The technical side of this is that ERISA only provides limited remedies and the plan's claim has to be "equitable," which means that certain somewhat archaic requirements apply to the claim. One of the requirements that some courts apply is the "tracing doctrine." Under that doctrine, the plan only recovers if it can trace the money it paid to a specific pool of assets still held by the participant.
In Thurber v. Aetna, a Circuit Court of Appeals in the Second Circuit (that's in part of the northeast) refused to apply the tracing doctrine strictly and held that Aetna could recover monies from a participant even though the benefits it paid hadn't been set aside by the participant. The court reasoned that, although equitable principles required that a specific fund be identified, the plan document in the case identified that fund as the "overpayments" and the participant was on notice of that fact.
The Supreme Court just refused to take the appeal in Thurber, leaving the Circuits split on the question of whether a plan has to trace to the specific assets that it paid. For now, the three Circuits in the far northeast part of the country do not require tracing, while the other Circuits that have considered the question do.
Although the Court's denial of cert. doesn't reflect the Court's view on the question (it can just mean that the Court didn't think this was the best vehicle to resolve the question), a review of the back story may help plan sponsors mitigate risks in the area. When the Court was considering granting cert., it asked the Solicitor General to weigh in. The Solicitor General argued against granting cert. Even though it supported applying the tracing doctrine, the Solicitor General thought that Thurber was not the case to take because of case-specific issues related to the plan language involved in the dispute.
The language in Thurber helped the Second Circuit decide that the participant understood that it held the overpayments subject to the plan's claim. Plan sponsors should look at the language involved in the case and, if necessary, beef up retirement and health and welfare plan language to give its plans the best opportunity to recover overpayments from plan participants.