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Right of Reimbursement
In addition to its subrogation rights, the Long-Term Disability Plan is entitled to reimbursements from a covered person who receives compensation from any third parties (other than family members) for Long-Term Disability expenses that have been paid by the Long-Term Disability Plan. The following rules apply to the plan's right of reimbursement:
  • You must reimburse the plan in first priority from any recovery from a third party for the full amount of the benefits the plan paid on your behalf, regardless of whether you are fully compensated by the third party for your losses.
  • Regardless of any allocation or designation of your recovery made in a settlement agreement or court order, the plan shall have a right of full reimbursement, in first priority, from the recovery.
  • You must hold in trust for the benefit of the plan the gross proceeds of a recovery, to be paid to the plan immediately upon your receipt of the recovery. You must reimburse the plan, in first priority and without any set-off or reduction for attorney fees or other expenses. The "common fund" doctrine does not apply to any funds recovered by any attorney you retain regardless of whether the funds recovered are used to repay benefits paid by the plan.
  • If you fail to reimburse the plan, the plan may deduct any unsatisfied portion of the amount of benefits the plan has paid or the amount of your recovery from a third party, whichever is less, from future benefits payable under the plan.
  • If you fail to disclose the amount of your recovery from a third party to the plan, the plan shall be entitled to deduct the full amount of the benefits the plan paid on your behalf from any future benefits payable under the plan.