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Does medical insurance have to be reimbursed if accident insurance does not cover the cost of injury?

Atlanta, GA |

A friend was injured in an auto accident. The other driver was cited but only had $25,000 of coverage and her medical bills are over $42,000. Her health insurance has covered therapy, surgery and medications. Does she have to reimburse the health insurance company from the $25,000?

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Attorney answers 3


As I am not licensed in a Georgia, I can only offer you general advice. However, the answer to your question is -- "it depends".

In this area of subrogation liens, much depends on the state and federal law and whether or not the health-insurance which has provided benefits to your friend is an ERISA policy and the exact wording of the coverage.

Your friend should speak with a personal injury attorney in her area who can review the terms of the medical coverage she has received. You may have heard of the Wal-Mart employee case where Wal-Mart was successful in obtaining full repayment of their ERISA lien, despite the fact that the woman's recovery did not provide for her full care. This can be a very complicated area of personal injury law and your friend should seek counsel from a personal injury attorney familiar with ERISA liens and other subrogation liens.


Health insurance reimbursement issues are complex and often take as much effort as recovering the funds from the party at fault. We really need to know what form of health insurance is involved in order to give an accurate answer. In Georgia, if it is an individual private health insurance policy, medical payments coverage under one's own auto policy, or a state or local employee benefit plan, the Georgia "full compensation" rule virtually eliminates reimbursement in any compromise settlement. If it is an employee benefit plan under the federal ERISA law, you need to know if it is a fully insured or self-funded employer plan, and whether the plan includes a subrogation clause that effectively excludes the "made whole" doctrine. Federal Employee Health Benefit plans, Medicare and Medicaid all have their own complexities which may result in partial or full reimbursement obligations. All of these are subject to arguments over law and equity rules. The bottom line is that in our handling of cases, we seldom pay more than a small percentage of the face value of reimbursement claims.


I agree with everything Mr. Shigley says regarding your situation. It is for those reasons that you will need an attorney to assist you in resolving this issue.

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