U.S. Airways, Inc. v. McCutchen

Most ERISA plans, whether for long term disability benefits or for health benefits, require the insured to pay back funds that it might receive from other sources. In the instance of a LTD beneficiary, these funds can come from social security or a pension or a worker’s compensation claim and can result in the beneficiary being required to repay those sums. In the health benefits setting, the United States Supreme Court issued an opinion on April 16, 2013, styled U.S. Airways, Inc. v. McCutchen, opinion by Justice Kagan, which held that a beneficiary that received health benefits from an ERISA plan could be required to repay those sums from a settlement with a tortfeasor, even if the amount that had to be paid back left little or no money to the client after deducting attorneys’ fees. The legal implication of the ruling is clear – ERISA plans can expressly disavow the common law made whole doctrine and recover monies from a health beneficiary even if the client has not been made whole in the settlement.

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