Some states, including Missouri, are known as “anti-subrogation” states. Our state’s public policy prohibits the assignment of a personal injury claim, whether it is called an assignment, subrogation interest, or agreement to reimburse. (See Hays v. Missouri Highways and Transp. Com'n, 62 S.W.3d 538, 540 (Mo.App. W.D. 2001)).This means that in Missouri, it is the general rule that a health insurance company who has paid accident-related medical bills is generally not entitled to be reimbursed out of the injured person's settlement, unless an exception to that rule applies.
Unfortunately, the exceptions are numerous. One major exception that very often applies to allow a plan to have reimbursement rights in Missouri is if the plan is a self-funded ERISA plan that has a right of subrogation or reimbursement written into the plan. That is because the federal Employee Retirement Income Security Act (29 USC Sec. 1001 et seq.) can preempt state anti-subrogation laws. Not all plans are governed by ERISA.
There are many steps you can follow to determine whether you are dealing with a self-funded ERISA plan:
- Is the plan one provided by your employer or the employer of a family member? If so, you need to determine whether the plan is a self-funded ERISA plan. If the plan is an individual plan that you purchased for yourself through a broker, then you are not dealing with an ERISA plan, and state anti-subrogation laws apply to prevent the plan from enforcing any claimed right of reimbursement.
- If the employer-provided plan is one provided by the state or federal government, then it is not an ERISA plan. If the plan is provided by the federal government, then a different federal law known as FEHBA applies. If it is provided by the state government, then state law applies.
- If the plan is provided by an employer, then you can learn a lot by checking to see if the plan filed a Form 5500, which is a tax form that must be filed by all employer plans which are set up under the ERISA statutes.
- If you do find a Form 5500 for your employer-provided plan, you will want to check the plan’s funding arrangement in Paragraph 9a. If the only box checked is “insurance,” then you are probably not dealing with a self-funded ERISA plan. If either “general assets of the sponsor” or “trust” is checked, then you need to do some further investigation, because it is likely that the ERISA plan is, at least, partially self-funded.
- Nothing is more important than reviewing the Plan itself. You probably do not have a complete copy of the plan, but may only have a Summary Plan Description. That can be a good start, but I usually ask my clients to get a copy of the entire plan from their employer. I give them a letter that they can send to their plan administrator pursuant to 29 USCS § 1024(b)(4).
If you feel that you do, indeed, have a self-funded ERISA health plan, check the plan’s language regarding subrogation or reimbursement. Often times, there are provisions regarding reduction of the reimbursement amount for attorneys’ fees, pro rata sharing of the expenses, etc.
