The Unit­ed States Supreme Court decid­ed in Mon­tainile v. Board of Trustees of the Nation­al Ele­va­tor Indus­try Health Ben­e­fit Plan that a plan admin­is­tra­tor may not bring a sub­ro­ga­tion claim against a par­tic­i­pant whose third par­ty set­tle­ment is dis­persed into non-trace­able items.
The deci­sion is actu­al­ly not that clear cut. The plain­tiff had filed a neg­li­gence claim for unin­sured motorist’s insur­ance, obtained a set­tle­ment of $500,000, but the trustees of the plan did not file their claim with­in the time lim­it set by the plaintiff’s attorney…and thus were denied reim­burse­ment. The court upheld orig­i­nal deci­sions to deny the pay­ment, main­ly because of the tim­ing issue.