Subrogation Issues

[Guest JD698]

Although I know that state law is pre-empted when dealing with ERISA plans and subrogation issues, a defendant in a case seeking a constructive trust over a member's recovery from a third party for personal injuries is claiming that because the member paid "premiums" reimbursing the Fund would be unjust enrichment. The Defendant's attorney is confusing premiums and employer contributions. (The defendant is the employer).

Under these circumstances, if state law did apply, would premiums and contributions be treated differently?

Any information would be helfpul.

[Guest eafredel]

State law is not automatically preempted if the plan is insured (as opposed to self-insured), since ERISA does not preempt state insurance laws. However, if the health plan is self-insured, state laws limiting subrogation rights may be preempted. You should contact counsel for a complete review of this issue, since subrogation issues can be complex. Some case law recognizes a constructive trust under federal common law.