economic downturn, along with several other markers ( This may mean a change in the classification of employer provided plans from self – funded (under federal law) to insured plans, which are evaluated against state insurance law. Next year, in 2011, insurance plans will be required to provide specific plan descriptions (SPD) and coverage information in plain, easy to understand language with, definitions, and common sense examples in a uniform format ( This will allow for a clearer understanding of the subrogation rights and parameters in plain terms for evaluation per Sereboff v. Mid Atlantic Medical Services, Inc. (2006), where the plan’s recovery is defined by the specific language within the plan. It will be more important than ever to obtain a copy of the specific plan description for the year of coverage to which the claimant was injured. Paying attention to these detais may make all the difference in your settlement, and may save money for your client.

As more information about the changes to ERISA Lien Resolution and Subrogation are released, we will continue to assist in the understanding of the new measures. Lien Settlement Solutions offers ERISA, Private Insurance, and Hospital/Provider Lien Resolution Services. Contact us at (877)907-5436 or email at for more information.

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