Does a fully self-funded ERISA employee welfare program lien have to be repaid dollar-for-dollar from a personal injury recovery?

Whether a fully self-funded ERISA employee welfare program lien has to be repaid dollar-for-dollar from a personal injury recovery will depend on the specific terms of the plan documents and the applicable laws.

ERISA (Employee Retirement Income Security Act) regulates employee benefit plans, including self-funded employee welfare plans. These plans are allowed to include provisions that create a lien or a right of reimbursement for benefits paid by the plan in certain circumstances, such as when the participant is injured and receives a settlement or judgment from a third party.

Under ERISA, if the plan includes a valid reimbursement provision, then the plan is entitled to recover the amount it paid for medical expenses from any settlement or judgment the participant receives from a third party. However, the plan may be subject to a “common fund” doctrine or other equitable principles that limit the amount the plan can recover based on the participant’s proportionate share of the attorney fees and costs incurred in obtaining the settlement or judgment.

Therefore, it’s important to review the plan documents and applicable laws to determine whether the plan has a valid lien or right of reimbursement and what limitations, if any, may apply to the plan’s recovery. It’s also important to work with an experienced attorney to negotiate any liens or reimbursement claims and to ensure that the participant receives the maximum recovery possible.