The U.S. Court of Appeals for the Second Circuit has ruled that New York’s anti-subrogation statute, N.Y. Gen. Oblig. Law § 5-335(a), applies both to “offsets” for prospective benefit payments and to reimbursements for prior benefit disbursements. In so holding, the Second Circuit ruled that a Plan’s choice-of-law provisions may not be dispositive of which jurisdiction’s anti-subrogation statute will apply to govern disbursement and/or recovery of that Plan’s assets.
The case, Arnone v. Aetna Life Ins. Co., 860 F.3d 97 (2d Cir. 2017), arose after the plaintiff-appellant, Salvatore Arnone, a New York resident, was injured while working in New York at the site of a customer of his employer. Arnone filed for, and received, disability benefits through an ERISA-governed plan (“Plan”) insured and administered by Aetna. Arnone also commenced a personal injury action in New York state court against his employer’s customer. Arnone eventually settled the personal injury suit for a lump-sum payment.
Continue Reading Second Circuit Clarifies New York Anti-Subrogation Law Prohibits Offsets For Settlements; Declares Plan’s Choice-of-Law Provisions May Not Govern Offset And Subrogation Rights