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February 2009: February 2009: Benefits Review Board Issues Landmark Decision Protecting Union Welfare Plans
On February 12, 2009 the Benefits Review Board (“BRB”) issued its Decision and Order, in M.K. v. California United Terminals, et al, Case Nos. 08-392,08-450& 08-606 regarding three Longshore and Harbor Workers’ Compensation Act claims in which the ILWU-PMA Welfare Plan (“Welfare Plan”) had asserted its lien rights. The issue before the BRB was whether employer/insurance carriers could properly settle claims (with claimants) without simultaneously addressing the Welfare Plan’s lien claims for weekly indemnity and medical benefits paid by it on behalf of claimants. This issue had never been addressed by the BRB or any of the circuit courts. In all three cases the Administrative Law Judges ruled, over the Welfare Plan’s objections, that such settlements were appropriate. However, the BRB properly granted the Welfare Plan’s appeal in all three cases, vacated the significant monetary settlements in such matters and held that the Welfare Plan is a party-in-interest and its interests must be addressed in any such settlements submitted for approval. The Decision ends a long-standing practice of “settling around” the Welfare Plan’s liens for weekly indemnity benefits and claims for reimbursement of medical benefits.