The potential right of a health insurance company to recover or recoup the funds that they have paid out on your injury claim from any funds that you recover is known as the right of subrogation. As a general rule, in Virginia and North Carolina, health insurance companies are not permitted to subrogate and recoup their monies paid out if you recover in either verdict or settlement; however, there are many, many exceptions.
First and foremost among these exceptions is the right of Medicare and Medicaid to get their money back. You absolutely cannot ignore a Medicare or Medicaid lien on your case. If you do, you may find yourself the subject of a lawsuit by one or both of those entities at some point. The good news is that oftentimes, in certain circumstances, your attorney may be able to negotiate those liens to a lower amount, so that you may obtain more money in your pocket.
Another major exception are health insurance policies that are self- funded and governed by a federal law known as ERISA. You often find these types of policies with large employers, such as shipyards or large factories. Typically, you will receive a letter from them at some point during your case requesting information on your car accident claim. You should never ignore these letters, or it could negatively impact your health insurance coverage. You should forward those letters to your attorney so he can deal with the insurance company’s claimed right to reimbursement of their payments. Again, the good news is that oftentimes this claimed right to reimbursement can also be negotiated to a lower amount by your attorney.
Finally, there are numerous other types of policies which, by operation of either federal or state law, are entitled to claim a lien or right of reimbursement from any settlement or verdict in your personal injury claim. These would include employees of the federal government, military personnel (TRICARE), and state employees. We have, on numerous occasions, also negotiated lower reimbursement amounts on behalf of our clients on these subrogation liens.