Jean LEVINE, On behalf of herself and all others similarly situated v. UNITED HEALTHCARE CORPORATION, et al.
Nos. 04-1224, 04-1225
United States Court of Appeals, Third Circuit
Argued Dec. 15, 2004. Decided March 16, 2005.
402 F.3d 156
NYGAARD, Circuit Judge.
Before NYGAARD and GARTH, Circuit Judges and POLLAK, District Judge.
Edward S. Wardell, (Argued), Kelley Wardell & Craig, Haddonfield, NJ, for Appellants/Cross Appellees Horizon Blue Cross, etc., et. al.
Donna S. Moffa, (Argued), Trujillo Rodriguez & Richards, Haddonfield, NJ, for Appellees/Cross Appellants Noreen Bogurski.
Frank P. Solomon, (Argued), Weitz & Luxenberg, Cherry Hill, NJ, Natalie Bennett, Shepherd Finkelman Miller & Shah, Washington Professional Campus, Turnersville, NJ, for Appellees/Cross Appellants Jean Levine, etc.
Before NYGAARD and GARTH, Circuit Judges and POLLAK,* District Judge.
OPINION OF THE COURT
NYGAARD, Circuit Judge.
These interlocutory cross-appeals require us to address two different facets of the preemptive power of the Employee
I.
Jean Levine, Noreen Bogurski, and Benjamin Edmondson (the “Insureds“) were injured by third-parties in separate, unrelated events and are the Appellees/Cross-Appellants in this appeal. Their health insurance providers, United Healthcare Corporation and Horizon Blue Cross and Blue Shield of New Jersey,1 are the Appellants/Cross-Appellees (the “Providers“). At the time of the injuries, the Providers fulfilled their responsibilities to the Insureds under each health insurance policy by paying at least a portion of the Insureds’ medical expenses.
Each Insured then filed suit against the third party responsible for his or her injury. At that time, a New Jersey Department of Insurance Regulation permitted health insurance policies to include reimbursement and subrogation clauses.
Subsequent to these settlements between the Insureds and the Providers, the New Jersey Supreme Court announced a decision in Perreira v. Rediger, 169 N.J. 399, 778 A.2d 429 (2001), holding that the Department of Insurance regulation conflicted with a New Jersey statute, and thus, was invalid.4 As a result, subrogation and reimbursement provisions are no longer permitted in New Jersey health insurance policies. Notwithstanding their earlier settlements, the Insureds sued the Providers in New Jersey state court to recover the amounts they paid to reimburse the Providers.
II. The District Court Proceedings
After being sued in New Jersey state court, the Providers removed the cases to federal court claiming complete ERISA preemption under section 502(a)(1)(B) of ERISA. The District Court denied the Insureds’ motion to remand to state court. Concluding that the question of removal was a “conceptually unclear area of law,” the District Court nonetheless determined that the Insureds sought to “recoup a benefit due under the plan,” and thus, their claim was properly removed. The Court also denied the Insureds’ request to certify the issue for appeal at that time.
The Providers also filed a motion to dismiss the claims. First, the Providers claimed that ERISA preempted New Jersey‘s statute; therefore, the statute did not apply to ERISA-governed plans. Second, they argued that the Perreira decision should not be applied retroactively.
The District Court concluded that the New Jersey statute was a statute “regulating insurance,” and thus, was “saved” from ERISA preemption. First, as directed by the Supreme Court in Pilot Life Insurance Co. v. Dedeaux, 481 U.S. 41, 50, 107 S.Ct. 1549, 95 L.Ed.2d 39 (1987), the District Court made the “common sense determination” that the law was specifically directed toward the insurance industry because it was intended to directly affect and regulate that industry. Second, the Court tested the results of its common sense determination by examining the three factors listed in the McCarran-Ferguson Act5 and
Having determined that New Jersey‘s statute applied to ERISA-governed plans, the District Court turned to the question of whether the Perreira decision should be applied retroactively. The District Court determined that, under New Jersey law, prospective application6 is appropriate only if: “(1) the parties and the community justifiably relied on the prior rule, (2) the purpose of the new rule will not be advanced by retroactive application, and (3) retroactive application of the rule may have an adverse effect on the administration of justice.” (App. at 40 (citing Coons v. American Honda Motor Co., 96 N.J. 419, 476 A.2d 763, 767 (1984))). Here, the District Court concluded that the Perreira decision reflected New Jersey‘s existing law and was not new and unanticipated. Consequently, it held that the Perreira decision applied retroactively.
Following the denial of the motion to dismiss, the District Court certified three issues for interlocutory appeal pursuant to
- whether the antisubrogation rule contained in
N.J.S.A. 2A:15-97 , as interpreted by the New Jersey Supreme Court in Perreira v. Rediger, 169 N.J. 399, 778 A.2d 429 (2001), applies to defendant health insurers because it is not conflict preempted under ERISA section 514(a) because it is “saved” as a state law that regulates insurance; - whether Perreira v. Rediger, 169 N.J. 399, 778 A.2d 429 (2001), applies retroactively to plaintiffs’ pre-Perreira health insurance plans; and,
- whether plaintiffs’ unjust enrichment claims for monies taken pursuant to subrogation and reimbursement provisions in their ERISA health plans are claims for “benefits due” within the meaning of ERISA section 502(a).7
We granted permission for the appeal (issues one and two) and cross-appeal (issue three) on January 16, 2004 and have jurisdiction pursuant to
III. The Removal Claim: Preemption under Section 502(a)
We address the cross-appeal first because it requires us to examine our jurisdiction. We exercise plenary review over challenges to our subject matter jurisdiction. Pryzbowski v. U.S. Healthcare Inc., 245 F.3d 266, 268 (3d Cir.2001). See also Arana v. Ochsner, 338 F.3d 433, 437 (5th Cir.2003) (en banc).
Section 502(a) allows a participant in an ERISA plan to bring a civil action to “recover benefits due to him under the terms of his plan, to enforce his rights under the terms of the plan, or to clarify his rights to future benefits under the terms of the plan.”
In Pryzbowski, we laid out a framework for determining whether a case is completely preempted under section 502(a) of ERISA. In order to ensure that Congress‘s intent of giving section 502(a) “extraordinary preemptive force” was fulfilled, we utilized the two categories of ERISA cases, originally set out by the Supreme Court in Pegram v. Herdrich, 530 U.S. 211, 120 S.Ct. 2143, 147 L.Ed.2d 164 (2000). Pryzbowski, 245 F.3d at 271. The first category involves cases where the claim challenges the administration of, or eligibility for, benefits. These cases fall within the scope of 502(a) and are preempted. Id. at 273. The second group of cases challenges the quality of the medical treatment performed and is not preempted. Id. As noted by the District Court, this case does not fall squarely within either category. Thus, we must look beyond the framework set out in Pryzbowski to determine whether this case falls within section 502(a).
At the time of the District Court‘s ruling on the removal question, May 28, 2002, no Court of Appeals had considered whether the type of case before us was preempted under section 502(a) of ERISA. Since the District Court‘s initial ruling, however, the
As it stands, Arana‘s benefits are under something of a cloud, for OHP is asserting a right to be reimbursed for the benefits it has paid for his account. It could be said, then, that although the benefits have already been paid, Arana has not fully ‘recovered’ them because he has not obtained the benefits free and clear of OHP‘s claims. Alternatively, one could say that Arana seeks to enforce his rights under the terms of the plan, for he seeks to determine his entitlement to retain the benefits based on the terms of the plan. Id.
In Singh, the Fourth Circuit addressed whether claims of unjust enrichment and negligent misrepresentation relating to subrogation and reimbursement actions of the insurer were claims for “benefits due.” Like the Fifth Circuit, the Fourth Circuit found that ERISA controlled and removal was appropriate because subject matter jurisdiction is not affected by “the fortuity of when a plan term was misapplied to diminish the benefit.” Singh, 335 F.3d at 291 (emphasis in original).
Here, the Insureds claim that they were entitled to certain health benefits and that the Providers wrongly sought the return of those benefits. Even more than in Arana, the Insureds’ claim here is for benefits due. The Insureds have already paid back a portion of their benefits. Thus, they claim essentially that they are entitled to have certain health insurance claims paid under their ERISA plans. It is impossible to determine the merits of the Insureds’ claims without delving into the provisions of their ERISA-governed plans.
We agree with the reasoning of the Courts of Appeal for the Fourth and Fifth Circuits. Where, as here, plaintiffs claim that their ERISA plan wrongfully sought reimbursement of previously paid health benefits, the claim is for “benefits due” and federal jurisdiction under section 502(a) of ERISA is appropriate. Such a rule comports with our earlier jurisprudence because, although not directly analogous, such claims are more like challenges to the “administration of benefits” than challenges to the “quality of benefits received.” See Pryzbowski, 245 F.3d at 273.
Although the Insureds have attempted to characterize their claim as one looking only at state law, the essence of the claim concerns an ERISA plan. Therefore, we conclude that federal subject matter jurisdiction is appropriate.
IV. Express Preemption Under Section 514 of ERISA
Next, we turn to the District Court‘s denial of the Providers’ motion to dismiss. Our review of the District Court‘s decision is plenary. Pryzbowski, 245 F.3d at 268. We accept all factual allegations in the complaint as true and draw reasonable inferences from those allegations. Id.
New Jersey Statute,
Generally, a state law that “relates to” an ERISA-governed plan is preempted by ERISA.
The relevant exception here is Section 514(b)(2)(A), or the “savings clause.” The savings clause provides that, apart from particular scenarios not presented here,11 “nothing in [ERISA‘s preemption provisions] shall be construed to exempt or relieve any person from any law of any state which regulates insurance, banking or securities.”
The Supreme Court recently clarified the appropriate test for determining whether a state law that relates to employee benefit plans falls within the savings clause. In a 2003 decision, issued after the District Court had made its preemption ruling in this case, the Court directed that for a “state law to be deemed a law ... which regulates insurance” under
The Providers argue that the New Jersey statute applies to “any civil action” and funds from “any other source,” and thus, it is not specifically directed toward insurance. In Pilot Life Insurance Co. v. Dedeaux, 481 U.S. 41, 107 S.Ct. 1549, 95 L.Ed.2d 39 (1987), the Supreme Court addressed a similar case where a state law had its primary effect on insurers but was not limited to insurers. At issue in Pilot was Mississippi‘s law of bad faith. Even though the Mississippi Supreme Court had identified its law of bad faith with the insurance industry, the Supreme Court found that the law was based in general tort and contract law, not insurance law. Id. at 49-50, 107 S.Ct. 1549. The law could apply in any breach of contract case, not merely a breach of an insurance contract. Id. As a result, the law did not fall within the savings clause. Id.
Here, the District Court found, and the Insureds argue, that the New Jersey statute is distinguishable from Pilot because it was specifically intended to benefit the liability insurance industry. Terming the statute an “anti-subrogation law,” the Insureds contend that the statute is the result of a conscious tort reform effort by the legislature that shows a choice to shift the burden for tort recovery from liability insurers to health insurers. Although the legislative history and the Perreira decision do indicate an intent to lighten the burden on the liability insurance industry, we cannot say that the New Jersey statute is “specifically directed toward the insurance industry” for the purpose of the savings clause.
Before turning to the effect the statute has on New Jersey insurance law, an examination of the statute itself indicates that it is more than just an insurance regulation. New Jersey did not define
Additionally, examination of the driving intent behind the statute shows that this case parallels the analysis in Pilot. As in Pilot, a state supreme court described the law as one intended to affect the insurance industry. Perreira, 778 A.2d at 436. Despite this finding, the law here is a general law of civil procedure. The New Jersey statute governs all civil actions, not merely those involving insurance entities. Furthermore, even the Perreira Court recognized that the primary purpose of the law was to disallow double recovery by tort plaintiffs, not to regulate insurance contracts. Id.
The statute‘s general applicability is further exemplified by its plain language. The statute applies in “any civil action” to benefits received from “any other source.” As in Pilot, the New Jersey law regulates
The Insureds argue that because the statute is “aimed at” insurance entities, the requirements under the savings clause are satisfied, even if in some cases the statute regulates non-insurance entities. They direct us to several cases where the fact that a statute is “aimed at” the insurance industry or intended to affect that industry supports the conclusion that it is specifically directed toward the industry. See, e.g., FMC Corp. v. Holliday, 498 U.S. 52, 61, 111 S.Ct. 403, 112 L.Ed.2d 356 (1990) (“[I]t does not merely have an impact on the insurance industry; it is aimed at it.“). Examination of these cases, however, reveals a key difference from the case here: they explicitly regulated insurance. Miller, 538 U.S. at 331-32, 123 S.Ct. 1471 (“a health insurer shall not discriminate against ...“); Moran, 536 U.S. at 359, 122 S.Ct. 2151 (involving a section of Illinois‘s HMO Act where Congress specifically determined that HMOs were insurance entities); Holliday, 498 U.S. at 55, n. 2, 111 S.Ct. 403 (defining “coordination of benefits” as “a policy of insurance“); Medical Mutual of Ohio v. deSoto, 245 F.3d 561, 569 (6th Cir.2001) (examining California‘s antisubrogation statute that was limited to cases against a health care provider and contributions paid as the result of “health, sickness or income-disability insurance, accident insurance“). Although New Jersey‘s statute may have been “aimed at” shifting the burden of tort expenses from the liability insurance industry to the health insurance industry, the statute explicitly regulates both insurance and non-insurance entities. As in Pilot, we are faced with a state statute that, although commonly identified with the insurance industry, is not “specifically directed toward the insurance industry.”
To avoid ERISA preemption a state law must be “specifically directed” toward the insurance industry. The New Jersey statute is not. Because the New Jersey statute could be applied to any contributor in any civil action, it is merely a statute that has a significant impact on the insurance industry. As in Pilot, this is not sufficient. ERISA preempts the application of New Jersey‘s statute; therefore, the District Court erred in denying the Providers’ motion to dismiss.
V.
Because we conclude that ERISA preempts application of New Jersey‘s statute, we need not address the retroactivity of the New Jersey Supreme Court‘s decision in Perreira v. Rediger, 169 N.J. 399, 778 A.2d 429 (2001). We hold that the Insureds’ claims are for benefits due, and thus were properly removed to federal court. We also hold, however, that ERISA preempts application of New Jersey‘s statute, and thus the District Court erred in denying the Providers’ motion to
GARTH, Circuit Judge, dissenting.
This appeal, consisting of three consolidated actions, principally concerns two separate preemption issues: express preemption under § 514(a) of the Employee Retirement Income Security Act of 1974,
I.
Three provisions of ERISA § 514 speak directly to the question of express preemption,15 the mechanics of which have been neatly summarized by the Supreme Court:
If a state law “relate[s] to ... employee benefit plan[s],” it is pre-empted. § 514(a). The saving clause excepts from the pre-emption clause laws that “regulat[e] insurance.” § 514(b)(2)(A). The deemer clause makes clear that a state law that “purport[s] to regulate insurance” cannot deem an employee benefit plan to be an insurance company. § 514(b)(2)(B).
Pilot Life Ins. Co. v. Dedeaux, 481 U.S. 41, 45, 107 S.Ct. 1549, 95 L.Ed.2d 39 (1987).
II.
In Kentucky Ass‘n of Health Plans, Inc. v. Miller, 538 U.S. 329, 341-42, 123 S.Ct. 1471, 155 L.Ed.2d 468 (2003), the Supreme Court rejected the previous use of the McCarran-Ferguson factors, and instead enunciated two requirements for a state law to be deemed a “law ... which regulates insurance” under § 514(b)(2)(A). First, the state law must “be specifically directed toward entities engaged in insurance.” Id. at 342, 123 S.Ct. 1471 (citing Pilot Life, 481 U.S. at 50, 107 S.Ct. 1549; UNUM Life Ins. Co. of Am. v. Ward, 526 U.S. 358, 368, 119 S.Ct. 1380, 143 L.Ed.2d 462 (1999); Rush Prudential HMO, Inc. v. Moran, 536 U.S. 355, 366, 122 S.Ct. 2151, 153 L.Ed.2d 375 (2002)). Second, the state law must “substantially affect the risk pooling arrangement between the insurer and the insured.” Id.
Here, there is no serious dispute that state antisubrogation laws spread policyholder risk and therefore satisfy the second Miller requirement.17 See Singh, 335 F.3d at 286 (noting that “it is difficult to imagine an antisubrogation law as anything other than an insurance regulation, as it addresses who pays in a given set of circumstances and is therefore directed at spreading policyholder risk“); Med. Mut. of Ohio v. deSoto, 245 F.3d 561, 574 (6th Cir.2001) (“The logical effect of [antisubrogation laws] ... is to decrease the premiums of health care providers’ insurance and increase the premiums of health insurance—i.e., spread risks.“). What concerns us in this appeal, then, is whether the New Jersey collateral source statute satisfies the first Miller requirement, i.e., that it is specifically directed towards the insurance industry.
Focusing solely upon the statutory language, the majority concludes that the New Jersey collateral source statute is not specifically directed to the insurance industry because its definitions sweep too broadly and thereby encompass organizations or entities that do not provide insurance. To be sure, the collateral source statute does not specifically refer to health insurance or to subrogation and reimbursement clauses. It is contained in Title 2A of the New Jersey Statutes, which regulates the administration of civil and criminal justice. Moreover, the statute applies to plaintiffs “in any civil action” who receive benefits for their injuries from “any other source other than a joint tortfeasor.”
On the surface, therefore, this case would appear to present a paradigmatic example of a law of general application that has some bearing on insurers. Such laws do not qualify under the “saving” clause jurisprudence. See Miller, 538 U.S. at 334, 123 S.Ct. 1471. However, the inquiry does not end here, for the New Jersey Supreme Court has spoken in a rather definitive way as to the legislative
While recognizing that “[o]n its face,
III.
I am persuaded that the foregoing statutory interpretation, coming, as it does, from the State‘s highest tribunal, compels the conclusion that the New Jersey collateral source statute is “specifically directed” towards the insurance industry. In my view, the majority opinion accords too little weight to such statements from the New Jersey Supreme Court, focusing instead on the admittedly broad statutory language. Our difference, then, is mostly an hermeneutical one, centering on the interpretive import of Perreira in ascertaining the aim of the statute.
In assigning minimal value to Perreira, the majority opinion states that the mere fact that the New Jersey statute has an impact on insurance, as settled in Perreira, is not enough to satisfy the “specifically directed” requirement of the saving clause. Even if, the majority argues, the New Jersey Supreme Court has identified
Under the relevant state law in Pilot Life, punitive damages could be sought for “bad faith” in denying claims without any reasonably arguable basis for the refusal to pay. 481 U.S. at 50, 107 S.Ct. 1549. The Supreme Court determined that although Mississippi had “identified its law of bad faith with the insurance industry, the roots of this law are firmly planted in the general principles of Mississippi tort and contract law.” Id. “Any breach of contract,” the Court observed, “and not merely breach of an insurance contract, may lead to liability for punitive damages under [the Mississippi common law of bad faith].” Id. Accordingly, the Court con-
The holding in Pilot Life was premised upon the finding that “the roots of [the common law of bad faith were] firmly planted in the general principles of ... tort and contract law.” Id. at 50. Pilot Life, contrary to the majority‘s reading, did not involve a situation where “a state supreme court described the law as one intended to affect the insurance industry.” Majority Op. at 165. The Mississippi Supreme Court never stated that its common law of bad faith was specifically directed towards the insurance industry; it merely applied that longstanding law to the insurance context. Pilot Life, 481 U.S. at 49-50, 107 S.Ct. 1549. Under these circumstances, the Supreme Court quite properly held that “a common-sense understanding of the phrase ‘regulates insurance’ does not support the argument that the Mississippi law of bad faith falls under the saving clause.” Id. at 50, 107 S.Ct. 1549.
Common sense dictates otherwise here. This case involves a statutory enactment, which, according to the New Jersey Supreme Court, was clearly rooted in legislative concerns about spiraling insurance costs. The New Jersey Supreme Court was emphatic in emphasizing insurance in its opinion:
The effectuation of no-double-recovery [by
N.J.S.A. 2A:15-97 ] therefore required a separate legislative decision regarding which segment of the insurance industry would be the beneficiary of that disallowance. The Legislature had two choices: to benefit health insurers by allowing repayment of costs expended on a tort plaintiff, or to benefit liability carriers by reducing the tort judgment by the amount of health care benefits received. As the legislative history reveals, the choice was made to favor liability carriers. See Kiss v. Jacob, 138 N.J. 278, 282 [650 A.2d 336] (1994) (stating that intent of the legislature was to control spiraling automobile-insurance costs); Fayer v. Keene Corp., 311 N.J.Super. 200, 208, 709 A.2d 808 (App. Div.1998) (agreeing that purpose of statute is to shift burden to health industry); Parker v. Esposito, 291 N.J.Super. 560, 565, 677 A.2d 1159 (1996) (stating that purpose of collateral source statute is to prevent double recovery thereby giving relief from increasing costs of liability insurance); Lusby v. Hitchner, 273 N.J.Super. 578, 591, 642 A.2d 1055 (App. Div.1994) (stating that legislative determination “was apparently not only to prevent plaintiffs from obtaining a double recovery but also, except where PIP payments are involved, to shift the burden, at least to some extent, from the liability and casualty insurance industry to health and disability third-party payers“).
Perreira, 169 N.J. at 410-11, 778 A.2d 429.
While the Supreme Court has held that “laws of general application that have some bearing on insurers do not qualify,” Miller, 538 U.S. at 334, 123 S.Ct. 1471, the New Jersey collateral source statute presents the inverse proposition—it is a law specifically directed towards the insurance industry that has some bearing on non-insurers. As such, it “homes [sic] in on the insurance industry and does ‘not just have an impact on [that] industry.‘” Ward, 526 U.S. at 368, 119 S.Ct. 1380 (quoting Pilot Life, 481 U.S. at 50, 107 S.Ct. 1549). Because the New Jersey statute had its genesis in specific legislative action, as opposed to general principles of tort or contract law, the majority opinion‘s reliance on Pilot Life is entirely misplaced.
For these reasons, I believe that this case more closely resembles FMC Corp. v. Holliday, 498 U.S. 52, 111 S.Ct. 403, 112 L.Ed.2d 356 (1990), where the Supreme Court dealt precisely with the question of whether a state antisubrogation law19 was saved from preemption under § 514(b)(2)(A). There, the Court held that:
There is no dispute that the Pennsylvania [antisubrogation] law falls within ERISA‘s insurance saving clause ... [The antisubrogation law] directly controls the terms of insurance contracts by invalidating any subrogation provisions that they contain. It does not merely have an impact on the insurance industry; it is aimed at it. This returns the matter of subrogation to state law. Unless the statute is excluded from the reach of the saving clause by virtue of the deemer clause, therefore, it is not pre-empted.
498 U.S. at 60-61, 111 S.Ct. 403 (citations omitted).
Likewise, the Sixth and Fourth Circuits reached the same conclusion in considering whether similar state antisubrogation laws regulated insurance. See Singh, 335 F.3d at 286 (holding that subrogation prohibition of the Maryland HMO Act is a state-law regulation of insurance); deSoto, 245 F.3d at 573 (holding that California‘s antisubrogation statute regulated insurance); see also Hampton Indus., Inc. v. Sparrow, 981 F.2d 726, 729-30 (4th Cir.1992) (noting that “limits on subrogation recoveries appear to be aimed at the insurance industry, and therefore would also appear to come within the scope of the saving clause“).
Contrary to the majority, I conclude that our understanding of the New Jersey collateral source statute must be informed by the New Jersey Supreme Court‘s interpretation. In the interpretive light cast by the Supreme Court in Perreira, the New Jersey collateral source statute is, in all essential respects, similar to those statutes already held to regulate insurance by the United States Supreme Court (FMC Corp.) and our two sister courts of appeals (Singh and de Soto).
Accordingly, I conclude that the New Jersey collateral source statute is saved from ERISA preemption.20
Because I would affirm the District Court‘s holding that § 514 of ERISA does not preempt
Notes
11:4-42.10 Provisions for subrogation and repayment of benefits
(a) Group policies and certificates providing health insurance may contain subrogation provisions that require the return to the insurer by a covered person of benefits paid for illness or injury up to the amount a covered person received from a third party through settlement, a satisfied judgement or other means, as compensation for the medical costs of such illness or injury, subject to the following:
1. Repayment of benefits shall be required only where the amount received for the third party through settlement, judgment or other means are specifically identified as amounts paid for health benefits which have been paid by the insurer under the group policy or certificate.
2. The repayment shall not exceed the amount of benefits paid by the insurer under the group policy or certificate for the particular illness or injury.
3. The group policy and certificate shall allow the covered person to deduct from the repayment to the insurer the reasonable pro-rata expenses incurred in effecting the third party payment.
(b) Group policies and certificates providing health insurance may exclude or reduce the health benefits payable to or on behalf of a covered person to the extent that the covered person has already received payment from a third party for past or future health care costs for an illness or injury resulting from the negligence or intentional act of such third party.
(c) Except as set forth in (b) above, no policy or certificate providing group health insurance shall limit or exclude health benefits as the result of the covered person‘s sustaining a loss attributable to the actions of a third party.
(d) Notwithstanding (a) or (b) above, disability income, long term care and accidental loss benefits and blanket insurance shall not be subject to subrogation or repayment of benefits received.
(e) Subrogation shall only be applicable when third party liability benefits may exist, subject to the restrictions set forth above.
In any civil action brought for personal injury or death, except actions brought pursuant to the provisions of P.L.1972, c.70 (C.39:6A-1 et seq.), if a plaintiff receives or is entitled to receive benefits for the injuries allegedly incurred from any other source other than a joint tortfeasor, the benefits, other than workers’ compensation benefits or the proceeds from a life insurance policy, shall be disclosed to the court and the amount thereof which duplicates any benefit contained in the award shall be deducted from any award recovered by the plaintiff, less any premium paid to an insurer directly by the plaintiff, or any member of the plaintiff‘s family on behalf of the plaintiff for the policy period during which the benefits are payable. Any party to the action shall be permitted to introduce evidence regarding any of the matters described in this act.
In any civil action brought for personal injury or death, except actions brought pursuant to the provisions of P.L.1972, c. 70 (C. 39:6A-1 et seq.), if a plaintiff receives or is entitled to receive benefits for the injuries allegedly incurred from any other source other than a joint tortfeasor, the benefits, other than workers’ compensation benefits or the proceeds from a life insurance policy, shall be disclosed to the court and the amount thereof which duplicates any benefit contained in the award shall be deducted from any award recovered by the plaintiff, less any premium paid to an insurer directly by the plaintiff or by any member of the plaintiff‘s family on behalf of the plaintiff for the policy period during which the benefits are payable. Any party to the action shall be permitted to introduce evidence regarding any of the matters described in this act.
“Except as provided in subsection (b) of this section [the saving clause], the provisions of this subchapter and subchapter III of this chapter shall supersede any and all State laws insofar as they may now or hereafter relate to any employee benefit plan ....”
“Except as provided in subparagraph (B) [the deemer clause], nothing in this subchapter shall be construed to exempt or relieve any person from any law of any State which regulates insurance, banking, or securities.”
“Neither an employee benefit plan ... nor any trust established under such a plan, shall be deemed to be an insurance company or other insurer, bank, trust company, or investment company or to be engaged in the business of insurance or banking for purposes of any law of any State purporting to regulate insurance companies, insurance contracts, banks, trust companies, or investment companies.”
This bill attempts to reduce the cost of liability insurance by reducing the likelihood of a ‘double recovery’ in a liability award for items which were already compensated by insurance or by other ‘collateral’ sources other than a tortfeasor.
Id. at 410, 778 A.2d 429 (quoting Passed Bill Memo to Governor Thomas H. Kean (Dec. 7, 1987)).
This is a difficult issue, and more than that, the resolution of it could be outcome determinative in this appeal. As a result, I believe that the proper course for this Court to take would be to certify the issue of retroactivity to the New Jersey Supreme Court. Under New Jersey Court Rule 2:12A-1., the New Jersey Supreme Court may answer such a question if “there is no controlling appellate decision, constitutional provision or statute in this State.” N.J. Ct. R. 2:12A-1. The use of certification “rests in the sound discretion of the federal courts.” Lehman Bros. v. Schein, 416 U.S. 386, 391, 94 S.Ct. 1741, 40 L.Ed.2d 215 (1974). Such discretion, in my judgment, would be warranted here.