Can an ERISA Plan Recover from a Wrongful Death settlement in Missouri or Illinois?

The short answer is: Probably not. See below for details.

In many personal injury cases healthcare providers, health insurance companies, or employer health plans, place liens on your personal injury claims to try and get paid back for money spent on the injured or deceased person’s medical care.

In many Missouri cases Missouri law will dictate what must be paid back and what does not need to be paid back. In non-death cases often the amount cannot exceed 50% of what the injured person recovers after attorney fees and costs, assuming a valid lien exists.

Recovery of Medical Bills in Death Cases through liens:

Missouri law precludes medical liens on wrongful death cases. Meaning the money from a settlement or verdicts of a wrongful death verdict case goes to the family and does not go to pay back health insurance companies.

However, ERISA Liens are not always subject to state law they are determined by Federal law. Therefore, sometimes and ERISA lien can take all of a persona injury settlement. There are many factors that a good wrongful death attorney must determine, such as notification of the claimed lien, who the plan participant is, is the ERISA plan self-funded or just really a group insurance plan purchased by the company?

Can an ERISA Lien recover from a Wrongful Death settlement in Missouri? NO!

The people who assert ERISA liens will tell you that since State law does not apply to ERISA plans you cannot prevent an ERISA lien on a Missouri or Illinois wrongful death case. I believe that in most cases they are wrong and the Federal Courts have supported that outcome.

In Caterpillar, Inc. v. Wilhelm 824 F.Supp.2d 828 (Illinois District Court 2009),  the court held that and ERISA does not Preempt a State’s Wrongful Death Act:

” [Caterpiller] cannot reach settlement funds properly allocated under the Illinois Wrongful Death Act to Wilhelm’s beneficiaries. The leading cases from the federal appellate courts on this subject matter are two Fourth Circuit cases: Liberty Corp. v. NCNB National Bank of South Carolina, 984 F.2d 1383 (4th Cir.1993) and McInnis v. Provident Life & Accident Ins. Co., 21 F.3d 586 (4th Cir.1994).”

The court shave addressed this issue related to Illinois and Carolina’s wrongful death act, both acts are very similar to Missouri’s wrongful death act. Therefore, I believe if this issue comes up related to a Missouri case the courts will likely rule in the same fashion and hold that Federal ERISA law does not preempt state law in wrongful death cases.

Liens are a major part of most personal injury claims and cases and they must be addressed early and aggressively or they can end up eating away at your settlement or verdict. Have a personal injury case, worried about medical bills, and don’t know who has to be paid back? Contact the injury lawyers at Sansone & Lauber for free at (314) 863-0500.