Erin Sweeney was quoted regarding Montanile, for which the Supreme Court recently heard arguments and will determine if, under ERISA, a reimbursement to an employee benefit plan can be recovered if the beneficiary has already spent the funds recovered from a third party. In Montanile, the question was "if the individual receives dollars from a third party but then the individual simply spent the dollars on child care and their own expenses, can the plan then still obtain those dollars from this individual?" said Sweeney, who attended the oral arguments. "If there's nothing left in the account, can the plan still obtain those dollars?"
Sweeney said plan sponsors will want to pay attention to this case because "if there is litigation, litigants often bring in everyone and so they may very well be named in a lawsuit. And if the plan is self-insured, then the employer is going to be, typically, the entity who is going to be defending this type of lawsuit." Employers should check in with their third-party administrators to "make sure the language that is in the plan document is going to accurately track where the Supreme Court is going with these subrogation reimbursement cases," she said, "so the employer doesn't get scooped into a lawsuit that they're not interested in having to deal with."