In Steffens v. Blue Cross Blue Shield of IL, 2011 WI 60 (July 2011), the Supreme Court of WI ruled in favor of an ERISA plan despite earlier contrary rulings by the original Trial Court and Appeals Court.
The case involved a $64,000 lien where only a policy limit of $100,000 was available. As is typical in WI, the Plan was named as a defendant. The member argued that they were not Made Whole – not fully compensated for their injuries by the $100,000 settlement. The Plan cross claimed arguing that Made Whole did not apply, citing their plan language that rejected application of the Made Whole Doctrine. There were other issues in the case, including whether the entire lien was actually related to the accident.
The Trial Court agreed with the Plan that Made Whole did not apply and in effect gave the Plan the benefit of the doubt that the entire lien was in fact related because it did effect a settlement. The Appeals Court, however, reversed the trial Court and ruled that the Plan must prove relatedness because the Plan did not contain a provision allowing it to recover for benefits not related.
Finally, the WI Supreme Court settled the issue and found in favor of the Plan agreeing that the Plan’s determination of relatedness was not unreasonable. The Court further ruled that Made Whole did not apply because the language in the Plan specifically called for reimbursement regardless of whether the member was made whole.
