The U.S. Supreme Court has decided Montanile v. Board of Trustees of the National Elevator Industry Health Benefit Plan, No. 14-723, ruling 8-1 in favor of Stris & Maher client Robert Montanile.
Montanile raised an important issue affecting ERISA plans and their beneficiaries: whether plans may seek to recoup money from a beneficiary’s general assets if they believe the plan is entitled to reimbursement. Under ERISA, plans are allowed to pursue “equitable relief” if a beneficiary retains funds that purportedly belong to the plan (whether in the overpayment or subrogation setting). The federal courts of appeals had split over whether plans could pursue a beneficiary’s general assets. In Montanile, the Supreme Court resoundingly said “no.”
The decision establishes limits on the ability of ERISA plans to demand back from beneficiaries money that has already been spent. As a result, plans will be more likely to resolve “recoupment” disputes with beneficiaries promptly, before the money in question has been spent. Sick, disabled, and poor beneficiaries now have significant legal protection against plans that decide years later to demand back money long ago spent on necessities.
Our firm’s case study:
Montanile: Supreme Court Victory
Related press coverage:
Justices Say ERISA Plan Can’t Chase Spent Settlement Funds (Law360, January 20, 2016) (subscription required)
Insurers lose, injured beneficiaries win in Supreme Court decision (Modern Healthcare, January 20, 2016) (subscription required)
Supreme Court Reversal in Accident-Payout Case (Courthouse News Service, January 20, 2016)