Second Circuit Upholds Plan’s Right To Reimbursement

In Thurber v. Aetna Life Ins. Co., the Second Circuit joined a majority of circuits in holding that an ERISA plan participant does not defeat the plan's right to reimbursement under ERISA Section 502(a)(3) by spending or comingling funds from which the plan seeks reimbursement.

Section 502(a)(3) of ERISA provides for "appropriate equitable relief" to enforce ERISA plan terms requiring reimbursement, but courts have struggled to define the contours and requirements for such relief. Most cases grappling with this issue involve scenarios in which the plan pays disability benefits to a plan participant who later receives other disability benefits (such as SSDI) from a non-plan source, and the initial plan has provisions requiring reimbursement. In such cases, the plan participants have often spent the disability payments by the time they receive the third party payments. This situation can also arise when the plan pays medical benefits for injuries caused by a third