Supreme Court Ruling in ERISA Case

The recent United States Supreme Court case of U.S.  Airways Employee Benefit Plan vs. McCutchen (see the full text here) is bad news for plaintiffs with ERISA health insurance plans. If a person has a serious claim with medical expenses greater than the liability insurance policy limits of a  defendant, the claimant may recover nothing, since the Supreme Court has held that the equitable doctrines designed to prevent unjust enrichment, the double recovery rule, and the common fund doctrine no longer provide a plaintiff with any protection from having to reimburse his or her health insurance company for bills incurred due to a personal injury caused by an insured defendant. The Supreme Court held that the equitable lien provisions set out in the insurance policy contract apply. The issue of whether the insurance company must participate in paying a portion of the attorneys fees required to make the recovery is left for interpretation based upon the language in the insurance policy. The common fund doctrine allows for the attorney to be paid for recovering the money to pay the insurance company unless the insurance company contract (plan document) specifically doesn’t allow it (opinion at pages 12-16). The problem is that the claimant, in a case where the liability insurance policy limits are less than the medical bills, may not recover anything.