By: Chris Aguiar, Esq.
Subrogation added another case to the win column last week when the 5th Circuit ruled in favor of a benefit plan’s reimbursement rights even though the Plan only had an SPD, and that SPD referenced another, nonexistent document. I know what you are thinking … “Wait a minute, Chris, most of my clients only have an SPD, so why should I care about this?” The answer is because in 2011, the Supreme Court gave us a decision in Cigna v. Amara that muddied the waters on whether an SPD alone can be the governing document for an ERISA health benefit plan. In short, the late Justice Antonin Scalia indicated that it couldn’t be, but that case was about pension benefits that were being altered and it included a plan that did in fact have two documents. The truth is ERISA requires “a written instrument”; nowhere in the statute is that requirement defined to mean that multiple documents are required, but that didn’t stop Justice Scalia from writing in his opinion that a summary by definition implies that a more comprehensive document is available. Many attorneys attempt to use that decision to argue that if a plan doesn’t have a “plan document” and only an SPD, it cannot enforce its rights. In some areas of the country, where a plan’s subrogation rights are always under attack (e.g. the 9th Circuit), decisions like this cause problems. Anytime the Supreme Court makes statements that may be subject to interpretation, a plan’s rights can be called into question until a court in that plan’s jurisdiction (or the Supreme Court itself) provides clarification. The 5th Circuit gave us that clarification with this decision and it gives us another tool to fight the argument we contend with every day.