Searched for this issue but did not find anything on point and would be grateful for anybody that might point me in the right direction for further research.

Our company received a request from the lawyer of one of our participants who was recently injured in a car accident. Per our arrangement with our TPA, the TPA is seeking subrogation / reimbursement for the health plan amounts paid on the injured participant's behalf. The lawyer has written back requesting all variety of plan documents so they can determine if our plan has an acceptable reimbursement policy. They also include a lengthy warning reminding us of the penalties for failure to respond within 30 days and for taking any action against the participant for exercising his ERISA rights. One of their requests is for certification by the Dept. of Labor that our plan is an approved ERISA Plan. In addition, they note that any reimbursement they make will be offset by a pro rata share of the attorney's 1/3 contingency fee.

I have never seen such a letter before and was just wondering if this was familiar to others? The whole thing seems a bit suspicious to me--as if it is intended either to try and scare us away from enforcing the subrogation provision and/or possibly to cause us some exposure to ERISA penalties or weakened position on the reimbursement request for failure to provide all possible plan documents in a timely fashion.

Also, I have never heard of anything along the lines of the DOL certifying that a plan is an "approved" ERISA plan so don't know where that comes from. Anybody ever seen a similar request before.

Finally, my vary limited research suggests that offsetting the reimbursement recovery for attorney fees may be possible and that this is an issue that appears to vary from circuit to circuit.

Anybody able to shed any light on these items? Thanks.

I would suggest that you insist on a signed authorization from the participant that this lawyer is representing the participant, with respect to issues involving the plan.



Never. I would simply respond that the plan has no such DoL certification (I wouldn't mention that there is no such certification process by the DoL).

As for the claim that 1/3 of whatever is recovered will be subject to the lawyer's contingent fee, I disagree. Most states Bar ethics only permit contingent fees if per written agreement--doesn't sound to me like you've agreed to this. Also, a recent case held that where the plan subro clause gave the plan a full right of recovery by the employee for the amount paid by the plan for medical and the employee agreed to such, the attorney received plan assets when he received the settlement from the tortfeasor, and held such pursuant to a fiduciary duty. Consequently, the plan was entitled to a judgment against the attorney for the amount so held.



Roy F Harmon III's blog has great discussion and analysis of cases on this topic,
http://healthplanlaw.com/?cat=17

I would not ask for a letter from the client suggested by previous poster because in most jurisdictions a letter from an attorney on behalf of a client is sufficient evidence of representation by counsel without the need for a separate attestation by the client. Demanding such a letter could result in a claim/penalty for violating 510/511 of ERISA (act by plan representative to discriminate against /intimidate a participant for exercising a right under ERISA) as noted by his attorney and can result in failure to provide requested information to the attorney within 30 days which may result in the imposition of the $110 a day penalty. I would provide all of the information requested which is required to be disclosed under ERISA, e.g., SPD, plan document, etc upon payment of an applicable fee for reproducing documents that is stated in the SPD (.25 per page). Plan can withhold documents subject to to fees until fee is paid if notice of cost is timely given.

You can repond to certification request by providing the SPD for the plan which includes the requisiste ERISA language or stating that the 5500 is filed with the DOL as a plan subject to ERISA (if plan has more than 100 participants).

You need to have counsel check the case law for offsetting reimbursement for contingency fees.