Wal-Mart persues Shank's (local family) trust fund

Southeast Missourian | January 29, 2006 | Rudy Keller

[Conservababe]

Wal-Mart pursues Shank's trust fund Sunday, January 29, 2006 RUDI KELLER ~ Southeast Missourian

A case before the U.S. Supreme Court could determine whether Wal-Mart can take the trust fund Debbie Shank uses to pay for long-term care for severe injuries from a traffic accident. Shank, who suffered brain damage and other injuries when a tractor-trailer slammed into her minivan in 2000, is being sued by Wal-Mart for every dollar remaining in the trust fund. The federal lawsuit contends that because Wal-Mart's employee health insurance plan paid for her hospital care following the wreck, it is entitled to the money she was awarded in a settlement with the trucking company.

She understands little of what is happening in the lawsuit, husband Jim Shank said Saturday. She has almost no short-term memory and requires constant care, he said.

"She's read about it in the paper but it hasn't sunk in," Shank said.

Last week, Wal-Mart decided to pursue the money, about $417,000, in Debbie Shank's trust fund. Wal-Mart is asking for $459,000.

When Wal-Mart filed the lawsuit in August, the company said it hadn't decided whether to pursue the case. The lawsuit helped the company examine its options while preserving its legal rights, a spokesman said at the time.

Jim Shank doesn't believe Wal-Mart ever intended to do anything but try to get the money. "That was just corporate babble," he said. "It is a line they've got to use. Blah, blah, blah, we are protecting our interests. Well, I'm protecting my interests, too."

Jim Shank visits his wife two or three times a day. If they lose the trust fund, he said, she will lose the personal-care assistant "who is like a part of the family." She will also be forced to share a room and he might have to divorce her so she would be eligible for increased Medicaid and Medicare benefits to support her care, he said.

The basis of Wal-Mart's claim is that by agreeing to participate in the employee health plan, Debbie Shank agreed to reimburse the plan if it paid for medical expenses that were later compensated by a lawsuit award or settlement.

Wal-Mart can't give up its rights in this case, even if it disrupts Debbie Shank's care, spokesman Marty Heires said Friday.

"This is a very, very sad case, and many people will have an emotional and sympathetic reaction," Heires said in a prepared statement. "But the reality is that part of Mrs. Shank's legal settlement included reimbursement for medical costs which had already been paid by her Wal-Mart health plan."

The plan's trustees had no choice, Heires said in an interview. "Our hands are really tied."

Cases like the Shanks' turn on an arcane principle of law that has a huge impact on individuals. In a 2002 case, the high court ruled that a health insurance company was not entitled to seize a trust fund set up for an accident victim in a settlement.

The Supreme Court agreed in November to hear another similar case from Maryland. A couple was injured in an automobile accident and put the proceeds from their settlement into an investment account. Lower courts ruled their insuror could recover the money paid for their care.

The Bush administration, working through the U.S. Department of Labor, supported the insurance company's assertion that it was entitled to reimbursement.

Attorney Maurice Graham of St. Louis, who represents the Shanks, believes the high court will rule against the insurance company. Such a ruling, he said, would immensely help the Shanks.

"There has been a substantial amount of litigation around the country as the enforcability of these types of agreements," Graham said. "It is our position that because of the nature of this settlement, we don't think the money is payable to Wal-Mart's health plan."

If the case goes to trial, Graham said, it will likely be early 2007 before a decision is reached. "We are now gearing up to aggressively defend it."

[SC Swamp Fox]

Good example.

Take it one step further to illustrate the double payment, assume that the trucking company and Walmart had the same insurance company. The insurance company paid twice. Once through Walmart's employee health plan and again through the trucking company's liability plan.

Since there wasn't a single insurance company involved, Walmart's employee health plan is due reimbursement from the trucking company's liability carrier, or in this case, from the settlement.

BTW, what is missing from the story is how much the lawyers took from the settlement. In a just system, the Walmart health plan would have been in-line for payment before the lawyers.

[Conservababe]

Now I am interested in understanding how a fully self funded company differs from one who is not.