This blog will continue in our series of providing our readers with answers to frequently asked questions in the context of a serious injury case. This blog will address FAQ number 3:
3. If a client settles his or her personal injury claim against an at fault defendant, will they have to repay their own insurance carrier under current subrogation provisions of the law?
Answer: This question often comes up in the context of serious injury cases where the injured individual has incurred substantial medical expenses. If the injured individual is covered by a self-funded ERISA plan, federal law requires that reimbursement be tendered to the self-funded health insurance plan from that portion of the settlement which constitutes reimbursement for the same expenses. This is what the doctrine of subrogation means, that being that the insurance company is subrogated against the rights of the injured individual to recover monies it had to pay as a result of the negligence of the third party. If the third party pays the medical expense money to the injured individual, the health insurance company is subrogated and therefore has a right to recover those expenses back from the at fault party since the at fault party caused those expenses to be incurred. In the context of a case where the injured individual only has insurance through a ERISA self funded plan, the bad news for injured individuals is that they may very well have to repay the healthcare plan with monies recovered from their settlements.
In cases where a healthcare plan is insured, that being the plan is not fully self funded by the employer and/or the employee contributes to the premiums or the employer’s insurance company is not completely self funded, it is an entirely different matter. Georgia follows the “made whole” doctrine which means that unless the claimant is first “made whole” for all of his or her damages, there is no right of subrogation. Because all serious injury cases are factually specific, as is the analysis of arcane ERISA documents and other federally insured plans for federal employees, it is necessary that each case be addressed on a case by case basis. As a general proposition, our firm always endeavors to provide all funds recovered from a settlement directly to the client. Whether we are successful in defeating claims for subrogation, however, is dependent upon the facts. As the old saying goes, a lawyer can’t make the facts, the best lawyer can do is work with the facts involved. Thus, this frequently asked question can only be answered on a case by case basis which obviously requires advice from an attorney experienced in these matters.
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