The U.S. Supreme Court on Monday is scheduled to hear oral arguments in a case that pits insurers against beneficiaries when it comes to who's entitled to money won in court after an injury.
The case, Montanile v. Board of Trustees of the National Elevator Industry Health Benefit Plan, centers on this question: If a plan's beneficiary wins money in court for an injury but then spends it, should the beneficiary still have to reimburse his or her insurance plan for the medical expenses it paid?
The plan says it's entitled to the money as part of the deal struck with the beneficiary when he agreed to coverage. It argues that plans make more than $1 billion a year from such reimbursements, and allowing beneficiaries to skip out on those payments could affect the affordability of plans.
“The rule Montanile advocates—barring reimbursement where a beneficiary has spent down the promised fund—will reduce reimbursement recoveries and increase plan costs,” the plan's lawyers argue in court documents.
Meanwhile, lawyers for Robert Montanile argue that insurers are not allowed under the federal Employee Retirement Income Security Act, known as ERISA, to demand reimbursement when the money has already been spent. Montanile, who was injured when a drunken driver struck his vehicle, spent the $500,000 he won in court on ongoing medical expenses, lawyers' fees and living expenses for him and his daughter.
Radha Pathak, an attorney for Montanile who is of counsel with Stris and Maher, called the plan's concern that a decision against it could lead to large-scale problems for insurers “overblown.” Lower courts that considered the case ruled in favor of the insurance plan.
