Personal Injury Victims as Insurance Collection Agents: ERISA Preemption of State Antisubrogation Laws

The Employee Retirement Income Security Act (ERISA) was enacted in 1974 to protect the pension rights of employees nationwide. However, due to its broad preemptive powers, ERISA has since developed into a tool used by health insurers to recover millions of dollars in tort damages meant to benefit employees with ERISA health plans. This practice, known as subrogation, has been met with legislative backlash in the form of state antisubrogation statutes, which attempt to limit the enforceability of subrogation clauses found in almost all ERISA health plans. However, many courts have held that ERISA preempts these antisubrogation statutes, thereby affirming insurers’ ability to recover funds intended to compensate injured victims. These decisions often have disastrous and life changing consequences for injured employees. After examining ERISA’s preemptive clauses and the Supreme Court cases delineating their limits, this Note argues that state antisubrogation statutes should be upheld against preemption challenges. This result is necessary to preserve ERISA’s original purpose: protection of employees nationwide