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Rood v. New York State Teamsters Conf. Pension & Ret. Fund

United States District Court, N.D. New York

August 20, 2014

PAUL J. ROOD, Plaintiff,

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Lawrence E. Kahn, U.S. District Judge.


Plaintiff Paul J. Rood (" Plaintiff" ) commenced this action on April 19, 2013, alleging a claim for disability pension benefits under the Employee Retirement Income Security Act (" ERISA" ), 29 U.S.C. § § 1001-1461. Dkt. No. 1 (" Complaint" ). Plaintiff's Complaint names the New York State Teamsters Conference Pension and Retirement Fund (the " Fund" ) and its Board of Trustees (" the Board" ) (collectively, " Defendants" ) as Defendants. Id. Presently before the Court are the parties' Motions for summary judgment. Dkt. Nos. 15 (" Defendants Motion" ); 16 (" Plaintiff Motion" ). For the following reasons, Defendants' Motion is denied and Plaintiff's Motion is granted.


A. The Fund

The Fund is a multi-employer plan that provides pension and disability benefits to

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employees covered by collective bargaining agreements between contributing employers and various local unions of the International Brotherhood of Teamsters. Dkt. Nos. 15-5 (" Defendants SMF" ) ¶ 1; 18-1 (" Response to Defendants SMF" ) ¶ 1. The Fund pays pension and disability benefits to eligible participants and beneficiaries pursuant to a written pension plan. Defs. SMF ¶ 3; Resp. to Defs. SMF ¶ 3; Dkt. No. 15-8 Ex. 2 (the " Plan" ).

B. Disability Benefits Under the Plan

Under the Plan, a participant who becomes " disabled" is eligible for a disability benefit (" Fund Disability Benefit" or " FDB" ) if he has earned ten years of Future Service Credit. Plan § 7.03(a); Defs. SMF ¶ 7; Resp. to Defs. SMF ¶ 7. A participant is considered " disabled" if he satisfies the requirements for a Social Security disability award. Plan § 2.15; Defs. SMF ¶ 8; Resp. to Defs. SMF ¶ 8. The participant's disability benefit ends when the participant reaches normal retirement age under the Plan. Plan § 7.03(b); Defs. SMF ¶ 9; Resp. to Defs. SMF ¶ 9.

The monthly Fund Disability Benefit amount is equal to the normal pension benefit the participant would be entitled to if he had attained the age requirement for a normal pension. Plan § 7.03(c); Defs. SMF ¶ 11; Resp. to Defs. SMF ¶ 11. However, the Plan further provides that, if a participant is also receiving workers' compensation (" WC" ) benefits due to an occupational disability, the monthly amount of the Fund Disability Benefit will be reduced by the amount of monthly WC benefits received. Plan § 7.03(i); Defs. SMF ¶ ¶ 12-13; Resp. to Defs. SMF ¶ ¶ 12-13. But if part of the participant's WC benefit is " used to offset other payment sources (i.e., Social Security disability awards, long-term disability, etc.)" to which the participant may be entitled, that portion of the WC benefit is not included in the reduction of the participant's monthly Fund Disability Benefit. Plan § 7.03(i); Defs. SMF ¶ ¶ 14-16; Resp. to Defs. SMF ¶ ¶ 14-16.

C. Workers' Compensation Medicare Set-Aside Arrangements

Medicare is a federally funded program that covers health care costs for certain individuals, including those who have received Social Security disability benefits for at least twenty-four months. See 42 U.S.C. § 1395c. Medicare Parts A and B provide hospital and medical care benefits to individuals by making payments on their behalf directly to health care providers, or, in some cases, to individual beneficiaries. See generally 42 U.S.C. § § 1395c, 1395d, 1395g, 1395j-1395k.

In 1980, Congress passed the Medicare Secondary Payer Act (" MSPA" ), 42 U.S.C. § 1395y. " In certain circumstances, the MSPA makes Medicare the 'secondary payer' in relation to certain other sources, which are considered 'primary payers.'" Meek-Horton v. Trover Solutions, Inc., 910 F.Supp.2d 690, 915 F.Supp.2d 486, 488 (S.D.N.Y. 2013) (citing 42 U.S.C. § 1395y(b)(2)(A)). For instance, under the MSPA, Medicare is prohibited from making a payment for a

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Medicare enrollee's medical benefits if " payment has been made or can reasonably be expected to be made under a workmen's compensation law or plan of the United States or a State . . . ." 42 U.S.C. § 1395y(b)(2)(A); see also 42 C.F.R. § 411.46 (" If a lump-sum [WC] award stipulates that the amount paid is intended to compensate the individual for all future medical expenses required because of the work-related injury or disease, Medicare payments for such services are excluded until medical expenses related to the injury or disease equal the amount of the lump-sum payment." ). Consequently, when Medicare makes a payment for medical expenses that are covered by a WC award, the Medicare payment is merely conditional, and Medicare is entitled to reimbursement. 42 U.S.C. § 1395y(b)(2)(B). If reimbursement is not made, the MSPA authorizes the federal government to bring an action for damages against the primary payer, or against entities that receive primary payments, including the individual Medicare beneficiary. 42 U.S.C. § 1395y(b)(2)(B)(ii)-(iii); 42 C.F.R. § 411.24(e), (g).

Accordingly, when settling a WC claim, the parties may designate and identify the portion of the settlement amount that is intended to pay for future work-injury-related medical expenses that are covered and otherwise reimbursable by Medicare. Centers for Medicare & Medicaid Services, Workers' Compensation Medicare Set-Aside Arrangement (WCMSA) Reference Guide § 3.0 (Feb. 3, 2014). This designated amount is known as a Workers' Compensation Medicare Set-Aside (" WCMSA" or " MSA" ). Id. " The goal of establishing a WCMSA is to estimate, as accurately as possible, the total cost that will be incurred for all medical expenses otherwise reimbursable by Medicare for work-related ...

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