Delinquent Employer Contributions Offset Against Member Health Benefits

[Guest JNH]

Member is eligible for benefits under a collectively-bargained, multiemployer health plan. Member's eligibility relates to work performed as an employee for an employer contributing to the plan via CBA. Member also formed an LLC, of which he is the single member and single employee, which is also an employer obligated to pay into that plan via CBA. However, the LLC did not make contributions for certain hours worked by the Member for the LLC. Thus. the LLC owes delinquent contributions.

Assuming that the Member could be held personally liable for the delinquent contributions under either an alter ego theory or a fiduciary liability theory, we are left with the situation where Member is owed benefits by the health plan, but also owes the health plan for delinquent contributions for hours worked for the LLC.

Can the health plan setoff the delinquent contributions personally owed to the plan by Member against benefits owed under that plan to the Member? If so, must the plan get a judgment of personal liability and the amount owed first to avoid creating liability for the plan? None of the plan documents address this unique issue of a single individual functioning as an employee in some cases and the employer in another.

Any guidance on this issue is much appreciated.

JHG