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Governmental Self-Funded Plans


Guest Campbell
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Guest Campbell

Our health care plan is a self-funded governmental plan not subject to ERISA. For many years, this plan has enforced a subrogation clause. Anti-subrogation rules apply in our state (NC) but may be preempted by ERISA for self-funded plans.

Since we are not an ERISA plan, but are self-funded, can we enforce our subrogation clause?

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Guest Ralph Amadio

Can't speak to your state law, however you state that you have a non-subrogation law. We had a somewhat analagous problem in California with self-direction of investments. ERISA provides 404©, governmental plans are not covered by ERISA. We went to the Legislature and were able to obtain a sponsor (now Congressman Gary Miller® of California) for legislation to provide for "mirror language" to ERISA in our California Government Code. The Legislation was passed into law, and we now have fiduciary layoff in California that was not available, and in fact specifically prohibited before the law was passed.

I would suggest that you check with your Legislative Counsel in the State Capitol to determine the status of the non subrogation law as it applies to governmental plans. If it does, my guess is that you are stuck with it, unless you can get the law changed relative to governmental plans. Incidentally, if your experience is anything like mine, you will get insurers and other providers that will give you opposite opinions.

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