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Third Circuit Limits Relief Available to Welfare Plan to Appropriate Equitable Relief

The U.S. Court of Appeals for the Third Circuit recently ruled that an employer-sponsored group health plan for employees was not entitled to full reimbursement of medical expenses that it had previously paid on behalf of a participant, even though the plan provided that the participant was required to reimburse the plan for all amounts recovered from a third party. In this case, the plan paid $66,866 in medical expenses to the participant for injuries sustained in an automobile accident. After the participant recovered $110,000 (after attorney’s fees and other costs, a net amount of less than $66,000) from the underinsured driver, the plan filed suit against the participant under Section 502(a)(3) of ERISA for “appropriate equitable relief” in the form of reimbursement of the full $66,866 that it paid. Finding support in the U.S. Supreme Court’s recent ruling in Cigna v. Amara, which authorized equitable reformation under Section 502(a)(3)… Continue Reading

U.S. Supreme Court Will Review Constitutionality of Health Care Reform Law

The U.S. Supreme Court has agreed to review three cases challenging the constitutionality of the Patient Protection and Affordable Care Act (the Health Reform Law). Specifically, the Court has agreed to address the following issues: (1) whether the individual mandate under the Health Reform Law is constitutional; (2) whether the remainder of the Health Reform Law is severable if the individual mandate is ruled unconstitutional; (3) whether the Health Reform Law’s expansion of the Medicaid program is constitutional; and (4) whether the Anti-Injunction Act bars state challenges to the individual mandate. A copy of the Supreme Court’s order can be found here.

December 2011
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