Supreme Court Weighs in on Remedies Available Under ERISA

On January 8, 2002, the Supreme Court issued a 5-4 decision in Great-West Life & Annuity Ins. Co. v. Knudson, 2002 WL 15399 (Jan. 8, 2002). This case addresses the remedies available under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). On behalf of the majority, Justice Scalia wrote that a benefit plan could not sue under ERISA to obtain reimbursement of medical benefits paid on behalf of a plan beneficiary despite a plan provision authorizing such reimbursement. Unfortunately, the decision raises more questions than it answers. Nevertheless, the decision creates hurdles that must be overcome in every case where a plan seeks to enforce a reimbursement provision or to recover overpayments from beneficiaries. At the same time, the decision will be cited by plan fiduciaries as creating new hurdles to individual claims for alleged breaches of fiduciary duty. Only future litigation will define the heights of these new hurdles.

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