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| Erin Ronstadt

Subrogation Rights a Hot Issue in ERISA

This is a follow-up blog to our July 2012 posting on this same case.

If you’ve ever been received compensation from a work-related or personal injury matter, then you have most likely dealt with your insurance company’s subrogation rights. ‘Subrogation’ refers to your health insurance company’s right to get reimbursed for expenses it has paid related to your injury. Basically, it allows your insurance company to “step into your shoes” and collect on your behalf based on what it has paid out for your care.

Sometimes, these subrogation rights cause unfair results for you. Health insurance companies will try to take all of your recovery to offset what it has paid, leaving you with nothing and with your attorney’s fees unpaid. Any day now, however, the Supreme Court of the United States will make a decision that could change this unfair result and change the law moving forward. In U.S. Airways v. McCutchen, the Supreme Court will decide whether insurance companies can force employees to reimburse 100 percent of paid medical expenses before the employees and their lawyers who won that compensation can keep a penny.

As one of McCutchen’s lawyers points out, the Court’s decision is really an “Access to Justice” issue: “If injury victims and their lawyers cannot keep a penny until the health insurers recover everything, many will not be able to obtain any compensation – or any representation. Because millions of employees nationwide are covered by ERISA plans, how the Court rules will have far-reaching implications.” Read the full article here. Let’s hope that the Supreme Court appreciates this “Access to Justice” issue and decides the case in favor of injured claimants.

If you are dealing with a subrogation issue, the first step is to examine the plan documents and the exact language impacting subrogation rights. If you have questions about requesting plan documents or learning more about your rights, contact us today.

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