Dead Man’s Sister Owes Union Health Fund $237K

Employee Benefits News examines legal developments that impact the employee benefits and executive compensation employers provide, including federal and state legislation, rules from federal...

By Jacklyn Wille

A union health fund can take $236,700 from a wrongful-death settlement paid in connection with a deceased worker whose medical expenses were covered by the fund, a federal appeals court ruled ( Mackey v. Johnson , 2017 BL 293552, 8th Cir., No. 16-1886, 8/22/17 ).

The Minnesota Laborers Health & Welfare Fund can recoup the full amount it paid for the participant’s lung cancer treatment out of the settlement his sister received from the hospital that allegedly mishandled his care, the U.S. Court of Appeals for the Eighth Circuit held Aug. 22. The settlement agreement was unclear as to whether it included medical expenses, but other evidence showed that those expenses were included in the settlement amount, the Eighth Circuit said.

The case presents an example of the thorny issues that can arise when a person’s accidental death or injury leads to settlement from the at-fault party after the person’s health plan pays for medical care—a situation addressed by the U.S. Supreme Court in 2013 and 2016.

In this case, the Eighth Circuit said the health fund could assert its subrogation rights against the settlement, even though the settlement agreement didn’t specifically identify medical bills as one of the included expenses. That’s because the participant’s sister initially sought medical expenses in her lawsuit against the hospital, and because she told a federal judge that this claim had been settled, the Eighth Circuit said.

Judge Steven M. Colloton wrote the decision, which was joined by Judges James B. Loken and Jane Kelly.

McGrann & Shea represents the health fund. Meshbesher & Spence represents the participant’s sister. Gislason & Hunter represents the hospital.

To contact the reporter on this story: Jacklyn Wille in Washington at jwille@bna.com

To contact the editor responsible for this story: Jo-el J. Meyer at jmeyer@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

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