Aetna’s Disability Benefit Clawback Attempt Blocked by ERISA

Aetna Life Insurance Co.'s attempt to claw back $50,428 in alleged overpayments under a disability benefit policy fell flat when an Ohio federal judge said the insurer’s breach of contract claim was preempted by the Employee Retirement Income Security Act.

Aetna can’t use state contract law to recoup disability payments it made to Leslie Dean, because those payments were made pursuant to an ERISA-covered benefit plan, Judge Timothy S. Black of the U.S. District Court for the Southern District of Ohio held Tuesday.

Black chided Aetna for filing a contract counterclaim instead of a claim under ERISA, saying the insurer ...