Dealing With Federal ERISA Under Florida Law in Personal Injury & Workers’ Compensation Cases

Florida lawyers who represent individuals injured in accidents must be aware that some of the proceeds recovered in a case may have to be reimbursed to entities who have paid for accident-related medical care. If benefits were paid through an individual health insurance plan, whether and to what extent the carrier has a right of subrogation is a matter of contract (the insurance policy) and state law, Florida Statute 768.76. With regard to group policies provided in connection with employment, it was long believed that subrogation rights were exclusively a matter of contract, the Plan Summary, and federal law, the Employment Retirement Income Security Act (ERISA). It was felt that Florida Statute 768.76 played no role in determining group insurance subrogation rights.

Coleman v. Blue Cross and Blue Shield of Alabama, Inc. So.3d , 35 FLW D2718 (Fla. 1st. DCA 12-8-2010) may have changed the landscape.

After successfully settling a personal injury action in federal court, Coleman (the plaintiff and a member of a group plan) filed a complaint in state court requesting a declaratory judgment prohibiting the insurer from seeking subrogation against the settlement proceeds. The plaintiff’s complaint alleged that the insurer had not met the pre-subrogation requirements of Florida’s Collateral Source Statute Section 768.76(7). Therefore, according to the plaintiff, Blue Cross Blue Shield had waived its right to subrogation.

BCBS filed a motion to dismiss the complaint on the bases that (1) the state statute was inapplicable as it was preempted by the ERISA; and (2) the trial court lacked subject matter jurisdiction because the federal court had exclusive jurisdiction to hear matters related to ERISA. The trial court agreed and dismissed the action. The First District Court of Appeal reversed the trial court’s ruling and remanded the matter back to the trial court to make some evidentiary determinations.

In the court’s opinion, state law may regulate “an insurance company or other insurer, bank, trust company, or investment company or to be engaged in the business of insurance,” while an employee-funded plan is outside the jurisdiction of state law. Importantly, the court considers plans funded by the employer or a union to be engaged in the business of insurance and, thus, subject to the state law.

Accordingly, the DCA directed the trial court to determine if the plan effected is a self-insured employee benefit plan or an underwritten insurance plan.

This is a monumental ruling because it opens the door for state law to be applicable in some circumstances. The significance is that the Florida statute is more favorable to insureds with regard to subrogation than ERISA. State law can require the insurance company to compromise its subrogation recovery, while ERISA does not.
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Jeffrey P. Gale, P.A. is a South Florida based law firm committed to the judicial system and to representing and obtaining justice for individuals – the poor, the injured, the forgotten, the voiceless, the defenseless and the damned, and to protecting the rights of such people from corporate and government oppression. We do not represent government, corporations or large business interests.