In late February, 2015, the U.S. Supreme Court denied review of the Second Circuit’s Opinion/Decision in Wurtz v. Rollins Co., LLC matter – F.3d –, 2014 W.L. 3746801(2nd Cir. 2014). There was a split between the Second, Third, Fourth and Fifth Circuits.
Wurtz was a class action on behalf of plaintiffs with employer sponsored health insurance programs. Rollins, Oxford Health Plans, and United Health Group were sued. A New York Court found that a New York General Law, specifically 5-335, was too limited in scope and excluded reimbursement and subrogation rights, falling outside of any tort settlement. Subsequently, the New York Legislature enacted a revision to 5-335 and substituted the word “insurer” for the words “benefit provider” to put the law directly under the umbrella of ERISA’s Savings Clause. The clarification is meant to eliminate any confusion as to whether an insured ERISA claim came under the definition of “statutory reimbursement right.”
In July, 2014, the U.S. Court of Appeals reversed the Lower Court’s decision holding that the New York General Law 5-335 was “saved” from preemption. The Supreme Court’s denial of Certiorari supports the Second Circuit’s holding that New York General Law 5-335 is applicable as it relates to a fully insured ERISA plan in the State of New York. This decision does not affect employer sponsored health benefit arrangements, which are funded through the general assets of a company.