Trust’s
Right To Reimbursement (Third-Party Liability)
The plan
excludes benefits if a retiree, spouse or dependent child is injured from an
illness or injury caused by the act or omission of another person (known as the
“third party”), and the retiree, spouse or dependent child recovers
from the third party or the third party’s
insurer. If a
retiree, spouse or dependent child is pursuing a claim or lawsuit against a
third party or insurer for an illness or injury caused by the act or omission of
the third party, the plan may initially advance payment for benefits related to
the third-party illness or injury. However, the retiree, spouse or dependent
child agrees that the plan’s payment related to the illness or injury is
conditioned on repayment from any recovery from the third party or the third
party’s insurer, under an automobile policy, commercial premises policy,
homeowners policy, medical malpractice policy, renters policy, or any other
insurance coverage or liability policy, and the plan shall be entitled to first
dollar priority and to 100 percent reimbursement from the retiree, spouse or
dependent child, with respect to any full or partial recovery by the retiree,
spouse or dependent child whether by judgment, settlement, award or otherwise,
from any third party, insurer or persons making payments on behalf of a third
party, unreduced by any legal or other costs expended by the retiree, spouse or
dependent child and regardless of whether the retiree, spouse or dependent child
is made whole by the
recovery. In
addition, the retiree, spouse or dependent child must execute, in writing, an
agreement acknowledging this reimbursement right, the name and address of the
party at fault, the name of any insurance company through which coverage may be
available, the name of any other lien holders involved and a factual description
of the accident and/or
injury. The
retiree, spouse or dependent child also agrees that such funds will be paid into
a trust account and held there until the plan’s claim is resolved by
mutual agreement or court order. The obligation to place the reimbursement
amount in trust is independent of the obligation to reimburse the plan. If the
funds necessary to satisfy the plan’s reimbursement amount are not placed
in trust, the retiree, spouse or dependent child or the individual named to hold
the funds in trust shall be liable for any loss the plan suffers as a
result. If the
plan is forced to bring a legal action against the retiree, spouse or dependent
child to enforce the terms of this plan provision, it shall be entitled to its
reasonable attorney fees, costs of collection and court
costs. The plan
may deny coverage in such cases if there is a reasonable basis to determine this
provision is not enforceable, or if there is a reasonable basis for believing
that the parties involved will not honor the terms of this provision or the
Board of Trustees modify this provision related to advancing benefits when a
third party recovery is anticipated. The plan may also deny coverage for
expenses incurred after judgment or settlement of the claim, if such expenses
are related to the third-party recovery. In addition, the plan may offset future
benefits, including those of family members, by denying such payments until it
is
reimbursed for
the benefits provided that are related to the third-party
recovery. The
retiree, spouse or dependent child expressly covenants not to raise ERISA
jurisdiction and procedural issues and affirms the plan’s right to bring a
breach of contract action in state court to enforce the plan’s right to
reimbursement under this plan provision and affirms the plan’s right to
seek a constructive trust in federal court under ERISA 502(a)(3) to recover the
funds received by the retiree, spouse or dependent child from a third party
according to this plan provision.
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