July 1st 2006
In a unanimous decision (Sereboff v. Mid-Atlantic Med. Svcs.) released on May 15, 2006, the U.S. Supreme Court permitted a health insurer to enforce a reimbursement provision against a participant. The plan had paid approximately $75,000 for the treatment of injuries suffered by the participant, Marlene Sereboff, and her spouse, who subsequently received $750,000 pursuant to a third-party tort settlement. The health plan provided that a participant who is injured by another person and receives benefits under the plan for such injuries must reimburse the plan from any amount recovered, without reduction, for failure to receive the full damages claimed. When the participant refused to comply with this reimbursement provision, the insurer obtained an injunction requiring the Sereboffs to set aside sufficient funds from the settlement, pending a final ruling in the case.