When you receive injuries in an accident, your health insurance usually pays your medical expenses. If you then make a personal injury claim and get money for those expenses from the insurance company of a person who caused the accident, you may discover that subrogation and liens reduce your Virginia personal injury compensation. That’s because you may have to reimburse your health insurer for the medical expenses they paid.
How Do Subrogation and Liens Work?
Subrogation and liens are two different but related legal concepts. Subrogation gives a party (in this case, your health insurer) the right to seek reimbursement from a third party (the at-fault person’s insurance company) who is legally liable. If your health insurance company has the right of subrogation, they can recover the medical expenses they paid from the insurance company that is legally liable for compensating you for your injuries.
The subrogation right gives rise to the right for reimbursement, which your insurer may pursue by filing a lien against you. A lien is a legally enforceable encumbrance on your property.
When your health insurer has the right to reimbursement of medical expenses, the final amount you get as your personal injury settlement may be less than you anticipate. If you negotiate your own settlement unaware of this complication, you may end up very disappointed with the amount of the settlement you ultimately keep.
When Can a Health Insurer Recover Medical Expenses From Your Personal Injury Compensation By Subrogation or a Lien?
In Virginia, health insurers sometimes can get reimbursement for medical expenses they paid when the injured victim receives personal injury compensation from a liability insurance company. Other times, they cannot get reimbursement.
Virginia law on subrogation and personal injury liens is complicated. The Commonwealth has an anti-subrogation statute that prohibits health insurance companies from including subrogation clauses in contracts issued in Virginia. However, federal laws preempt Virginia’s anti-subrogation law in some cases.
In addition, the Virginia anti-subrogation law does not apply to contracts issued in other states. If you have an out-of-state health insurance, that state may not have anti-subrogation rules, since many states do not. That means subrogation provisions in your policy may be enforceable.
If you recover personal injury compensation for your medical expenses, your health insurer may seek reimbursement for expenses they paid in a number of other specific situations, such as:
- Federal agency employees and insurance policies negotiated under the Federal Employee Health Benefit Act (FEHBA) are not subject to the Virginia anti-subrogation statute. Virginia residents with FEHBA insurance must reimburse their health insurance company for medical expenses out of personal injury compensation.
- Another federal law known as ERISA (Employees Retirement Income Security Act) gives ERISA-compliant employers with self-funded health benefit plans the right to reimbursement of paid medical expenses when the injured person recovers personal injury compensation.
- Medicare, Medicaid, and workers’ compensation plans have the right to reimbursement of medical expenses when a claimant receives personal injury compensation.
- The Federal Medical Care Recovery Act (FMCRA) authorizes the government to recover costs of medical care provided to injured individuals at government expense. The Veterans Administration (VA) and Tricare (which covers military personnel) have the right to seek reimbursement out of personal injury compensation under this law.
Despite the fact that some health insurance plans can assert reimbursement rights for medical expenses in personal injury cases, there are situations when an injured individual’s health insurer cannot pursue subrogation rights or liens in Virginia.
How Can You Find Out Whether Subrogation and Liens Reduce Your Virginia Personal Injury Compensation?
The only way to know if you will have to repay medical expenses out of your personal injury compensation is to have an experienced personal injury attorney review your case, including your insurance coverage. Taking into account issues relating to subrogation and liens is one of the important reasons that you should retain an attorney if you suffer severe injuries in an accident that was another person’s fault.
When you talk with an experienced personal injury lawyer about your accident case, your insurance coverage is one of the important matters your attorney addresses. It is extremely critical to know before settlement negotiations begin whether your health insurer is entitled to reimbursement for medical expenses they paid.
In addition, during a personal injury case, health insurance carriers sometimes file overreaching or inappropriate liens against the injured victim. If that happens, your attorney will navigate the complex process involved in resolving the lien issues.
Talk With a Trusted Virginia Beach Personal Injury Lawyer
If you received severe injuries in an accident that was another person’s fault, Virginia Beach personal injury attorney Jeffrey Brooke is here to help. At The Jeff Brooke Team, we dedicate our practice to helping injured victims and their families, including addressing subrogation and lien matters that arise in the case. Contact us by phone at (757) 552-6055 or by using our online contact form.
Jeff Brooke is a personal injury attorney devoted to helping individuals who have suffered serious and catastrophic injuries or lost a loved one because of someone else’s negligent and careless actions. The Jeff Brooke Team serves all of southeastern Virginia. The firm helps clients in the Greater Tidewater and Greater Hampton Roads areas, including in Virginia Beach, Norfolk, Portsmouth, Chesapeake, and Chesterfield. The Jeff Brooke Team also handles cases in northeastern North Carolina, including the Outer Banks.