The
U.S.
Supreme
Court
has
held
that
a
self-insured
health
plan
may
not
exercise
reimbursement
rights
against
a
plan
participant
after
settlement
proceeds
recovered
by
the
participant
from
a
third
party
have
been
spent
or
otherwise
“dissipated.”
In
the
case,
the
plan
paid
$120,000
toward
medical
expenses
incurred
by
the
participant
after
he
was
injured
by
a
drunk
driver.
The
participant
later
recovered
a
$500,000
settlement
from
the
drunk
driver.
The
plan
was
entitled
to
seek
reimbursement
of
$120,000
from
the
settlement,
but
it
did
not
take
adequate
steps
to
enforce
its
rights.
By
the
time
the
plan
brought
suit
to
enforce
its
right
to
reimbursement,
the
settlement
proceeds
had
been
paid
to
the
participant
and
were
gone.
The
plan
attempted
to
recover
the
$120,000
from
the
participant,
but
the
court
held
that
the
equitable
remedies
available
under
ERISA
did
not
include
a
right
to
obtain
payment
from
the
participant
after
the
settlement
dollars
were
no
longer
in
an
identifiable
fund.
The
take-away?
A
self-insured
health
plan
with
a
right
to
subrogation
or
reimbursement
must
assert
its
claim
while
the
proceeds
of
a
judgment
or
settlement
are
still
in
an
identifiable
fund,
such
as
the
trust
account
of
the
lawyer
representing
the
participant
in
the
personal-injury
action.
Otherwise,
there
may
be
nothing
left
from
which
to
seek
recovery.
A
copy
of
the
court's
opinion
is
available
here.