Drafting subrogation/reimbursement provision: prohibited transaction t

[Guest LNB]

We are attempting to draft a subrogation/reimbursement provision for a self-funded health plan. Many commentators suggest that in drafting such a provision, the Plan explicitly EXCLUDE benefits for expenses caused by a third party, and the Plan Administrator, may, in its discretion, elect to ADVANCE payment for such expenses with the agreement that upon any recovery, the participant will reimburse the plan.

The question that has come up is this: isn't this really a prohibited transaction in that it could be considered a loan or an extension of credit under ERISA section 406(a)(1)(B), and is not excepted under ERISA section 408?