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Hope for Self-funded Plans in Connecticut..

By: Chris Aguiar, Esq.

Subrogation is tough.  Even the best language possible is susceptible to issues like limited funds, or worse, a Plaintiff’s attorney who refuses to acknowledge the realities of the law.  Of course, self-funded benefit plans who find themselves subject to state law, such as government entities, can find themselves in even worse positions when located in certain areas of the Country.  New York, New Jersey, and Pennsylvania, to name a few, are notoriously averse to the rights of benefits plans.  Connecticut was among the worst on that list …until now.  As of October of 2017, the State of Connecticut has enacted an exception to its anti-subrogation law which will give self-funded benefit plans some reprieve.  

Connecticut HB 6221 takes its cue from some of the other anti-subrogation states who have provided an exception to their law for cities, towns, and municipalities; allowing them to take advantage of some more of the cost saving benefits of self-funded plans.  Specifically, it allows self-funded local government entities with a third party interest to seek recovery from judgments or settlements obtained by plan participants.  While this is great news, this change doesn’t come without limitations.  The bill appears to only allow recovery from the part of the judgment or settlement that represents payments for medical, hospital, or prescription expense damages.  This will no doubt entice plan participants and their lawyers to structure settlements in such a way as not to include those damages.  Either way, it gives plans, administrators, and their recovery partners another tool to utilize.




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