On April 16, 2013, the U.S. Supreme Court unanimously decided in US Airways, Inc. v. McCutchen that equitable doctrines, such as unjust enrichment or the common-fund doctrine, cannot be used to override a health benefit plan’s reimbursement provision.
The facts are straightforward. The plaintiff was injured in an automobile accident, and his health plan paid his medical costs. The plaintiff also sued and recovered from his and the other driver’s automobile insurance. Based upon plan language which entitled the plan to be reimbursed for such recovery, the plan sought reimbursement from the plaintiff for his insurance recovery. Applying equitable doctrines, the Third Circuit had limited the plan’s recovery. The Supreme Court reversed, however, and held that equitable doctrines do not take precedence over the terms of the plan which clearly established that the plan was entitled to reimbursement.
McCutchen is instructive and deems plan terms as supreme so long as such terms are not ambiguous. In light of this, plan sponsors should review their plan’s provisions to eliminate any ambiguities.