Subrogation Can Make Big Difference In Final Payment
If you have been in a car wreck, hopefully you have good health and automobile insurance policies. They can get your vehicle damage, medical bills, lost wages, and other expenses paid quickly before the other driver’s insurance company pays you money. But people are often angry to learn that they may have to pay this money back when they settle with the other driver’s insurance company or the jury returns a verdict. The concept is called subrogation and it can throw a wrench into a car accident settlement or recovery of money.
Subrogation is a long-standing equitable doctrine that allows insurance companies to recover money they have paid to someone else. In personal injury cases, a subrogation lien is asserted in two situations:
for medical bills paid by your health insurance company and
property damage and other claims paid by your auto insurance company.
Consider a typical wreck when you are crashed into by a driver who runs a red light. You tell the ambulance, hospital, and doctor that you are covered by an Aetna plan and hopefully they file your bills with your health insurance carrier and are paid. But your health insurance company can file a subrogation lien or the hospital can file a lien if certain legal requirements are met and not tell you.
Further, your automobile insurance company may also pay your property damage and assert its right to repayment from the at-fault driver.
Health Insurance Subrogation Claims
You may not think that it is fair that you have to pay premiums for health insurance and then have to pay your company back from the settlement or jury verdict. We understand. A large amount of that payment is designed to reimburse you for medical bills you have incurred, but they have been paid by someone else. Your company stands in your shoes and wants to be repaid. It has had this right since it was added to the 1974 Employee Retirement Income Security Act, which was sponsored by a Texas senator to protect the pension rights of workers. Almost all health insurance plans are now ERISA qualified.
Best Approach to Resolving Health Insurance Subrogation
Hire a good personal injury lawyer. The amount of money he can save you is often more than his fee.
Berenson Injury Law works hard to maximize the amount of money our clients receive. We deal with subrogation issues all the time. We use tactics that reduce and even sometimes get rid of health insurance liens. We have saved our clients thousands and thousands of dollars doing this over the past 38 years.
When we are hired, we immediately order the ambulance, hospital, and doctor bills and see if health insurance was filed on, the bills were paid, and how much our clients owe. If asked by our clients, we will help make small payments against the bill up front to make sure that their credit rating is not harmed.
We make sure that our clients told the hospital and other medical providers that they had insurance, as often this is not possible given their physical condition. If not, we have them call that information in and follow up to make sure the insurance claim was actually processed.
Often the medical provider says that it did not know that the injured persons had health insurance or refuses to file on it, hoping to get a larger payout from the third or first party insurance settlement.
Your Aetna plan representatives know that you have been in a car or truck crash based on the medical records and bills it has processed. It is common to receive a questionnaire from them asking you for more information, including the name of your attorney and the other driver’s insurance company. That way, Aetna can notify them of its lien. We have good advice for our clients regarding these forms and how to proceed in general.
If the bills are paid and a health insurance subrogation lien is asserted in writing, we verify that the lien is valid by contacting the plan administrator and studying the plan’s Form 5500 filed with the Internal Revenue Service. We have it thrown out if it is not. If the lien is legitimate, we negotiate and get the balance reduced as much as possible.
If the medical provider did not file on available health insurance and the client wishes for our office to negotiate the balance down, we are happy to contact the hospital or doctor to cut the bill, or advise our client how he may get a better deal if he does so himself, and then negotiate the bill later at the client’s request.
In addition, a Texas law that took effect in 2014 caps the amount of the recovery if the health insurance plan is not self-funded.
When negotiating a settlement with the at-fault party, we seek the maximum possible amount for medical bills, disability, lost wages, disfigurement, pain, suffering and other damages. If the company refuses to pay a good settlement, we file a lawsuit and take the case to a judge and jury.
Property Damage Subrogation
It is often beneficial to file your property damage claim under your own policy, rather than wait for the other driver’s company to investigate how the crash happened, locate its driver, take a statement from him, you, and witnesses, and then decide if its driver is liable. If it does so, its offer for vehicle damage is often less than your company’s appraisal.
If your insurance company pays to repair or total your vehicle, it will charge you a deductible, often $500.00 or more. It must then pursue the deductible from the other company. We want to make sure that you get your deductible reimbursed, but this can take a lot of work.
If the two adjusters should find that you are partly at fault for the accident, the deductible will be prorated. For instance, if it is determined that you are 30% at fault, you will only receive a 70% refund of the deductible and this will adversely affect your payment for your other damages. It is the goal of our office that the other driver is held 100% at fault.
When Subrogation Takes Place
Subrogation is sometimes handled towards the end of the claims process. So a policyholder hears little, if anything, about the activity. Insurance companies normally work with each other in facilitating this process. However, that does not guarantee that you will hear about the action should your insurer decide to recoup a payout. The law requires that your insurance company inform you if it is carrying out subrogation on your claim, but we have seen many instances when this does not happen.
If you sign a settlement agreement or release with the other party’s insurer, take the time to read the fine print. Some insurance companies may add a waiver of subrogation in the contract to prevent any attempts by your insurer to recover the settlement. If you waive subrogation following a car accident, your auto insurance company can deny the claim if they cannot seek reimbursement.
We Can Help You With Your Car or Truck Crash Claim
As with many other aspects of a personal injury case, subrogation claims can get tricky. This is a complicated subject that involves many court decisions and ERISA law.
Contact our firm if you have been in a automobile or truck collision and have questions.