Thousands of third-party recovery claims are handled by each daybenefit plans and their representatives. In terms of private,self-funded ERISA plans, the mere threat of a §502(a)(3)(B)action against a plan participant is usually sufficient to fostersettlement discussion. The (not-so-secret) secret about filing a§502(a)(3)(B) action is that it frequently results in high legalfees and costs attributable to all parties, including the benefitplan. A large portion of any recovery vendor's caseload includesfiles worth less than $10,000.00.

More often than not, a benefit plan has the law on its side, butit's too expensive to achieve a recovery via a §502(a)(3)(B) actionif a plan participant refuses to reimburse the plan. How does aplan address this problem? Many plans opt to utilize a strategyallowing them to offset (i.e. deny) future medical bills until suchtime as the plan has recouped sufficient funds to satisfy theamount of benefits paid as a result of a third party's negligence.The threat of denying medical bills is often strongly persuasive toplan participants, especially those expecting future medicaltreatment. However, just how enforceable is such a provision giventhe recent rulings by the United States Supreme Court?