He banked a six-figure settlement but skipped a smaller bill the plan was owed
A federal court ordered a union member to repay benefits after he collected a workers' comp settlement and never reimbursed the plan.
On August 6, 2026, a federal court in Washington granted default judgment to the Teamsters Local 639 - Employers Health Trust Fund, ordering a plan participant to repay benefits he owed under the plan's reimbursement rules.
The story reads like a benefits-administration case study. In May 2020, a union member hurt his neck and lower back in a car accident tied to his job at United Parcel Service. The fund covered $11,350.54 in medical care and paid another $12,005.42 in accident and sickness benefits.
The plan's rules came with a string attached. If a member later recovered money for the same injury, whether through a settlement, judgment, workers' comp or another program, the plan had to be repaid from that recovery. In September 2021, the member and his attorney signed a reimbursement and subrogation agreement locking in that promise. It gave the fund an equitable lien on any recovery and priority over other obligations.
Then the recovery arrived. The member settled with his employer and the workers' comp administrator for a lump sum of $336,713.87, plus a medical set-aside of $38,578.37. The fund sent repayment demands in 2024 and 2025. He did not respond to the demands, and one letter came back undeliverable.
The fund sued in June 2025 under Employee Retirement Income Security Act (ERISA), the federal law that governs employee benefit plans. Serving him proved hard. A process server made seven attempts, five turned away by aggressive dogs. The court allowed service by posting and mail. The member never answered the complaint, the entry of default, or the court's order to explain himself.
For benefits teams, the lesson sits in the paperwork. The court accepted the fund's allegations as true and found that the signed agreement and plan rules required repayment once the member recovered from a third party. ERISA let the fund pursue equitable relief to enforce those terms.
The court ordered him to repay $23,355.96 in benefits, plus 10 percent annual interest, which came to $6,212.69 in early August, and $8,536.82 in attorneys' fees and costs that ERISA lets a court award.
The judgment came by default, so the member never contested it. Even so, the ruling shows that clear reimbursement and subrogation language, paired with a signed agreement, gives plans a workable route to recover benefits when a member double-recovers and goes silent.
