The Ant And The Grasshopper: Improving Plan Subrogation Language For The Winter Ahead
In a field one summer’s day a grasshopper was hopping about, chirping and singing to its heart’s content. A group of ants walked by, grunting as they struggled to carry plump kernels of corn.
“Where are you going with those heavy things?” asked the grasshopper. Without stopping, the first ant replied, “To our ant hill. This is the third kernel I’ve delivered today.”
“Why not come and sing with me,” teased the grasshopper, “instead of working so hard?” “We are helping to store food for the winter,” said the ant, “and think you should do the same.”
“Winter is far away and it is a glorious day to play,” sang the grasshopper. But the ants went on their way and continued their hard work.
The weather soon turned cold. All the food lying in the field was covered with a thick white blanket of snow and ice that even the grasshopper could not dig through. Soon the grasshopper found itself dying of hunger. He staggered to the ants’ hill and saw them handing out corn from the stores they had collected in the summer. He begged them for something to eat.
“What!” cried the ants in surprise, “haven’t you stored anything away for the winter? What in the world were you doing all last summer?” “I didn’t have time to store any food,” complained the grasshopper; “I was so busy playing music that before I knew it the summer was gone.”
The ants shook their heads in disgust, turned their backs on the grasshopper and went on with their work.
This webinar will help subrogation professionals and plan underwriters address weaknesses in their plan’s subrogation language which is costing the plan potentially millions of dollars. Any sponsor of a group health plan should be identifying and investigating medical claims paid that indicate subrogation potential, but acting on that subrogation will be impossible if your plan language does not support your right to subrogation reimbursement and coordination of benefits. The recent Supreme Court decision in Montanile v. Board of Trustees of The National Elevator Industry Health Benefit Plan has reawakened interest in subrogation opportunities and reinforces the importance of proper plan drafting. Every health plan should be reviewed to verify that it provides you with the ammunition and tools necessary to successfully recover your plan payments when there is a third party responsible for causing the injury. Areas of focus include plan language which will:
- Identify funds to be recovered (e.g., from third-party tortfeasors);
- Identify portion of the funds to be recovered (i.e., amount equal to costs paid to plan participant);
- Provide the plan attaches an equitable lien to the funds recovered;
- Provide the plan imposes a constructive trust on any recovered proceeds;
- Provide the plan does not recognize the Made Whole Doctrine or the Common Fund Doctrine;
- Outlaw the Common Fund Doctrine and state any attorneys’ fees are paid outside of the recovered fund;
- Provide allocation scheme allowing the plan first priority for recovering proceeds received from third parties;
- Require plan participant assistance in segregating recovered funds prior to disbursement; and
- Aid in coordination of benefits where multiple plans provide coverage.
We will provide examples of how insufficient plan language may cost the plan untold millions. In the world of insurance and litigation where words matter, the addition or deletion of a few words can make all the difference in the world. We will emphasize how trial lawyers are litigating even the slightest weakness in plan language and exploiting it at the plan’s expense. Join us for an interesting webinar that lays bare some of the easy fixes which can help prepare you for the litigation winter ahead.