Yesterday, the U.S. Supreme Court unanimously handed the ERISA-governed health plan community a major victory. Chief Justice Roberts' opinion in Sereboff v. Mid Atlantic Medical Services, Inc., -- U.S. --, No. 05-260, now permits ERISA-governed plans to enforce in federal court equitable liens on judgments and settlements that are subject to the plan's contractual subrogation rights. I believe that this opinion undoes much of the damage to legitimate ERISA plan subrogation efforts created by the Supreme Court's 2002 opinion in Great-West Life & Annuity Ins. Co. v. Knudson, 534 U. S. 204.
If private sector ERISA plans can enforce their subrogation rights in federal court, why shouldn't the Court similarly rule in the McVeigh case (argued April 25) that FEHB plans have the same right, particularly when the funds which they recover are deposited in the U.S. Treasury. Sereboff adds support to my prediction that the Supreme Court will rule in Empire Blue Cross's favor in the McVeigh case (see April 26 post).