What is ERISA?
What is ERISA? ERISA is short for the Employee Retirement Income Security Act of 1974. Under this Act, employers are allowed certain federal tax benefits as an incentive to provide benefits to its employees. One benefit many employers provide is health insurance. (We provide health insurance to our employees too but our plan is not self-funded, nor is it an ERISA plan) In many instances, the employer provides the health insurance through a self-funded plan, meaning that the employer funds the plan that pays the claims submitted for medical expenses. These self-funded plans are exempt from the anti-subrogation rule in North Carolina (discussed above) and therefore these plans may seek to recover part or all of any settlement, depending upon the specific language in the plan. We usually find that the plan’s language provides that it may recover all of the money it has paid even if that amount would mean that the injured party gets nothing.
Once we determine that our client’s health insurance plan is protected by ERISA, we research the following important factors:
- Who is the real employer?
- We request our client to provide us with a copy of her health insurance card.
- What is the name of the entity attempting to collect the reimbursement for the health plan? We typically find Rawlings, ACS Recoveries, Ingenix and other collection companies contact our clients on behalf of the plan so we usually deal with one of them during our attempts to negotiate the reimbursement. However, once in a while we find that the employer itself will attempt to collect the monies.
- We always research the employer by locating a form 5500 filed by the employer which identifies the type of plan and how it is funded.
- We contact the collection agency for the plan and request an itemized listing of medical bills paid so that we can omit any unrelated charges.
- At no time do we agree to reimburse the plan even though we attempt to advise of our willingness to negotiate a fair resolution that would our client to receive a fair amount of the recovery.
Note: If the employer or the employer’s health plan purchases health insurance to pay the employee’s medical bills then the plan would not be considered a self-funded plan and it is our opinion that the plan is not allowed to seek reimbursement under North Carolina’s anti-subrogation rule (discussed earlier).
Once it is determined that the employer’s health plan is a self-funded ERISA plan then we do everything possible to negotiate with the plan to work out a fair resolution to the plan’s claims for reimbursement and at the same time allow our client to keep a fair amount of the recovery. This process can be time consuming and very frustrating but we have been very successful in the past on behalf of our clients.