Settlement and Alternative Dispute Resolution
Liens and Reimbursement
Self-funded plans governed by ERISA assert reimbursement rights against a participant's third-party recovery under the plan's own terms. Because ERISA preempts state law, the equitable doctrines that limit other liens frequently do not apply.
The distinction between self-funded and fully insured plans is critical, since fully insured plans are subject to state insurance regulation and the state-law defenses that come with it.
Alternative Names:
ERISA Reimbursement Claim, Health Plan Lien
Why it Matters?
ERISA claims are the most difficult liens to reduce, and plan language controls the analysis. A plan with clear reimbursement terms disclaiming the made-whole doctrine and asserting first-priority recovery can claim the entire settlement in a limited-limits case, leaving the claimant with nothing. Determining funding status early is essential, because it determines whether negotiation leverage exists at all.
Frequently Confused with
Related terms
Frequently asked questions
Why are ERISA liens harder to negotiate?
How do I tell if a plan is self-funded?
