It has been two decades since FMC v. Holliday distinguished ERISA
benefit Plans from insurance policies with respect to subrogation.
The effect of that decision was, inter alia, to exempt Plans from
state "common fund" and "make whole" statutes.

At first, ERISA Plan subrogation operated as a sort of gentleman's
agreement: somebody from the Plan's TPA called somebody from
the tortfeasor's insurance company, and the Plan was reimbursed.
If there was any money left over, it went to the injured party.
Gradually, however, this simple procedure has turned into a legal
tug-of war between Plans and personal-injury attorneys.

With the staggering increases in medical health care costs, and
with more and more people viewing any personal injury as a
chance to strike it rich, personal injury lawyers have become
very reluctant to reimburse benefit Plans for even direct medical
expenditures made on behalf of a Plan member. Activist courts
and the legislatures of several states have not helped matters any.
For instance, adoption of a federal "common fund" doctrine and
"make whole" doctrine in the 9th Circuit (California), made it
practically impossible for a benefit Plan there to recover more
than a small portion of its expenditures, if any.

The U.S. Supreme Court addressed, but did not clarify the subrogation trend in Great West v. Knudsen (2002). Four years later, in Sereboff v. Mid Atlantic, the Court again addressed the issue, producing a less arcane holding which has
strengthened the legal position of ERISA Plans.

The situation in the Midwest has generally been more favorable to Plans, though the personal injury bar continues its
vigorous challenge to Plans' claims for full reimbursement. Every out-of-state court decision that proportions more to an injured party and less to a Plan emboldens local lawyers to push the envelope and demand greater concessions from local Plans.

At Wolf and Associates, P.C., an attorney is involved in the case from the time a potentially liable third party is identified until the case is settled and the reimbursement received. In this average two-year period, we contact the insurance company or personal injury attorney a dozen or more times to update the lien, answer billing questions and begin negotiation of the settlement by presenting the Plan's legal position and the legal decisions upon which it is based. We build a relationship with the adjuster or attorney and are often involved in the final settlement conference or mediation. In the event that the attorney or adjuster is unwilling to reimburse, we file suit or interplead in the underlying
court case. We report the circumstances of every case to the Plan administrator along with a legal opinion as to the best decision in that case. The Plan administrator, and not a service company, then makes the final decision regarding settlement.

In addition to the maximization of subrogation recovery, Wolf and Associates intimate involvement in each subrogation case provides three very important benefits that are not immediately apparent:

First, it allows us to discover fraud and misrepresentation before much or any Plan money has been expended. While we receive no compensation for this benefit, (no payment = no recovery = no fee) it is an advantage for the Plan which arises because the relationship between the Plan and Wolf and Associates is that of attorney-client, rather than just a caveat emptor business deal.

Second, it allows the Plan to coordinate benefits. Wolf and Associates investigates each claim before the Plan pays any benefits. If there is other, primary coverage, that entity is contacted and its coverage exhausted BEFORE the Plan pays any money. In cases with large med-pay benefits, for example, this benefit often prevents the Plan from paying any benefits at all. Again, there is no charge for this service (no payment = no recovery = no fee). Other companies generally pay first, and then try to recover, which costs the Plan, in the best case, a recovery fee. We enable your Plan to pend claims until the primary coverage is paid.

Third, Wolf and Associates keeps abreast of the important local and national court decisions regarding ERISA subrogation. This enables us to advise the Plan when changes in the Plan Document become necessary, and to draft those amendments if the Plan so desires. In this way we prevent or minimize the costly catch-up period when new legal interpretations prevent old Plan language from protecting the Plan.