Insurance Companies And Injuries And Subrogation

If someone in Dallas, Fort Worth, Arlington, Grand Prairie, Mansfield, Hurst, Euless, Bedford, Duncanville, or anywhere else in Texas gets involved in an accident and someone besides themselves are at fault, what happens when health insurance pays for the medical bills resulting from the accident? The answer is one you are going to hate. The answer is: It depends.
There are many variables that come into play, some of which have been discussed in previous blogs. Today we are going to discuss what happens when a person’s own personal health insurance company pays for the medical bills incurred as the result of someone else causing injury to you.
Typical health insurance companies are Blue Cross / Blue Shield, Humana, and other names you have heard about and often times this health insurance is provided as a benefit by your employer. The significance of employer provided health insurance is that many times the health insurance provided through employment is a federally regulated plan called Employers Retirement Income Security Act, otherwise known as an ERISA plan.
ERISA plans are in a category all by themselves and are often times very difficult to deal with. Other plans, that are not ERISA are usually much easier to deal with but can still be challenging depending on the language in the plan.
The Texas Supreme Court has held, that when someone else causes one to incur medical expenses that get paid by the injured person’s health insurer, that the health insurer may be entitled to “first money” from a settlement. This may be the case even where the injured party has not been made whole by the policy proceeds from the person’s insurance company who caused the medical bills to be incurred. By not “made whole” meaning the injured person still is short money due to lost wages and other damages.
The most recent, significant case by the Texas Supreme Court, is a 2007 case styled, Fortis Benefits v. Vanessa Cantu and Ford Motor Company. This case is a must read to have an ideal of how subrogation sometimes works.
Keep in mind – when someone else, a third party, causes you to be injured and incur medical expenses and you have health insurance that pays those medical expenses, then, when you recover from the person who caused the injuries you have a responsibility to pay back your health insurance. When your health insurance pays, they have paid for bills that the third party should have paid for. If you do not pay them back then you are getting a “double recovery.” However, it should be quickly pointed out that sometimes this is okay, it just depends on the circumstances and the writing in the health insurance policy.
It is vital to have an experienced Insurance Law Attorney involved in these situations. If it is not handled properly, the person receiving the “double recovery” could find themselves being sued by their health insurance company. This is not uncommon. An experienced attorney, using properly legal means, can often times make this “double recovery” legal. But it is a situation where the “i’s have to be dotted and the t’s crossed.”
Health insurance companies generally include a subrogation clause in the insurance contracts and the wording will vary insurance company to insurance company and policy to policy. But these contractual provisions creating a right of subrogation are valid and should be honored. This has been made clear by the Texas Court of Appeals, Eastland, in 1974, in the case, Group Hospital Service, Inc. v. State Farm Insurance Co.
Worse, some policies have provisions written into them excusing the health insurer from paying altogether if there is a personal injury claim arising from an injury, so injury claims increasingly do not involve health insurance.
One thing to bear in mind and make clear. These policies vary widely with an ERISA plan being the hardest to deal with in these situations. And an experienced attorney can sometimes make even the worst plans deal fairly with the injured person.