(a) A plan shall list the address or addresses to which all notices required by this section must be sent in the plan document, in the SPD, and in all materials the plan provides to the primary insured regarding benefits under the plan, including information published on the internet or on a sponsor‘s intranet or electronic portal. The address must be an address that accepts certified mail.
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Terms Used In Tennessee Code 8-27-906

  • Administrator: means :
    (A) An individual, either employed by, or contracted with, the sponsor or the plan to provide administrative services on behalf of the plan. See Tennessee Code 8-27-901
  • Affidavit: A written statement of facts confirmed by the oath of the party making it, before a notary or officer having authority to administer oaths.
  • Appeal: A request made after a trial, asking another court (usually the court of appeals) to decide whether the trial was conducted properly. To make such a request is "to appeal" or "to take an appeal." One who appeals is called the appellant.
  • Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
  • Days: means calendar days, unless otherwise noted. See Tennessee Code 8-27-901
  • Defendant: In a civil suit, the person complained against; in a criminal case, the person accused of the crime.
  • Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
  • Insured: means any individual, other than the primary insured, who receives benefits under the plan. See Tennessee Code 8-27-901
  • Litigation: A case, controversy, or lawsuit. Participants (plaintiffs and defendants) in lawsuits are called litigants.
  • Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
  • Person: includes a corporation, firm, company or association. See Tennessee Code 1-3-105
  • Plain language: means writing designed to ensure the reader understands the meaning of the passage as quickly, easily, and completely as possible, avoiding verbose, convoluted language, and jargon. See Tennessee Code 8-27-901
  • Plaintiff: The person who files the complaint in a civil lawsuit.
  • plan: includes those to which the primary insured pays to the plan a nominal fee for the primary insured and any insureds whose relationship to the primary insured allows them to receive benefits under the plan. See Tennessee Code 8-27-901
  • Plan document: means a document by which a plan is established and operated. See Tennessee Code 8-27-901
  • Plan participant: means either a primary insured or insured. See Tennessee Code 8-27-901
  • Primary insured: means the individual employed by, or contracted with, the sponsor and to whom, based on the individual's status as an employee or contractor, the plan provides benefits. See Tennessee Code 8-27-901
  • Record: means information that is inscribed on a tangible medium or that is stored in an electronic or other medium and is retrievable in a perceivable form. See Tennessee Code 1-3-105
  • Recourse: An arrangement in which a bank retains, in form or in substance, any credit risk directly or indirectly associated with an asset it has sold (in accordance with generally accepted accounting principles) that exceeds a pro rata share of the bank's claim on the asset. If a bank has no claim on an asset it has sold, then the retention of any credit risk is recourse. Source: FDIC
  • Reimbursement interest: means the plan's right of recovery of benefit amounts paid by the plan on behalf of the plan participant from the participant's recovery from a third-party tortfeasor arising from the injury or illness of the plan participant caused by such tortfeasor. See Tennessee Code 8-27-901
  • Representative: when applied to those who represent a decedent, includes executors and administrators, unless the context implies heirs and distributees. See Tennessee Code 1-3-105
  • RSRI: means a form drafted by the plan in plain language and included in the SPD that the plan participant, their attorney, or other party in interest, may use to request that the plan provides notice of its subrogation or reimbursement interest. See Tennessee Code 8-27-901
  • Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
  • Settlement: means an agreement reached between a plan participant and the plan, or between the plan participant and a third-party tortfeasor or the third-party insurer, or both. See Tennessee Code 8-27-901
  • SMM: means a summary of any material amendment to the plan adopted by the sponsor, including, but not limited to, changes in deductibles, co-pays, and eligibility requirements. See Tennessee Code 8-27-901
  • SPD: means a summary of the plan document, which may or may not be part of the plan document. See Tennessee Code 8-27-901
  • Sponsor: means a county, municipality, municipal corporation, or special school district in this state that establishes and funds a plan. See Tennessee Code 8-27-901
  • State: means the state of Tennessee. See Tennessee Code 8-34-101
  • Subrogation interest: means the right to recovery that the plan has in any litigation or settlement arising from the injury or illness of a plan participant caused by a third-party tortfeasor. See Tennessee Code 8-27-901
  • Trial: A hearing that takes place when the defendant pleads "not guilty" and witnesses are required to come to court to give evidence.
  • Verdict: The decision of a petit jury or a judge.
  • written: includes printing, typewriting, engraving, lithography, and any other mode of representing words and letters. See Tennessee Code 1-3-105
(b) At each enrollment renewal period, the plan shall mail to each primary insured, at the primary insured’s last address of record provided to the plan, an SPD that provides an RSRI form and details about the current plan benefits. To the extent that the sponsor maintains an intranet or other electronic portal for the benefit of its employees, such information must be readily available on this platform at all times and to all primary insureds and employees who may be eligible to participate in the plan. If the sponsor maintains a platform that satisfies the foregoing, the platform may be used in lieu of the plan mailing each primary insured an SPD; provided, that for each new enrollment period all primary insureds and employees who may be eligible to participate in the plan are required to electronically acknowledge receipt of, and access to, the SPD via the platform.
(c) SMMs must be drafted in plain language and be provided to each primary insured under the plan within sixty (60) days after the date of adoption of any material reduction in benefits or material increase in cost to plan participants. An SMM may be provided either by certified mail or via the sponsor’s intranet or electronic portal; provided, that the primary insured is required to electronically acknowledge receipt of such SMM via the platform. At a new enrollment period the plan may use an SMM to disclose only the changes to the plan rather than drafting a new SPD; provided, that the plan also provides a copy of the original SPD to which the changes apply, and provided that primary insureds and employees who may be eligible to participate in the plan are required to electronically acknowledge receipt of, and access to, the SMM via the platform.
(d) Before the entry of the judgment or settlement in a personal injury case, the plan participant or the plan participant’s attorney, or other individual or the individual’s attorney, who has an interest in recovery under this part, shall notify the plan by completing the plan’s RSRI form or in writing, either of which must be sent by certified mail, with return receipt signature or electronic verification, at the address provided in the SPD or plan document, requesting that the plan determine the amount, if any, of the plan’s subrogation or reimbursement interest. Written notice must, at a minimum, provide the plan participant’s full name; date of birth; social security number, if known; and the date the plan participant’s claim arose. If the plan participant’s attorney or representative is on notice that the plan has an interest in the judgment or settlement and fails to provide notice to the plan as required by this section, upon motion by the plan, the plan participant’s attorney’s interest in any recovery must be reduced by up to fifty percent (50%) with the forfeited amount paid to the plan. If the plan participant is unrepresented and fails to provide notice as required by this section, upon motion by the plan the court shall award to the plan from the plan participant’s recovery an amount that, in the court’s discretion, reimburses the plan for amounts the plan lost due to the plan participant’s failure or refusal to provide the plan with the notice required under this section. Such amount may be up to the full amount of the plan’s subrogation or reimbursement interest to the extent that such interest may be satisfied from the recovery proceeds, without reduction and irrespective of the plan participant’s claims.
(e) Within ninety (90) days of receipt of the notice required by subsection (d), a plan having a subrogation or reimbursement interest shall respond to the individual who provided the notice in writing sent by certified mail, with either return receipt signature or electronic verification, providing the amount of the subrogation or reimbursement interest, or both, a request for additional information or documentation, or notice that additional time is necessary to determine the amount of the plan’s subrogation or reimbursement interest, or both. If additional time is necessary, a plan shall provide a response containing the amount of the subrogation or reimbursement interest, or both, within one hundred eighty (180) days of receipt of the notice required by subsection (d), unless treatment of the plan participant, or billing of the plan by medical services providers, is ongoing. If a plan or plan administrator notifies the plan participant or the plan participant’s attorney that the plan is unable to provide the amount of its subrogation or reimbursement interest, or both, because treatment or billing is ongoing, the notification is a valid response, and the plan’s subrogation or reimbursement interest, or both, is not extinguished. The plan participant or the plan participant’s attorney bear the burden of additional requests to the plan to ascertain the amount of the plan’s subrogation or reimbursement interest, or both. The plan participant or the plan participant’s attorney shall then inform the court regarding the results of the notice, if any, to the plan. If the plan fails to respond within the period specified in this subsection (e), then the plan’s subrogation or reimbursement interest, or both, is extinguished and disbursements may be made without recourse upon the plan participant or the plan participant’s attorney, or other individual who may have an interest in such disbursements.
(f)

(1) This section does not preclude the plan from declining to provide its subrogation or reimbursement interest, or both, until the plan receives one (1) or more of the following:

(A) The plan participant’s affidavit attesting that treatment beyond routine follow-up for injuries sustained in the incident at issue has ceased beyond routine follow-up;
(B) The plan participant’s attorney’s affidavit attesting to the amount of available recovery, including the sources of all such recovery, the amount of interest the attorney is claiming in any recovery, and whether to the best of the attorney’s knowledge and belief, the plan participant’s medical care for injuries sustained in the incident at issue has ceased beyond routine follow-up; and
(C) The plan participant’s treating physician’s statement indicating the plan participant’s date of maximum medical improvement, return to work date, permanent impairment or disability, and anticipated additional treatment beyond routine follow-up.
(2) A plan’s request for the information listed in subdivision (f)(1) does not extinguish the plan’s subrogation or reimbursement interest and is not considered for purposes of calculating the plan’s one hundred eighty (180) day response period.
(g) If the plan participant or the plan participant’s attorney received a timely response from the plan, but the amount of the subrogation or reimbursement interest, or both, remains in dispute, upon motion by the plan, the trial judge shall hold a hearing in accordance with subsection (h). After trial and at the time of the entry of the judgment or settlement in a case in which the plan has a subrogation or reimbursement interest, or both, under this section, it is the responsibility of the trial judge to calculate the amount of the subrogation or reimbursement interest, or both, and incorporate the court’s findings concerning such interest in the final judgment or settlement.
(h) The trial judge shall base the gross amount of the subrogation or reimbursement interest upon the findings of the verdict at trial concerning medical expenses and evidence introduced after the trial about the total sum of moneys paid by the plan for medical expenses for injuries arising from the incident that is the basis of the action. The trial judge shall reduce the gross amount of the subrogation or reimbursement interest by one (1) or more of the following factors, as applicable:

(1) To the extent that the plan participant plaintiff is partially at fault in the incident giving rise to the litigation, the subrogation or reimbursement interest is reduced by the percentage of fault assessed against the plan participant plaintiff;
(2) To the extent that the finder of fact allocated fault to a person who was immune from suit, the subrogation or reimbursement interest is reduced by the percentage of fault assessed against the immune person;
(3) To the extent that the finder of fact allocates fault to a governmental entity that has its liability limited under state law, and the fault of the entity, when multiplied by the total dollar value of the damages found by the finder of fact, exceeds the amount of judgment that can be awarded against the entity, the subrogation or reimbursement interest is reduced proportionately by a percentage derived by dividing the uncollectable portion of the judgment against the plan by the total damages awarded; or
(4) To the extent that the finder of fact allocated fault to a person that the plan participant plaintiff did not sue, the plan’s subrogation or reimbursement interest is reduced by the percentage of fault assessed against the nonparty.
(i) After the calculations described in subsection (h) are performed, the trial judge shall reduce the subrogation or reimbursement interest pro rata by the amount of reasonable attorneys’ fees and litigation costs incurred by the plan participant plaintiff in obtaining the recovery.
(j) The amount determined from the calculations required under subsections (h) and (g) is the net subrogation or reimbursement interest. If a plan participant plaintiff or the plan participant’s attorney collects the judgment, each has the obligation to promptly remit the net subrogation or reimbursement interest and attorneys’ fees and costs to the counsel or other individual specified in the plan document or SPD, as required by the final judgment. If the plan participant plaintiff and the plan participant’s attorney collect only a portion of the final judgment, each has the obligation to promptly remit a pro rata share of the net subrogation interest and attorneys’ fees and costs to the counsel or other individual specified in the plan document or SPD, as required by the final judgment. If the plan participant plaintiff and the plan participant’s attorney later collect additional moneys against the judgment, there is a continuing obligation on both to remit a pro rata share of the moneys collected as required by the final judgment.
(k) If a plan participant plaintiff or the plan participant’s attorney, or both, fail to timely remit to the counsel or other individual specified in the plan document or SPD the plan’s pro rata portion of judgment moneys received, upon motion by the plan, the court may, in its discretion, award to the plan attorney’s fees for the cost of the motion, interest on moneys withheld, as well as the amounts withheld, and order those who failed to timely release funds to forfeit to the plan all sums received in payment of the judgment. If the court finds that a motion under this subsection (k) was filed in bad faith, the court may award to the plan participant plaintiff or the plan participant’s attorney, or both, attorney’s fees for the cost of the motion, and order the plan to forfeit its net subrogation or reimbursement interest.
(l) If the case between the plan participant plaintiff and the defendant is settled before trial and the parties and the plan are unable to reach an agreement on the amount of the subrogation or reimbursement interest, then the trial judge shall hold a hearing to determine the gross and net subrogation or reimbursement interests, taking into account the criteria listed in subsection (h) and the likelihood of collecting any judgment against parties determined to be at fault. Expert foundation is not required to prove any claimed damages. An aggrieved party may appeal the court’s decision.
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