Latest Plan Subrogation Case Decided in Maryland

February 17, 2003 ( - The issue of ERISA preemption of legal claims under state laws continues to be a hot one in employee benefits case law with the latest contribution last week coming from a Maryland case.

That’s where US District Judge Deborah Chasanow of the US District Court of Maryland ruled that ERISA does not bar a Maryland law from demanding subrogation from their patients, Washington-based legal publisher BNA reported.

Chasanow found that the subrogation claim was not preempted by ERISA because the legal issue involved did not deal with how the plan implemented a plan provision. “[The plaintiff] here is not seeking any interpretation of her plan. Rather, she contends that the plan, which clearly provides for subrogation, violates Maryland’s anti-subrogation law. As such, [the plaintiff] is not attempting to enforce a provision of her plan in any way,” Chasanow said.

In the latest case, Shade Popoola was covered under an ERISA-governed HMO health plan administered by MD-Individual Practice Association. The plan contained a subrogation provision allowing it to recover money received from a third-party as a result of an injury.

In September 2000, Popoola received $20,000 from another insurer to resolve a claim arising from an automobile accident. The plan filed a lien against the recovery, and Popoola paid it $3,368 to resolve the lien. Popoola sued the plan in state court and the plan had it transferred to federal court, which has jurisdiction over the federal ERISA. The latest case is Popoola v. MD-Individual Practice Association Inc., D. Md., No. DKC 2000-2946, 2/13/03.

The umbrella issue of ERISA preemption has generated a great deal of court activity in recent months (See HMO Subrogation Claims Stay in Federal CourtERISA Preemption Debate Continues In Keystone State  , Preemptive ‘Strikes’ ).