Sereboff v. Mid Atlantic Medical Services, Inc.

Case Updates

The Supreme Court affirmed the Fourth Circuit decision.

NCLC has asked the U.S. Supreme Court to affirm an appellate court ruling that gives third-party healthcare fiduciaries the right to recover payments made to health plan beneficiaries based on Employee Retirement Income Security Act (ERISA) provisions. In this case, the healthcare provider, a subsidiary of UnitedHealth, paid $75,000 in medical claims for the Sereboffs, who were injured in an auto accident and later recovered $750,000 in personal injury claims in California courts. In its brief, NCLC noted that the Fourth Circuit held that a plan fiduciary may seek, under ERISA, equitable restitution and impose a trust or equitable lien on a portion of settlement funds that are within possession and control of the participant. If this decision is overturned, many employers might choose to stop providing health plans or require greater cost sharing with employees because of the higher costs associated with this type of litigation.