ERISA-controlled health insurance plans often contain a provision that states, in sum and substance, that if the insured recovers money from a third-party (like the person responsible for causing the event that gave rise to the insured’s injuries), then he or she must reimburse the insurer for the funds that it expended toward the insured’s medical care.  In Thurber v. Aetna Life Ins. Co., 712 F.3d 654 (2d Cir. 2013), the Second Circuit held that a health insurer’s suit to enforce its rights under such a provision, filed under ERISA, can proceed notwithstanding the fact that by the time suit was filed, the funds had “dissipated” (that is, they neither remained in the insured’s possession nor were used to purchase traceable items).

On January 20, 2016, the United States Supreme Court abrogated Thurber, holding (by an 8-1 margin) that when funds otherwise subject to a lien of this nature are used to purchase nontraceable items (like food and travel), then suit under ERISA is impermissible.  That is so, reasoned the Court, because the relevant ERISA provision only authorizes suit for “equitable relief,” and when funds have been used to acquire nontraceable items, a suit to recover on the lien is one against the insured’s general assets (which makes it a claim for legal, not equitable, relief).

Montanile v. Board of Trustees of the Nat’l Elevator Indus. Health Benefit Plan, 136 S. Ct. 651 (2016)