Imagine this: you suffered a back and neck injury in an accident that was not your fault, and then you received medical treatment for your injuries. Hopefully you are fortunate enough to have health insurance, so your health insurance provider covered the costs of treating your injuries. Now here comes an important question: do you have to pay your health insurance back? The answer may be yes. If you win a recovery from the person or company that caused your injury, you might have to pay back a portion (or even all) of your recovery!
There are two ways in which your health insurer can try to recover the money it paid for your injuries:
First, if you file and win a lawsuit against the person who caused your injuries, the insurance company can demand you pay it back for the costs it spent for your treatment. This is known as placing a “lien” on your recovery. In this context, a lien allows your health insurer to make sure it is paid back what you owe it, before you receive your settlement or award. Your personal injury lawyer can negotiate with your insurance company to reduce any lines, so that more money ends up in your pocket.
Second, if you do not file a claim for your injury, your health insurer can go after the person who caused your injuries. This is called subrogation Your insurance contract likely permits your insurer to “step into your shoes” and sue the at-fault party. Subrogation allows your insurer to recover all or some of the costs of your treatment from the person who hurt you. In addition, even if you sue the other party yourself, your insurer can sue for the medical costs it paid on your behalf and prohibit you from recovering for that amount.
So, you may be thinking to yourself, “THIS IS NOT FAIR!” and it may not be. Think about this: you pay premiums to your health insurance company all year, but if you don’t get sick or injured, you can’t call up and get your money back (and it seems premiums are going to rise). But, according to the contract you signed with your health insurance to get coverage, it is allowed to get money back it pays on your behalf if you recover for that injury.
Reimbursement issues can cause a lot of problems for injured plaintiffs and drastically affect how much money you get to keep after your case is over. Fortunately, Georgia law limits the amount of reimbursement for certain types of health insurance policies through what is called the “made-whole doctrine.” This Georgia law only allows health insurers to be reimbursed if the amount they attempt to recover is more than the total amount of the injured person’s economic AND noneconomic losses, as well as the expenses of the lawsuit. In other words, the insurance company cannot take any part of a settlement until the injured person is completely put back in the position he was in before the injury. If you have this kind of plan, then at the end of your case your personal injury lawyer can explain to the insurance company that you were not “made whole” and fight for you to keep more of your recovery.
Some insurance policies, though, are governed by the Employee Retirement Income Security Act of 1974 (ERISA), a federal law that ignores Georgia’s “made-whole doctrine.” In general, ERISA healthcare plans are almost always plans administered by private companies—not plans maintained by the government or churches. ERISA policies allow for insurance companies to demand reimbursement regardless of whether the injured person was made whole.
Insurance policies, liens, subrogation, “made whole,” and ERISA—it is complicated stuff! It is important for your lawyer to know what kind of health insurance policy you have and what it says about subrogation and liens and then how to protect your money depending on the situation… That is where we can help. Depending on what kind of insurance coverage you have, we can negotiate with your insurer to decrease the money you have to pay back to them, and increase the amount of money you get. We also make sure the insurance company does not try to take money from you for injuries and treatment that was not related to your recovery. Here is the scariest part: if your insurance company demands too much money and you refuse to pay, your insurance company can sue you. This is just another reason to make sure you have a qualified personal injury attorney that will look out for your best interests and make sure you are fairly compensated for your injuries.
If you were injured and need recovery, we have experience dealing with the insurance companies and will do everything we can to prevent them from taking your money from you. If you would like to talk with someone from the Rafi Law Firm, please contact us.